Filing bankruptcy puts a 10 year black mark on your credit and devastates your credit score. Getting after bankruptcy credit that you don't have to pay through the nose to qualify for can be next to impossible if you don't implement these vital steps to begin rebuilding your credit immediately. There are 4 key factors involved in repairing your credit after bankruptcy; they are to keep an eye on your credit report, set up a household budget, and begin reconstructing your after bankruptcy credit by applying for 2 specific types of credit and learn how to use them responsibly.
The first step you should take to improve your after bankruptcy credit is to check your credit reports for errors. After filing bankruptcy the reporting agencies often times leave bad debts on your record rather than taking them off as required after bankruptcy. Get a copy of your credit report from all three reporting agencies, Experian, Equifax and Trans Union. You're after bankruptcy credit depends upon your credit report, so you need to contact the credit bureaus and insist that those accounts be properly reported as "included in bankruptcy." If you have other serious mistakes on your credit report, those need to be corrected as well. Your credit score is based on information in your credit report, so errors on your report can seriously damage your chances of getting after bankruptcy credit.
The Canadian Bankruptcy Process After having things reviewed by a licensed trustee and you determine that a bankruptcy is the best fit, you are then are able to proceed with the filing of the bankruptcy. In order to proceed with the filing the trustee will require more detail than you originally provided. At your initial meeting your trustee will have given you a number of different reference documents as well as an application form. This application form needs to be filled out and returned to your trustee's office for processing. Within this application is all the required information your trustee needs to prepare the formal bankruptcy documents. From here your file must be processed, your trustee's office will need a little time to take the information in the application form an turn it into the legal documents that will make the bankruptcy official. When your trustee is finished processing your application form they will schedule a time for you to sign these documents and formalize the bankruptcy. By signing these documents court protection will be automatically put in place. This "stay of proceedings" is protection that prevents your creditors from being able to chase you for the debt. At this point they must stop the phone calls, the interest and any other collection activity they have taken. Now practically there is always a bit of a time delay between the actual signing of the documents and all the creditors notifying all areas of their organization, but fairly quickly the creditors will be notified.. As a result of the formal filing your creditors must not deal with your trustee and you are given the necessary space to be able to focus on the duties you must complete as part of the bankruptcy process.
Lenders are looking for you to be able to handle two types of after bankruptcy credit, revolving and installment. Revolving credit such as a secured credit card is the easiest type of after bankruptcy credit to attain. You make a $200-$500 deposit with the bank issuing the card, and they approve your after bankruptcy credit line based upon that deposit. But what ever you do, don't make the huge mistake of maxing out your new secured credit card. Maxing out your credit cards damages your credit score. If you want to increase your after bankruptcy credit rating, its best not to charge more than 30% to 35% of your credit limit. And it is especially important to pay the balance off in full each month. Light, regular use of your new credit card will build a solid foundation and maximize your chances of receiving a better interest rate on your next after bankruptcy credit card. Don't just grab any secured credit card though, look for one with no application fees or annual charges; you don't have to pay excessive fees to build your after bankruptcy credit. Make sure the card you choose reports to all 3 major credit bureaus. You are not building a good after bankruptcy credit rating unless your payment history is being reported regularly. Finally, make sure it converts to an unsecured card after 12-18 months of on time payments.
For example, when you submit your specific bankruptcy case to them along with all the relevant information, they will suggest you the right type of bankruptcy that you should claim for and they will provide you the right bankruptcy forms to fill. Once you submit those forms, they will review all the information you provided with the forms. If some information is missing, the online bankruptcy forms processor will inform you regarding the same and will ask you to submit the missing information.
The third responsibility you will have is attendance at two credit counseling sessions courses. These courses can be conducted individually or in groups, depending on what you have arranged you're your trustee and they are required to cover topics the essential components of our personal finance (i.e. budgeting, spending habits, re-establishing credit, etc.). The goal of these sessions is one of rehabilitation, they are designed to help review and hone your financial management skills, as well as the identification and prevention of destructive habits. The fourth thing you are required to do is the sending of a monthly report to your trustee. These reports are simply a summary of your monthly income and expenses and in order to fill them out you are required to keep receipts for any money you spend during the month. At the end of the month you are required to summarize these receipts on a form that will be provided by your trustee and provide a copy of this form to your trustee. There are certain receipts that you will have to attach to this form, but the specifics of this will be reviewed by your trustee. These are the standard duties and responsibilities that each individual bankrupt must complete. There are a few other responsibilities that may be required (i.e. attendance at a creditor meeting, attendance at an examination by the Office of the Superintendent of Bankruptcy etc), but these are relatively rare and will be discussed in more detail when you meet with a trustee of the evaluation we previously discussed. In the vast majority of cases upon completing these four duties your part of the bankruptcy is complete and you become eligible for a discharge.
