Bankruptcy is an unfortunate situation that too many Canadians find themselves in, often through no fault of their own. Thanks to changes made after the financial crash in 2008, it’s no longer the end of the road if you’ve filed for bankruptcy as far as finance and lending goes.
We asked our Lincoln auto loans team what comes next after you have filed for bankruptcy and whether a car loan is out of the question.
Next Steps after you’ve Filed for Bankruptcy
Bankruptcy is a wiping clean of the slate and an opportunity to get out from debt and begin again. It’s a positive time where you can relax and enjoy not feeling anxious about debt and start a new chapter in your life.
Now is the time to brush yourself down, take a deep breath and then begin your life again.
We recommend taking the following few steps to help you on your way.
Check your credit reports
As bankruptcy has an impact on your credit report, it makes sense to check it now. We don’t often recommend checking both bureaus at once but this is one of those times.
Contact both TransUnion and Equifax and request your one free copy of your credit report.
Check to make sure everything has been recorded properly, all the details are correct and all debts are marked as settled wherever relevant.
Open a new bank account
A fresh start, a fresh bank account. Open a basic bank account with a convenient bank. It doesn’t have to be fancy, just a simple account that can make automated payments.
If it comes with a credit card, great. If it doesn’t, we’ll manage.
Transfer any existing automatic payments you may have to your new account and ensure your salary is paid into your new account.
Set up automatic payments for every outgoing you have to ensure you never miss a payment. Now is a time for rebuilding, we don’t want a simple mistake to undo our work!
Get a credit card
If you can qualify for a standard credit card, get one. If you can only get a secured card, use that. Use the card for daily expenses like gas or lunch. Set up an automatic payment for the minimum amount each month but clear the balance every month.
Try to time it so the automatic payment goes out and a couple of days later you clear the balance. That way you get the benefit of the boost to your payment history while keeping the balance low.
Use a second credit card
Once you’re used to using the card and paying it off, get another and do exactly the same. Use an automatic payment to cover it and clear the balance every month.
Don’t use these cards for anything other than daily expenses to make it easy to clear. This will minimize the interest you’ll pay.
Get a Lincoln auto loan
Once you have been balancing these two credit cards for 12-18 months, you should have a good enough payment history to qualify for a standard auto loan. If you need a car faster, we have access to bad credit car loans, but they cost more.
If you can wait until you can get a standard loan, we recommend doing it. Otherwise, you know where we are!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!
Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!