Things to Keep in Mind Before Declaring Bankruptcy in Ontario

It’s easy to understand why anyone would want to set up a business or live in Ontario, North America’s seventh biggest economy. This province possesses much of what makes Canada beautiful, like the Niagara and Kakabeka Falls, not to mention the rich cultural diversity. Just like anywhere else, however, businesses and individuals may run into some difficulties and consequently see the need to file for bankruptcy.
Reliable bankruptcy trustees like Paddon and Yorke, Inc. can guide their clients through the whole process of filing for bankruptcy in Ontario. If you’ve already filed for bankruptcy, keep in mind that you’ve still got to deal with the issue of rebuilding your credit score. To steer clear of future financial troubles, you’ll need to follow certain steps or else say goodbye to life in the Heartland Province for good.

Monitor Your Credit Report

Keep a handle on your current financial situation to recover your bearings. Your credit report can give you a pretty good idea of what exactly went wrong along the way. Study the report cautiously and be sure to file a dispute in case you notice any inaccuracies. There are two credit reporting agencies in Ontario, namely Equifax Canada (www.equifax.ca) and TransUnion (www.transunion.ca).

Keep Your Accounts Open

Closing your accounts after paying off all your debts will not only reduce your credit score but will also handicap you from getting additional credit in the future. Keep your credit score high by demonstrating consistently good debt repayment behavior. With an exceptional credit score, you can qualify for lower interest rates and consequently find it easier to pay off future debts.

Borrow, But Be Careful

It might sound improbable, but applying for loans can also help improve your credit score. The trick is to find the best deal you can afford given your current financial status. That way, despite declaring bankruptcy, you can show your lenders that you’ve got what it takes to bounce back. Incurring small amounts of credit and paying them off in a timely manner will go a long way to re-establishing credit.

Bankruptcy: Not the Only Option

Personal bankruptcy in Ontario Canada has decreased by nearly 23 percent in 2011, a possible indication that a lot more people have learned to handle their debt problems through other means. Study your credit profile and expenditures carefully, and consider other solutions. For example, if your aggregate debts do not exceed $250,000, you can make a consumer proposal to your creditors (a formal settlement option) that lets you negotiate for debt reduction and extended payment terms while reducing the impact on your credit score.