Discover Life After Bankruptcy

Filing for bankruptcy is a difficult decision. However, it is possible to recover from the poor credit rating after you are discharged from bankruptcy. To help you accomplish this F. J. Zielski & Associates Inc. has a seven step plan:

Step 1: Complete your bankruptcy in the shortest time you can.

If you are a first time bankrupt, you qualify for an automatic discharge from bankruptcy at the end of 9 months. To be eligible for this quick discharge, you have to make monthly payments and attend your credit counselling sessions. The sooner your bankruptcy is completed, the sooner it will disappear from your credit report, so complete all of your bankruptcy duties as soon as possible.

Step 2: Use common sense.

Think before you spend your money, ask yourself ‘Do I really need this right now?’ - 9 out of 10 times the answer will be no. Each month you receive a bank statement, look at it. Look at the deposits and look at the withdrawals. Do you know where all those instant teller cash advances went?

Step 3: Start saving money.

Money is opportunity, to borrow again, you need to prove that you can handle money, and the best way to do that is to show that you have some! Open a saving account and start depositing. You were making monthly payments to the trustee during your bankruptcy. Now that your bankruptcy is finished, continue making those payments, but make them to your own savings account. Savings will be the foundation for your future borrowing.

Step 4: Get a copy of your credit report.

Go to Equifax® Canada and TransUnion® and get a copy of your credit report and check for accurateness. If you find any errors, such as debts appearing that were included in your bankruptcy, notify the credit bureau immediately.

Step 5: Get a secured Visa card.

Start rebuilding your credit with a secured credit card. You use your savings to place a deposit on a credit card; the bank in turn will give you a credit card with a matching credit limit. It shows up on your credit report as a normal credit card, and now you have a credit card for use when required.

Step 6: Get an RRSP.

If you invest $1,000 in an RRSP, your bank will probably be willing to lend you another $1,000 to contribute to your RRSP. That $2,000 you can contribute which will generate a refund at tax time that will be almost enough to pay off your loan. Your credit report then shows a paid loan, which is a positive entry on your credit report, and you have $2,000 invested in an RRSP!

Step 7: Keep saving.

You will soon have enough for a down payment on a car, and if you save long enough, the down payment on a house. As you save more in your savings account your desire and dependence on credit will diminish. Why borrow money when you can use your own?

For more information on life after bankruptcy, contact F. J. Zielski & Associates in Belleville, Kingston, Trenton, or Cobourg.

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