It is best to begin by dispelling a common misconception: bankruptcy does not prevent you from borrowing money in the future. Contrary to what you may have heard, you will not be required to pay cash for a car, a home, or anything else you may want to purchase for the remainder of your life after bankruptcy discharge. There are currently financial institutions in Canada that specialize in mortgage financing for bankrupt individuals. You will be able to obtain credit, but it will cost you more for quite some time.
The 9-point scale and the FICO score are the two most common methods of determining a credit rating. The highest possible score under the 9 point system is R1 - Pays within 30 days as agreed, while the worst is R9 - Bad Debt, Placed for Collection.
In effect, a R9 rating reflects the purpose of bankruptcy: the opportunity for a new beginning. Your credit file will contain a notation with the date of your bankruptcy discharge for at least six years following your discharge.
However, the two most severely weighted variables in calculating your FICO score are the total amount you owe and your payment history. Surprisingly, the FICO scores of bankruptcy filers whose scores were already extremely low prior to filing do not drop considerably after filing. If you are already close to the abyss, how much lower is it possible to go?
The straightforward fact is that filing for bankruptcy will have a negative impact on your ability to obtain credit in the short term, regardless of the credit scoring system used. You can find credit restoration assistance on the Internet that describes obscure but beneficial techniques, such as adding your own notations to your file. If your bankruptcy was the result of extremely unusual circumstances, a letter explaining the situation may be viewed favorably by some creditors.
If you are fortunate enough to have family and friends who are willing to discuss their financial difficulties, you may have encountered a recently discharged bankrupt with an intriguing story.
Believe it or not, some Canadians receive credit offers in the mail immediately after their release! How is that even possible? What is going on if the immediate consequence of bankruptcy on a credit rating is its destruction?
Creditors are in the business of lending money to make money, and when they see someone who is virtually debt-free, they may be willing to get them back into the game at an exorbitant price. If you have a stable and verifiable source of income, these individuals view you as a potentially acceptable risk. Shortly after your discharge, there are specific actions you can take, such as opening a secured credit card account, that will demonstrate your ability to make on-time payments and establish you as a good credit risk. For those willing to invest the time and effort after discharge, the true effect of bankruptcy on credit rating is the ability to obtain credit at a higher cost.""
" - https://www.affordablecebu.com/
