When is bankruptcy the right option?

Do I have to go bankrupt?

Sometimes bankruptcy makes the most sense, but it doesn't mean losing the things you've worked so hard for.

Understandably, declaring personal bankruptcy is a frightening option for anyone faced with serious money difficulties. But, if it makes sense for you, the right financial solution team can help ease you through it so you and your family can make a fresh start.

How do I know that bankruptcy is my only option?

If you are unable to pay your bills, and you are unable to file a consumer proposal, you may have to file for personal bankruptcy, a legal process regulated by the Bankruptcy and Insolvency Act. By filing for bankruptcy, you may be discharged from most, or all, of your debt, and no further legal steps can be taken against you.

Do I lose everything?

No. This is a common concern of many people faced with bankruptcy. After declaring bankruptcy, you may still reside in your home, keep a significant portion of your household furnishings and drive your own car (up to a certain value). Specifically, the law allows a bankrupt person to retain:

• Household furniture up to $11,300
• Personal effects up to $5,650
• Tools of the trade up to $11,300 (the equipment you need to earn a living)
• A vehicle valued up to $5,650
• Certain types of pensions
• Other special exemptions for farmers
• Certain life insurance policies and certain RSPs

What happens to the income I earn during my period of bankruptcy?

Based upon your income, you may be required to submit a portion of your income during the bankruptcy period. As each individual's situation is different, your financial solution team will advise you of the payment required.

How long does bankruptcy last?

A bankruptcy normally lasts for nine months, if it is your first time. At the end of the bankruptcy period, the slate is wiped clean.

As part of the bankruptcy process, you must attend two credit counselling sessions. Each session is held with a qualified credit counsellor to help you learn how to manage your money and stay on top of your finances.

Does it cost anything?

There is a filing fee to be paid to the Superintendent of Bankruptcy, and a fee to be paid to your trustee. Fees may be paid through a reasonable payment plan based upon your financial situation.

Contact us for your free confidential consultation to determine if personal bankruptcy is your next step toward a better night's sleep.

Are there any other types of debt not eliminated by bankruptcy?

Certain types of debt will still be owed after the bankruptcy proposal is finished. The more common types include:

1. Government student loans where you have been out of school less than 7 years
2. Court fines, parking tickets, speeding tickets
3. Child support or alimony
4. Debt as a result of fraud or embezzlement.

If any of these types of debt apply to you, your financial counsellor will need to review the situation to provide more details as to how it may affect you.

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