Can I Borrow After a Kitchener Bankruptcy?

One of the most common questions asked about bankruptcy in Kitchener is “Can I borrow after a bankruptcy?”

The reason most people ask this question is that they want to re-establish credit so that they can make a major purchase in the future.
In the Kitchener-Waterloo area many people use a car to get to and from work, so unlike a city like Toronto with a subway system, a car is important for many people. For many, borrowing to purchase a good used car is an important financial goal.

For many people home ownership is also an after-bankruptcy goal, and people worry that with a bankruptcy on their credit report they may never be able to own their own home.

In fact there are thousands of people who have filed bankruptcy in Kitchener over the years who go on to finance a car or a house. Even with a bankruptcy on your credit report, it is possible to borrow again.
To borrow after bankruptcy, you will need a good job (so that you have the income to repay the loan), and a security deposit or down payment.

For example, if you had never filed bankruptcy and you had perfect credit, you might be able to finance a brand new car with no money down, at a low interest rate. After a bankruptcy, with a good job, you will probably need a down payment (say $1,000 on a good used car) and you will probably be charged an interest rate higher than someone who had not been bankrupt.

Generally as each year passes after you have been discharged from bankruptcy the interest rates you are charged decrease, and eventually you will not need a significant security deposit. After seven years the bankruptcy disappears from your credit report.

The key to being able to borrow after a Kitchener bankruptcy is to save money (for your security deposit or down payment), keep your monthly bills like hydro and rent current, and have a good job.

Another common question is “how many people go bankrupt in Kitchener”, and you can read the answer in our Kitchener Bankruptcy Statistics article.