If you’re experiencing financial struggles, you’re not alone.
A recent Ipsos poll found that the average Canadian owes just over $85,000 in consumer debt, excluding their mortgage.
And if you’re already having difficulty making ends meet every month, chances are you’ve considered filing for bankruptcy. But you’ve likely got some questions about it.
What are some advantages of filing for bankruptcy?
Unlike other debt relief options, bankruptcy is a legal process that offers you protection from your unsecured creditors.
Once you file for bankruptcy, your unsecured creditors are stopped from trying to collect against you.
This means an end to collections calls, garnishments on your wages, and lawsuits to recover what you owe.
Another benefit to bankruptcy is that once you are discharged (typically within 9 months for a first time bankruptcy), all your unsecured debts will be erased. Debts that are not included in your bankruptcy are fines, penalties, child support or student loans less than 7 years old.
Being able to start fresh without debt allows you to focus on re-establishing your credit and moving forward with a clean slate.
Another upside to bankruptcy is that – as part of your bankruptcy obligations – you will receive financial counseling that will help you to become more money savvy. You’ll learn budgeting and other techniques to keep track of your financial health so you don’t wind up having to file for bankruptcy again in the future.
What are some disadvantages of filing for bankruptcy?
Bankruptcy is considered a last resort for debtors, and not without good reason.
Your bankruptcy will be reflected on your credit report with the lowest rating possible – an R9. And this rating will show up for 6 years after discharge.
But you should not let the hit to your credit prevent you from getting the debt relief help you need.
After all, if you’re already behind on your mortgage or loan payments, or missing utility bills, your credit is likely already taking a beating that will have lasting effects.
The best thing you can do is to face your debt problem head-on and eliminate it, so you can start fresh and move forward.
Where can I get bankruptcy help?
Your first step is to contact a Licensed Insolvency Trustee.
These federally-regulated and licensed professionals are the only ones authorized to assist Canadian debtors with filing Consumer Proposals or bankruptcies.
At your initial free consultation, your Licensed Insolvency Trustee will review your financial circumstances and advise you of all debt relief options available to you.
You’ll have the opportunity to listen to their expert and unbiased advice on the best solution for you and your family.
But the final decision on how you proceed with debt relief is your own.
When should I reach out for bankruptcy advice and services?
Licensed Insolvency Trustees are able to offer you assistance with the full range of debt relief options, not just filing for bankruptcy.
As soon as you notice you’re having financial troubles, you should contact a Licensed Insolvency Trustee.
This includes starting to miss monthly mortgage payments, or hitting the limits on your credit cards each month. You don’t have to wait until you’re receiving calls from collections agencies or your wages are being garnished to get help.
And the sooner you get professional help, the more options you may have available to you. Bankruptcy may not be inevitable.
Contact a Licensed Insolvency Trustee Today
If you’re tired of having to deal with overwhelming debt, pick up the phone and schedule your free initial consultation today. Our mission is to help you build a better financial future so you can become debt free. We look forward to hearing from you.
Photo by Melinda Gimpel on Unsplash