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How to Rebuild Credit after Filing for Bankruptcy

With Newfoundland’s unemployment rate climbing past 14 per cent, it’s not surprising to see rising bankruptcy and consumer insolvency rates as well. Workers from many industries including oil and gas, mining, forestry and fishing have suffered many job losses or reductions in work over the past few years. And, further financial shock is being felt by residents for whom taxes and inflation have risen to offset the provincial deficit.

For those who have filed for bankruptcy, rebuilding healthy financial habits is the first step toward restoring your finances, but many people may be unsure where to start.

Starting fresh

Prior to your discharge from bankruptcy, you will have attended two counselling sessions that go over money management and how to help you improve your credit rating. Here are some ways you can improve your credit and build healthy habits over time:

  • Start with a budget. Write down all your essential living expenses such as food, shelter,
    transportation and utilities, and subtract them from your monthly income. Take note of any non-essential items you may be able to reduce spending on each month.
  • Add to savings. Without savings, you will likely be unprepared in the face of an emergency or unexpected expense. Use SMART goals to start saving for short, medium and long-term goals.
  • Pay bills on time. Automate your bills so the payments are withdrawn from your bank account each month and you won’t need to worry about incurring late fees.
  • Apply for a secured credit card. Pre-paid cards or secured credit cards
    require a deposit, but they are used the same as any other credit card
    . A car loan or lease can also work toward improving your credit, but be aware that because you are
    considered bankrupt, you will be charged a higher monthly interest rate.
  • Set up one small, manageable and recurring payment on your credit card each month, such as a monthly subscription. Over time, your credit will begin to improve. Be cautious not to
    add more than you can afford to pay at the end of the month.


Filing for bankruptcy can be an emotional process for individuals and families, but it can also relieve the stress that comes with overwhelming debt. Patience and consistency are the keys to repairing credit after bankruptcy. To learn more about repairing credit and debt management, visit the Financial Consumer Agency of Canada or speak to your Licensed Insolvency Trustee for more options.

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