10 Tips To Get You Back on Track Following a Bankruptcy
Since we’ve opened our doors in 1999, we’ve helped over 100,000 Canadians just like you to conquer their debts and repair their finances for life.
While we advise on the best solution based on your individual circumstances, many feel that bankruptcy is the best option for them.
We help them to overcome the myths and misconceptions about bankruptcy and use it to their advantage.
Bankruptcy isn’t the end.
It’s a fresh start that can help you to live a financially healthy and debt-free life.
Here we’ll look at 10 tips to get you back off to the best possible start after a bankruptcy…
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1- Begin with budgeting
A good household budget is your greatest weapon in the battle against debt. It can help you to keep on top of little expenses, while ensuring that you pay into your savings consistently. Your savings will prevent you from becoming reliant on credit to deal with unforeseen expenses. Speaking of savings…
2- Use RRSPs & TFSAs to your advantage
Saving is a sign of responsibility to banks which may make them more apt to trust you again after bankruptcy. Invest in Tax Free Savings Accounts and a Registered Retirement Savings Plan. The latter can lead to bigger tax refunds and enhance your savings.
3- Keep an eye on your credit report
Bankruptcy teaches us to be proactive. Falling asleep at the wheel when it comes to our finances is often what gets us deep in debt. One way to be proactive is to keep an eye on your credit report and make sure that all information pertaining to your bankruptcy is relevant. Nobody else can do it for you.
4- Go on an all-cash diet
Having trouble keeping on top of your spending. Try switching to an all-cash diet. Avoid using credit or debit cards and deal exclusively in cash. This makes it much easier to track your spending and avoid unpleasant surprises when you check your bank statements.
5- Save and pay cash rather than financing
With so many credit options available to us, we’ve stopped saving up for that new car, sofa or TV like our parents did. Instead, we get these things on credit. Inevitably, this means paying more than these things are worth with a hefty dose of interest. The easier credit is to obtain, the more punishing you can expect the interest payments to be.
So, wherever possible, save up and pay cash for the things you want, rather than relying on consumer finance.
6- Get a secured credit card
After bankruptcy you may be loath to get any form of credit again. However, it’s better to have good credit and not need it, than to need it and not have it.
7- Keep on top of your utilities
Your utility bills don’t count towards your credit rating… unless, of course, you miss a payment. Stay on top of your utility bills and make sure you pay them in a timely fashion.
8- Establish a borrowing limit- and stick to it
We have access to so much credit, it’s no wonder our debts can spiral out of control so easily. Rather than swearing off credit altogether, you may prefer to impose a sensible limit to your borrowing. By rule of thumb, you should avoid borrowing any more than you can earn in one month. So if your monthly earnings amount to, say, $2,500 this should be your hard borrowing limit.
9- Avoid “credit repair” scams
Like anything else worth having, there are no shortcuts to achieving good credit. Only you can repair it with years of discipline and good choices. Anyone offering “credit repair” services online is trying to make easy money for doing virtually nothing.
10- Educate yourself and others
Bankruptcy should be viewed as a learning experience. As part of your mandatory Credit Counseling, you’ll have learned to pinpoint the behaviours and circumstances that allowed your debts to spiral out of control. Learn from your mistakes and explain what happened to others, especially your kids to prevent them from making the same mistakes as you.
Remember, we’re always here to help!
Struggling with your debts? Considering Bankruptcy?
Unsure if there are other options available?
Since 1999 we’ve helped over 200,000 Canadians from all walks of life to improve their finances and live debt free.
Why not get in touch with us today on (877)879-4770?
Our licensed and highly knowledgeable team are waiting to help you live your best financial life.
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