The first step you should take to improve your after bankruptcy credit is to check your credit reports for errors. After filing bankruptcy the reporting agencies often times leave bad debts on your record rather than taking them off as required after bankruptcy. Get a copy of your credit report from all three reporting agencies, Experian, Equifax and Trans Union. You're after bankruptcy credit depends upon your credit report, so you need to contact the credit bureaus and insist that those accounts be properly reported as "included in bankruptcy." If you have other serious mistakes on your credit report, those need to be corrected as well. Your credit score is based on information in your credit report, so errors on your report can seriously damage your chances of getting after bankruptcy credit.
The Canadian Bankruptcy Process After having things reviewed by a licensed trustee and you determine that a bankruptcy is the best fit, you are then are able to proceed with the filing of the bankruptcy. In order to proceed with the filing the trustee will require more detail than you originally provided. At your initial meeting your trustee will have given you a number of different reference documents as well as an application form. This application form needs to be filled out and returned to your trustee's office for processing. Within this application is all the required information your trustee needs to prepare the formal bankruptcy documents. From here your file must be processed, your trustee's office will need a little time to take the information in the application form an turn it into the legal documents that will make the bankruptcy official. When your trustee is finished processing your application form they will schedule a time for you to sign these documents and formalize the bankruptcy. By signing these documents court protection will be automatically put in place. This "stay of proceedings" is protection that prevents your creditors from being able to chase you for the debt. At this point they must stop the phone calls, the interest and any other collection activity they have taken. Now practically there is always a bit of a time delay between the actual signing of the documents and all the creditors notifying all areas of their organization, but fairly quickly the creditors will be notified.. As a result of the formal filing your creditors must not deal with your trustee and you are given the necessary space to be able to focus on the duties you must complete as part of the bankruptcy process.
Lenders are looking for you to be able to handle two types of after bankruptcy credit, revolving and installment. Revolving credit such as a secured credit card is the easiest type of after bankruptcy credit to attain. You make a $200-$500 deposit with the bank issuing the card, and they approve your after bankruptcy credit line based upon that deposit. But what ever you do, don't make the huge mistake of maxing out your new secured credit card. Maxing out your credit cards damages your credit score. If you want to increase your after bankruptcy credit rating, its best not to charge more than 30% to 35% of your credit limit. And it is especially important to pay the balance off in full each month. Light, regular use of your new credit card will build a solid foundation and maximize your chances of receiving a better interest rate on your next after bankruptcy credit card. Don't just grab any secured credit card though, look for one with no application fees or annual charges; you don't have to pay excessive fees to build your after bankruptcy credit. Make sure the card you choose reports to all 3 major credit bureaus. You are not building a good after bankruptcy credit rating unless your payment history is being reported regularly. Finally, make sure it converts to an unsecured card after 12-18 months of on time payments.
For example, when you submit your specific bankruptcy case to them along with all the relevant information, they will suggest you the right type of bankruptcy that you should claim for and they will provide you the right bankruptcy forms to fill. Once you submit those forms, they will review all the information you provided with the forms. If some information is missing, the online bankruptcy forms processor will inform you regarding the same and will ask you to submit the missing information.
The third responsibility you will have is attendance at two credit counseling sessions courses. These courses can be conducted individually or in groups, depending on what you have arranged you're your trustee and they are required to cover topics the essential components of our personal finance (i.e. budgeting, spending habits, re-establishing credit, etc.). The goal of these sessions is one of rehabilitation, they are designed to help review and hone your financial management skills, as well as the identification and prevention of destructive habits. The fourth thing you are required to do is the sending of a monthly report to your trustee. These reports are simply a summary of your monthly income and expenses and in order to fill them out you are required to keep receipts for any money you spend during the month. At the end of the month you are required to summarize these receipts on a form that will be provided by your trustee and provide a copy of this form to your trustee. There are certain receipts that you will have to attach to this form, but the specifics of this will be reviewed by your trustee. These are the standard duties and responsibilities that each individual bankrupt must complete. There are a few other responsibilities that may be required (i.e. attendance at a creditor meeting, attendance at an examination by the Office of the Superintendent of Bankruptcy etc), but these are relatively rare and will be discussed in more detail when you meet with a trustee of the evaluation we previously discussed. In the vast majority of cases upon completing these four duties your part of the bankruptcy is complete and you become eligible for a discharge.
About the Author:
Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: One Can Get Home Loans Even With Bad Credit You have full permission to reprint this article provided this box is kept unchanged.
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