Previous bankruptcy in Canada
What happens if you have previously become bankrupt?
How will your life be affected by having a previous bankruptcy on your record?
While your day-to-day life won’t change that much, there are a few key things to be aware of regarding bankruptcies that happened in the past.
How long are previous bankruptcies recorded for?
Generally speaking, your bankruptcy is recorded for life.
Not only that, but it goes down as a public record, so anyone can access it.
The Office of the Superintendent of Bankruptcy has an insolvency search system that lets anyone perform a bankruptcy search.
The records date all the way back to 1973.
Effectively, if you filed for bankruptcy at any point between then and now, there will be a record of it for people to find.
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How long does a previous bankruptcy stay on your credit report?
If the previous bit of information worried you, the good news is that credit agencies don’t look that far back.
They only keep a record of your bankruptcy for 6 years following completion.
So, if you filed for bankruptcy 7 years ago, it is no longer on your credit report.
Additionally, a previous bankruptcy will affect how long another bankruptcy stays on your report.
If you file for bankruptcy today, and you already declared bankruptcy before, then your second bankruptcy stays on your credit report for 14 years.
How will a previous bankruptcy affect your life?
Your main concerns will be based on borrowing money.
When applying for credit, you will be asked if you have ever declared bankruptcy.
As such, you’ll have to state that you have, but the impact this has can vary.
While records are kept all the way back to 1973, most lenders won’t care if your bankruptcy is ancient history.
Instead, they concern themselves with your current credit habits.
So, if the bankruptcy is still on your credit report, it will impact your ability to apply for credit.
Most lenders are unlikely to accept an application when you have a bankruptcy on your report.
With that in mind, it’s always worth checking your credit report before you apply for any credit.
Mistakes can happen, which means an old bankruptcy may still be on there.
If the 6 years have passed (or 14 for a second bankruptcy), you should contact the credit agency and get them to remove the old bankruptcy.
Now, you can apply for credit without your bankruptcy being a major issue.
To conclude, a previous bankruptcy will stay on your credit report for at least 6 years and become a permanent public record.
However, it will only have an impact on your financial life if it’s still on your credit report. Once it’s gone from there, most lenders won’t care about it.
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