Archive for August, 2006

When meeting with clients in both our Mississauga and Brampton offices, I am often asked what happens after my bankruptcy is over? What do I do next?

If you have never been bankrupt before the minimum time set by the court to be bankrupt is 9 months. This means that the court will give you relief from your debts in 9 months provided all is order and your duties as a bankrupt are completed. The result is the debts you had in your bankruptcy are discharged and you will get a fresh start. There are certain debts or special debts that you will not be discharged from such as, student loans less then 10 years old, child support payments and any fines or penalties.

Once the bankruptcy is completed the trustee will send you an original of your discharge certificate. The discharge date will be added to your credit report and there will be a footnote in the legal section indicating when your bankruptcy started and when it was done. So when new creditors do a credit check they will see the footnote and know that your bankruptcy is completed.

Now it is time to start to rebuild your credit. It is like taking baby steps. Usually the first step is the get a secured credit card. This means you will have to save some money to put a deposit down on a credit card. The credit card company will allow you to use the card up to the amount of the deposit you provided. This will start to rebuild your credit rating as you are paying off the debt each month in order to be able to use the card. Generally, the next step is to get a small loan or car loan and repay it. Again making payments on time and not missing any will rebuild your credit rating. In this way, creditors regain confidence in your ability to pay your debts and will begin to extend credit to you.

For most the purchase of a home is the biggest purchase they will make in their lifetime. This is usually the last step in rebuilding your credit, as it is such a large purchase. You will want to have a good down payment and you may have to shop around for a good mortgage but it can be done.

So don’t be afraid of starting to rebuild your credit after bankruptcy. You just need to budget and use it wisely.

To get your plan started, please contact the Hoyes Michalos office nearest to you and one of our professional staff will meet with you personally to help get a fresh start.

I have lost my Job.. I can’t pay my bills! What should I do?

Don’t Panic! Make a Plan!

Job loss can be one of the most difficult of life’s challenges. Practically all of us plan and build our lives around our income. We need the constant influx of cash to keep everything going. When that cash-flow reduces or stops it does not take long for things to start to unravel.
When job loss happens, the first thing to do is make a plan. It is all well and good to presume that you will get another job right away, but it does not always happen.
Reducing expenses and careful budgeting should allow you to weather the storm if you take action as soon as the job loss happens.
Avoid making up the cash-flow shortfall with credit. When an employment interruption happens we can’t carry on as if nothing has happened. Continuing to use credit with less or no money coming in to service the debt will result in a big problem in short order.

I see people all the time in our Brampton office who have been maintaining their fully employed lifestyle while unemployed by using credit. All too often the amount of debt generated during the period of unemployment is too great to be paid off even when they get back to work.

No one plans to loose their job, but a little forethought can go a long way to reducing the stress of an interruption of income. Put a little of your income away every pay and build a reserve fund for emergencies. It does not really matter how much as long as you do it with every pay, put the money in a separate savings account and forget about it. You will be surprised how quickly it builds up to a very useful cushion that will give you a bit of breathing room when something happens to your income.

If you have suffered a job loss and have accumulated debts that are causing you trouble call 310-PLAN to talk to a trustee about your options today. We can help you make a plan to get you back on track.