If you have reached this page, you may be asking yourself ‘should I be filing bankruptcy?’ And it’s understandable if you want to do some research.
Good for you for starting the groundwork. Listen carefully to the contents of this video. It may save you time, money and a lot of unnecessary hassle. Researching your options is crucial.
First thing first – Will you qualify for bankruptcy?
- Do you live or do business in Canada?
- Do you owe over $1000?
- Do you have more debts than assets or are unable to pay your bills as they come due?
If the answer to all of these questions are ‘yes’ then you qualify for a personal bankruptcy in Canada.
However, it’s always a unique set of life conditions that bring a person to a point of considering bankruptcy. Some of the most common reasons are:
- A sudden and/or unexpected loss of income – this may be due to health issues, job loss or death of a spouse
- Your efforts to reduce your debt load has failed and the amount owed is climbing
- You are using credit cards to pay for gas and groceries because of lack of cash
- The stress of the debt load is affecting your quality of life or even health
- You have reached a borrowing limit – a sure sign that credit has finally run out
So the next question you should probably ask is: why would I choose bankruptcy?
Here are the three main benefits of a personal bankruptcy:
- Legal protection – when you file for bankruptcy all actions against you stop, lawsuits, collections, and most wage garnishments.
- Agreement with creditors – the Bankruptcy and Insolvency Act is the legal authority that allows you to eliminate your debts in a transparent and orderly way. It gives rights and fair treatment to both you and your creditors.
- All unsecured debts (with a few exceptions) are cleared including credit card debt, lines of credit, unpaid bills and payday loans.
But there are a few things to consider before making that decision:
- If you have a good income you will be expected to make surplus income payments
- Bankruptcy will not solve an overspending problem
- Some of your assets that don’t fall within the exemptions may be seized
- Bankruptcy will negatively affect your credit rating
- Secured debts on assets you wish to keep are not eliminated
- So there are some significant reasons why you should only choose bankruptcy after careful consideration of your other options.
The most common alternatives are :
Consolidation Loans – suitable for those with small debts, good income, and credit, possibly equity in their home
Credit Counseling – you can afford to repay your debts in full and want to have one monthly payment to service all your debt
Consumer Proposal – you cannot afford to repay all your debts in full and need legal protection from your creditors.
Debt Consultants – steer clear of anyone calling themselves ‘debt consultants’. The government has already warned the public about these services. They will charge you fees you can ill-afford right now and will frequently hand your case over to a Licensed Insolvency Trustee because they cannot actually help you solve your debt problem.
So if you have been considering filing bankruptcy take your research up a notch and contact a Licensed Insolvency Trustee. They are the most highly trained debt professionals in Canada with access to the widest array of debt solutions. They can advise you on the best option for you. It may be bankruptcy, but more often it’s not.
Licensed Insolvency Trustees are licensed by the Canadian government and it doesn’t cost anything to meet them and talk about your debt problem. Call 877.421.2288 today to book a free no-obligation, confidential consultation.