Bad Bankruptcy Information
There is much information that people hear concerning bankruptcy, some of it good, some bad. This article will focus on the bad bankruptcy information.
Bankruptcy clears your credit rating
No it does not. Both Equifax and Trans Union of Canada keep a record of your bankruptcy for six (6) years. The six (6) years starts at the end of your bankruptcy. A first time bankrupt with no surplus income or other problems will take nine (9) months to be completed. Once your bankruptcy is over
(i.e. – after 9 months), you must be pro active in rebuilding your credit score. If you do nothing, than nothing will happen.
You can never get credit again
This might have been true 30 years ago but it is certainly not true today. With proper guidance from your trustee at either of the two (2) counselling sessions that take place during the bankruptcy, there is no reason why you should not be able to get credit within a few months after being discharged from your bankruptcy.
Nobody will give me a loan
Banks and financial institutions are in business to make money. They seem to make a lot of money. They can only make money by loaning money to buy a car or house, special loans for education or medical or other personal needs. And yes, also for credit cards, which are really a short-term loan at an interest rate from 18% to 29%. The banks need to loan out money almost as much as you need to borrow it. The key is for you to give them the information that will result in the bank approving your loan.
Bankruptcy will affect your job
As long as you are not in a job that requires you to be bonded or requires a high security clearance, bankruptcy will have no effect on your employment. Most employers (e.g. banks for bank tellers) will simply transfer you to a non-cash function while you are bankrupt. Once you are discharged from bankruptcy and back on your feet, you should meet with Human Resources about getting your old position back. I have not heard of any loss of seniority or reduction in income in this situation. Your trustee will not notify your employer that you are bankrupt unless requested to do so to stop a payroll garnishee.
Bankruptcy will affect your relationship with family and friends
Never has, never will. There is no stigma about filing an assignment in bankruptcy. It is a practical business matter that you have to deal with when you are over your head in debt and need to make a fresh start in your life. As part of the bankruptcy process, you must turn in your credit cards and re-establish your credit and get new credit cards. You will also be given information on budgeting and finance by your trustee. This is all being done to improve your financial health. Your relationship with other people can only improve.
If you are not sure, discuss your concerns with your Trustee.
Contact Rumanek & Company Ltd. for more information. Or please fill out the form on the contact us page for additional information. Or if you would like a free evaluation please fill out the FRRE Evaluation Form.
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