A personal bankruptcy will show on your credit history for six years following your discharge (release) from bankruptcy, which normally happens nine months after filing. This is the same amount of time that many other common transactions such as a missed, late or bounced payment or a judgment are shown on your credit bureau history information.
It’s important to note that even though a bankruptcy will be reflected on your credit history for six years after discharge, most people are able to successfully re-establish credit (and even qualify for a new mortgage) within 2-3 years of bankruptcy discharge.
If you’re considering filing bankruptcy but are worried about the possible negative impact to your credit history or credit score, consider:
- Are you able to pay off all your debt and interest within the next two to five years?
- Would your current credit history and score allow you to access a consolidation loan at a “best rate”?
- Do you have any “negative” transactions being reflected on your credit reports?
- How much more than the minimum payments are you making each month?
For many people, the relatively short-term impact to their credit history after a bankruptcy filing allows them to gain a financial fresh start and an ideal credit rating faster than if they tried to pay off all the debt (plus accumulating interest) on their own!
Bankruptcy is not a permanent mark on your credit history and credit scores can change dramatically in as little two years. Tools, resources and actions you can utilize to help rebuild your credit rating are provided as part of the two financial counselling sessions during bankruptcy.
It is possible to apply for and get new credit before the bankruptcy “expires” from your credit history reports. Even during the time that the bankruptcy is noted on your credit history, it may still be possible to obtain new credit such as vehicle financing or even a credit card, and to renew ongoing commitments such as your mortgage.
Watch our short video to learn more about Rebuilding your credit after a Consumer Proposal or Bankruptcy.