This is a common question we are asked when we meet with individuals.
My name is Adam Rauf and I’m an articling student with Hoyes, Michalos & Associates Inc. and I work out of our Brampton Location.
A blemished credit rating is an unfortunate consequence when an individual decides they need to explore debt management options (whether it’s a credit counselling program, a consumer proposal or filing a personal bankruptcy)
When an individual files a personal bankruptcy, they are rated at an R9 – which is the lowest possible rating. If you’re already in collections, than those debts are already rated at an R9 (so bankruptcy won’t make it any worse).
While an individual is bankrupt, they will not qualify for any unsecured credit (bank loans, traditional credit cards, mortgages etc). Once an individual receives their discharge from bankruptcy (which could be 9 months for people who have never been bankrupt before), the bankruptcy stays on your credit report for 6 years from your discharge date.
If an individual works consistently (showing stable employment), continues car payments, mortgage payments etc. then rebuilding the credit rating is definitely possible before the 6 years are up.
There are other solutions to help resolve your debt issues that are less “damaging” on your credit report.
More than 50% of the clients I meet in Brampton choose to utilize a consumer proposal to manage their debts.
A consumer proposal will put your credit rating at an R7 (which is essentially the same) from any potential creditors.
If you think your debts are becoming too unmanageable and you need some relief from harassing and threatening phone calls, contact us right away 866-747-0660 to book a free consultation so we can discuss your options in person. Alternatively, feel free to e-mail us if you prefer
We hope to hear from you soon.
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