5 Useful Tips For Recovering From Bankruptcy

5 Useful Tips For Recovering From Bankruptcy

Posted on March 2, 2023

Nobody wants to face the prospect of bankruptcy but if you have no choice, it’s better than being burdened with unaffordable debt for the rest of your life. If you do find yourself in the situation, just remember it’s not forever and there are things you can do as soon as it is discharged to help recover.

Our Port Colburn auto finance team have listed 5 steps you can take when recovering from bankruptcy.

1.   Open a new chequing account

There are a range of bank and chequing accounts available to those who have been bankrupt. They include some of the larger banks and few require a credit check. Many have low fees too.

A new account will enable you to begin afresh and set up automatic payments for all utilities and future debt.

2.   Set up automatic payments for all outgoings

Once your new bank account is up and running, set up automatic payments for all outgoings. It will help manage your money and ensure your recovery isn’t set back by missing a payment.

Set up automatic payments for everything you can including rent or mortgage, credit cards, car insurance and every outgoing you have.

3.   Get a credit card

Apply for a secured credit card or credit builder card and use it for daily expenses. Select the card that best suits your needs and your situation and use it regularly for groceries, gas and anything you can.

Then get into the habit of treating the card like cash. Never spend what you don’t have and always pay off the full amount at the end of each month. This will help avoid the higher interest rates these cards come with.

4.   Set a strict personal budget

You need to get into the habit of only buying what you can afford and sticking to needs instead of wants. Set a personal and household budget, list all income and outgoings, go through bank statements to see exactly what you spend and where and make savings wherever possible.

The more you can cut back without making life miserable, the more of a savings cushion you can create to protect you in the future.

Plus, budgeting makes you aware of what you spend and where. This can help with behaviour changes.

5.   Be patient

Rebuilding credit takes time and you’re going to have to get used to that. Using a credit card can help raise your score over time but expect to take between 1 and 2 years to recover your credit score enough to be able to access standard credit products.

In the meantime, if you need a car to get you to work, our Port Colburn auto loan team will be able to help whatever your credit score. We can even find you a car to buy with it!

When you’re ready for a car loan, get in touch with the Port Colburn car loan experts at Northway Ford for great deals on auto finance.

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