Loans After Bankruptcy in Canada: How to Get a Loan?

Category: After Bankruptcy (10) comments

It is possible to get a loan after bankruptcy in Canada.  To qualify for a loan, you need to re-build your credit by following these steps:

  1. Get your bankruptcy discharge as soon as possible.  Perform all of your duties so that there are no delays in getting your discharge.  As soon as you are discharged you can begin rebuilding your credit.
  2. Take steps to perform after bankruptcy credit repair.  The most important step is to:
  3. Save money after bankruptcy to repair your credit. Once you have saved money, you can do the final step:
  4. Get a secured Visa card to rebuild your credit. A secured Visa card accomplishes two objectives: it allows you to have a credit card that you can use to make purchases where a credit card is required (such as over the internet), and it shows up on your credit report as a regular credit card, which helps you build your credit.

Once you have money (step #3) and have re-established credit by getting a secured credit card (step #4), you can now apply for a loan.  Even though you have a bankruptcy on your credit report, these steps will allow you to rebuild your credit and get a loan after bankruptcy in Canada.

Category: After Bankruptcy |

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  1. Colleen N.

    My bankruptcy was discharged April 2010. I have a credit card and some investments and my bank won’t lend me a cent.
    I don’t know where to go to get a loan that I can trust.

  2. J. Douglas Hoyes

    The note about your bankruptcy will appear on your Equifax credit report for six years after the date of discharge, so in your case the note will be there until April 2017, so it will be more difficult to borrow than if you had never declared bankruptcy. If your bank will not lend you money, you could explore other options, such as another bank or a credit union. However, every time you are turned down for a loan your credit score is harmed, so it is dangerous to apply for loans at too many banks. It may be prudent to ask the bank specifically why they turned you down for the loan. Was it simply because of the bankruptcy, or was it due to your income or other factors? If you know what the issue is, you may be able to take steps to correct the issue.

    A better option may be to work on rebuilding your credit by taking the steps mentioned in the article above, including saving money, and perhaps getting a secured credit card. Often starting with a smaller loan (such as a small RRSP loan) is a prudent strategy to begin to rebuild your credit.

  3. Kenneth H.

    I was discharged in March of 2012. I obtained a loan for a vehicle and a secured Credit Card.
    Both Equifax and Transunion have been reporting my information inaccurately.
    I have called and sent ALL the information they required to correct my information.They said to send the same information to them again.2 weeks later and they say they have no record of my information.They said they will escalate the issue and will be another 3-5 days.I have taken several days off work to resolve the matter and is still not resolved.They are showing that I still owe a good deal of money although the creditor was included in the Bankruptcy and I am delinquent in payment. I have recently been denied funding for a mortgage because the erroneous reporting agency scores.Who can I talk to or where can I go to get help to sort this out?

    1. J. Douglas Hoyes

      Hi Kenneth. Unfortunately Equifax and Trans Union control your credit reports, so they are the only ones who can correct inaccurate information. You should continue to call them, but you could also make a complaint through the Ministry of Consumer Services in your province if you believe they are not responding in a timely manner.

  4. Darlene S.

    I was dischared in sept 2011. In 2012 i needed to borrow money for major car repair. I went to Easy Financial and was satisfied with the monthly payment. I have no assets, but wanted to build my credit rating. After a year went by i needed to borrow more for new tires. I am on cpp pension as well as employee pension. Is there anything i can do to to lower my total loan obligation at a proper bank? I borrowed approx 4,000 in total but with high interest, i now owe over $9,000! Is there anything i can do to repay Easy Financial? And reduce my monthly payment?

    1. J. Douglas Hoyes

      Hi Darlene. Unfortunately when you go to a high interest lender, you pay a very high interest rate. It’s likely that your only option, other than paying it off, would be to see if a regular bank is willing to lend you enough money to pay off Easy Financial.

    1. J. Douglas Hoyes

      Hi Bob. You can apply for a loan while bankrupt, but you must disclose to the lender that you are an undischarged bankrupt (which they will see when they do a credit check on you), so your chances of getting a loan while bankrupt are a lot less than if you wait until you are discharged to apply for a loan.

  5. Dwayne F.

    I have five years left before the bankruptcy word comes off the computers can I get a consolidated loan?

    1. J. Douglas Hoyes

      If you are referring to the fact that a bankruptcy appears on your credit report for a period of time after you are discharged, yes, it is possible to get a loan, but that will be up to the lender. They may question why someone who eliminated all of their debts through a bankruptcy is now requesting a loan to consolidate their debts.


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