3 things to consider before filing for bankruptcy in 2021

Approximately 100,000 Canadians file for bankruptcy each year for a variety of reasons. There is no shame in filing for bankruptcy, however, it is important to consider these 3 things:

Get Expert Advice
Often people wait too long to speak with someone once they begin to feel financial stress. Bankruptcy Canada says that Canadians often wait 2 years before filing for bankruptcy. If you are losing sleep at night, living on credit, or struggling to make important payments each month, there is help available. Speak to a bankruptcy trustee in your area to discuss the possibility of a bankruptcy or a proposal.

Bankruptcy vs. Proposal
A proposal is when you make a formal request to your creditors for a settlement. With professional guidance, together you can assess your cash flow to determine a repayment schedule. You can rebuild your credit faster with a proposal if you are able to settle your proposal in less time than expected.  

“With a consumer proposal, all creditors are bound in a single file that is submitted to the OSB. From the moment the proposal is made, unsecured creditors can no longer demand direct payments or seize wages and must cease any legal proceedings. They have 45 days to accept the proposal or request changes to it. If it is accepted, payments are made to the trustee, not to the creditors.” – CPA Canada

A Bankruptcy is when all creditors are contacted by your trustee and made aware that you have filed. After 9-21 months you are debt free. However, the bankruptcy remains on your credit report for a minimum of 6 years and often effects your score longer than a proposal might.

Rebuilding Credit
It is important to understand the importance of managing your debt and how to rebuild it. Although there are several options available, there are several ways that a car loan can boost your credit score.

Your payment history makes up 35% of your credit score. So, if you maintain the habit of making your car payment on time you can have a positive impact on your credit score.

The key is finding a sub prime auto dealer that ensures you find the best vehicle at a payment you can handle comfortably. Super Dave’s Auto Sales is dedicated to help you rebuild your credit score after you have worked through your bankruptcy or proposal. Their easy online application is the first step to connecting you with a financial specialist who can guide you step by step through rebuilding your credit and getting into a reliable and affordable new-to-you vehicle.

References: *CPA Canada *Bankruptcy Canada *Loans Canada