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After Bankruptcy: A Roadmap for the Future

Is it possible to rebuild my credit? What happens after bankruptcy?

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).

If an individual files an assignment in bankruptcy, they are in the legal state of bankruptcy until they receive their discharge (9 or 21 months depending on family size & income for people who have never been bankrupt before).

You’re debts are listed at an R9 while you’re bankrupt – which is the lowest possible rating.

After you are discharged from bankruptcy, the bankruptcy will remain on your credit report for an additional 6 years.

There are many ways people can rebuild their credit rating:

1. Payments to secured items that would stand outside the bankruptcy (i.e. vehicle loans, mortgage payments, etc.)
2. Making payments on services such as cell phones, internet, rent, cable television services etc.
3. Showing consistent T4 income with the same employer which indicated to your creditors that you are able to hold gainful employment
4. Obtaining a secured credit card and using it routinely for purchases, maintaining a healthy balance on the card to help rebuild and establish your credit report
5. Putting money away for savings and investments showing an ability to invest in RSPs, TFSAs, etc.
6. Qualifying for a mortgage after you are discharged from bankruptcy (which can happen soon after, but usually a higher down payment and less than favorable interest rate is imposed on you).

There’s always room for a second chance, and with a few smart decisions, you’ll be able to rebuild after you are out of bankruptcy.
If you feel you are drowning in debt, or worried about your finances, then contact us right away at 866-747-0660 and book a free consultation with one of our associates.



Sandra Sykora

Sandra is a Licensed Insolvency Trustee in our Toronto Yonge & Bloor and Toronto Downtown offices. Sandra is passionate about getting to know her clients, taking the time to help them find solutions that meet their needs and help them develop life long skills to remain debt free.