It happens. Good people file for bankruptcy and consumer proposals all the time. When times get really tough, and money troubles have you stressed out and losing sleep at night, sometimes these two financial options are the only things that will help. If you’ve chosen to go this route and have filed for bankruptcy in Ontario, you’re probably sleeping better at night, but may still have some questions.
Now that it has happened – what are you going to do about it? Where do you go from here? The most important thing you can do is start rebuilding your credit. If you’ve had to file for bankruptcy, your credit is likely in shambles, so it needs some TLC.
Secured credit cards are one way, and a good place to start. However, because they are usually really small, they are not meaningful enough to be relied upon on their own when you look into doing something like buying a house. That being said, they won’t hurt – they will only help (as long as you keep to the payments of course).
Secured personal loans are better and how you use the money makes all the difference. For example, instead of sending the secured credit card company cash, use your vehicle to obtain a small personal loan. You can then use that money for the secured credit card – two birds, one stone.
Consider using part of the loan money to obtain a secured credit card with a minimum limit of $1000-$2000. Many people assume that you have to use the card to build your credit, when in fact the less you use the card, the better. Use it for small things that you can afford to pay in full, like gas or a cell phone bill, and pay it off as soon as possible. This shows positive credit behaviour.
Consider using the other part to get a small GIC or Canada Savings Bond. When rebuilding credit to be able to deal with the banks again they want to see that you are committed to having positive overall financial health.
Personal loans are good because they are installment credit products that report to your credit and when you make your payments on time they significantly help you to rebuild.
At Prudent Financial, we know how difficult it can be to regain financial confidence. Using a personal loan is a great way to do that.
Call us today to discuss your options: 1-888-852-7647.