To help you navigate post-CERB Canada, here is everything you need to know about what government help is available to you in 2022.
Sometimes filing for bankruptcy is a choice that needs to be made, it’s a difficult decision but in the end those who work hard and do what needs to be done will benefit. Once you’ve filed all the necessary papers and taken all the necessary steps and received your discharge you’ll need to complete a few more things just to make sure all loose ends are tied up. Here are the 5 steps you should complete after you’ve filed for bankruptcy.
1. Collect, organize and file all significant paperwork
If you hired an attorney to handle your bankruptcy (which you definitely should do) they will send you a copy of the bankruptcy petition. The petition should be about 40-50 pages in length and contain comprehensive information about your finances including all the debts and assets that were involved in your bankruptcy case. You should also have a notice of bankruptcy that you received directly from the court, this document will contain the dates and deadlines that affected your case. Lastly, you should also have in your possession a copy of the discharge order that was issued by your bankruptcy judge and sent to you by the court. If you have any other files or papers that seem pertinent to your bankruptcy case it is important that you also keep them filed in the same location. The first 3 that were mentioned are the most important and if you have lost any of them you need to request additional copies as being organized after a bankruptcy is extremely important.
We all know that financial paper work is important but the paper work and files associated with your bankruptcy are even more important. If in the future you want to apply for more credit, for a loan or for a mortgage there’s a chance the lender will want to see a copy of your bankruptcy papers. There is also a possibility that someone might try to collect on your old debt and you’ll want to be able to prove to them that you filed for bankruptcy.
2. Make a habit out of checking your credit report
Even if you didn’t check your credit report regularly before you filed for bankruptcy you need to start doing it now, post-bankruptcy. One of the major parts of rebuilding your credit history is keep track of what your creditors think of you and your current financial situation. We recommend that you wait a couple of months or even half a year before you request your first post-bankruptcy credit report. It’s better that you allow the dust to settle after your bankruptcy discharge because it typically takes a couple of billing periods for all your old and new creditors to correct your credit information.
The reason you’ll need to start checking your credit report is to make sure that first, there are no issues and second, that the debt that was discharged during your bankruptcy case is actually being reported with a balance of zero. You don’t want the debt and issues you worked hard to resolve with a bankruptcy to come back and continue to hurt your financial situation. This is particularly important for when you decide it’s time to apply for new credit, old credit accounts can and will hurt your ability to be approved for new loans and credit accounts.
Unfortunately, your old credit accounts that were discharged during your bankruptcy could potentially be sold to a new collections agency who will continue to try to collect on the debt. If you check your credit report often you’ll be able to monitor your own credit and prevent any old credit from coming back and causing problems for you now. By law a bankruptcy can stay on your credit report for 7 years and while that might seem like a long time to continuously monitor your credit report, it’s very important that you do so.
3. Create a detailed budget and review it regularly
Most bankruptcies aren’t in fact caused my people being irresponsible with their money and living outside their means, they happen because of medical emergencies, loss of jobs and family issues like divorce. Therefore, even though you may have been good at budgeting your money pre-bankruptcy it’s still very important that you create a new post-bankruptcy budget and review it regularly. Creating a detailed budget will allow you to better understand your current financial situation, teach you to save for emergencies and prevent any unwanted debt.
A budget is important because you probably don’t ever want to have to go through a bankruptcy again. If you took a financial education course while going through your bankruptcy then you were probably taught how to create a budget and given all the tools you need to succeed. Now it’s time to put them to work in your life. Going through this whole experience has most likely taught you that credit is a pretty big responsibility and that debt is not a joke. Now it’s up to you to make the best budget for your financial life and start planning for the future. Ask yourself what things do you need to start saving for and make a plan, you’ll thank yourself in the future when you have money put away to fix your broken car or repair some damages to your home.
4. Start saving for a rainy day or an emergency
An emergency fund or some sort of savings is the corner stone of having your personal finances under control. Once you’ve started recover from your bankruptcy and have a good working budget, you should be able to start saving money for an emergency pretty quickly. Having an emergency fund will help you make better financial choices and keep you from falling on hard times and having to resort to maxing out credit cards or falling behind on payments.
The number one most important thing that an emergency fund helps prevent is debt. Debt is the reason you had to file for bankruptcy in the first place and the last thing you want to do is end up in the same situation all over again. Planned and strategic debt is the kind of debt you want, not the kind that is unplanned and out of control. An emergency fund will help make sure you never have to deal with uncontrollable debt again.
5. Start to think about new credit, but don’t overdo it
You definitely need to think about applying for new credit after your bankruptcy is completed, but you also need to tread lightly and don’t overdo it. Credit is an important part of life as it helps facilitate the purchasing of necessary things, but overusing credit and maxing out credit cards can lead to the kind of debt you don’t want to have. Using your credit is important because it will help build your credit history but don’t sacrifice healthy finances simple to get new credit. Start out small and work your way up, this way you’ll have a better chance at preventing unwanted credit card debts and feel a sense of accomplishment when you achieve a good credit score.
Appreciate Your Second Chance
Life doesn’t always go the way we hope it will, but once you’ve successfully completed your bankruptcy you’ll have a chance to do it all over again and make the right choices this time. Don’t squander this second chance, work hard and appreciate what you’ve accomplished.
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