Life after Bankruptcy

Think of your life as a book with many chapters. MNP helped you manage your debt through a Consumer Proposal or Bankruptcy, closing that difficult chapter. Now, it’s time to turn the page and start living debt-free.

What to expect in the next chapter

Living without debt means living without the constant stress of financial worries. While other challenges may still come up, not having to deal with credit card bills and collection calls lets you focus on other important parts of your life.

As you transition to this debt-free chapter, you might wonder how to rebuild your credit and manage a sustainable level of debt. During the insolvency process, we would have discussed the importance of developing a budget. This budget includes planning for wish-list items, vacations, necessary appliance purchases, and more. Living within your budget in this new chapter is crucial.

Managing money post-insolvency

Navigating life post-insolvency without understanding your spending habits is like navigating without a map. Once you establish and adhere to a budget, you can consider adding sources of credit for purchases within your budget that you can repay over the coming months.

Here are some ways to test your ability to manage debt:

• Prepaid credit card: Use a prepaid card to see if you can manage your spending and replenish the funds. If you struggle to deposit funds back onto the card, it may indicate that you’re not yet ready to handle other forms of debt.
• Secured line of credit: Similar to the prepaid card, this is usually secured with cash funds. If the line of credit is not repaid in the following month, you are assuming a level of debt that may indicate you are not ready for ongoing debt.
• Saving funds: Save money until you have enough for a significant down payment on a property. Then, take on a mortgage with a budget that allows you to manage the mortgage payments and all related costs.

Avoiding financial pitfalls

Managing debt depends on your income. Don’t spend money you don’t have, as this can lead to high-interest debt and more financial trouble.

Avoid these in your debt-free life:

• Payday loan companies
• High-interest rate credit cards
• High-interest rate car loans
• Borrowing from friends and family

These actions suggest that you are not managing your budget effectively and should reassess your financial plan to avoid incurring unmanageable debt.

The fresh start you obtain after filing a Consumer Proposal or Bankruptcy offers many new paths for managing your day-to-day needs and planning for your future. Your story goes on, and with good budgeting, you can build a stronger and better financial future.