When to File Bankruptcy

Being burdened by overwhelming debts is extremely stressful, and it can be difficult to know where to turn or what to do next.

The best thing to do is contact a reputable Licensed Insolvency Trustee to discuss your financial circumstances, and explore bankruptcy and alternatives to bankruptcy. Below, we discuss a variety of factors that will help to determine when to file bankruptcy, and when it is the best way to gain financial relief.

What is bankruptcy?

Bankruptcy is the legal process of clearing debts that cannot be paid by assigning a debtor’s non-exempt assets to a Licensed Insolvency Trustee. These assets are then used towards paying off the outstanding debts. Filing bankruptcy triggers a stay of proceedings, which means creditors are no longer able to pursue lawsuits or contact you asking for money. It is a good idea to contact an experienced bankruptcy trustee firm like Spergel, who will provide you with a dedicated trustee to walk you through each stage of filing bankruptcy. Discover more about what happens to your assets when filing bankruptcy, and which you are able to keep.

When should I file bankruptcy?

Knowing when to file bankruptcy is based on several factors, and most often it is the last resort for debt relief. Once bankruptcy alternatives like debt consolidation and consumer proposal have been considered, filing bankruptcy may be the best option. Here are some criteria to consider if you are deciding when to file bankruptcy:

Your debts have become unmanageable

If you feel your debts are overwhelming and cannot be paid on time, it is best to address them as soon as possible. This could mean that your credit cards are always at their limit, that you are missing regular significant payments, or are paying off bills using credit cards or cash advances. Book a free consultation with one of our compassionate Licensed Insolvency Trustees to discuss your personal debt relief options.

You are in danger of facing legal action

It could be that your debts have become so overwhelming that creditors are contacting you and threatening legal action in order to pursue the money you owe them. In these scenarios, filing bankruptcy will generate a stay of proceedings, whereby automatically creditors are no longer able to contact you while your debts are cleared. This can bring about immense relief for many debtors. Find out more about how bankruptcy works.

You have had a change in circumstances

In Canada, 100,000 people file bankruptcy or consumer proposal in order to gain debt relief each year. For many, bankruptcy comes about as a result of a change in financial circumstances. Examples include a sudden loss of employment with no money to pay off debts, receiving huge, unexpected bills, going through a life event like a divorce or incurring costly medical fees. Spergel has experience of helping over 100,000 Canadians improve their lives by gaining debt relief.

Your health is suffering

Financial troubles can cause no end of impact upon your health and wellbeing. Owing unmanageable and overwhelming debts often leads to issues with depression, anxiety, and stress. It can impact your mental health, appetite, and sleep, which in turn can create issues in your personal life, relationships, and employment. At Spergel, you will be assigned your very own point of contact to walk you through each step of filing bankruptcy to provide relief from debt.

You can no longer borrow money

It may be that you are figuring out when to file bankruptcy because you simply cannot gain further financial assistance. It could be that you have reached your borrowing limit, your credit limit, and no bank will lend you any more money. This can be both a worrying and frustrating time, and it is best to speak to a Licensed Insolvency Trustee in order to gain advice on exploring options like filing bankruptcy for debt relief to begin a fresh financial start.

How do you file bankruptcy?

Provided you meet the eligibility criteria, filing bankruptcy in Canada is a relatively simple process. It requires a Licensed Insolvency Trustee, the only professional able to file bankruptcy. With their assistance, you will provide information on your assets, income, debts and expenses. They can then file bankruptcy through the government, and your non-exempt assets will be reassigned in order to pay off debts. A stay of proceedings will ensure creditors are unable to contact you, and your freedom from debt will begin. Discover more about the advantages of filing bankruptcy.

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At Spergel, we have helped Canadians begin a fresh financial future for over 30 years, and we are here to help you too.

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Book your free phone consultation with our caring team to discuss your options and start your journey towards financial freedom.

Book a free consultation

For further advice on when to file bankruptcy in Canada, book a free consultation with an experienced Licensed Insolvency Trustee. At Spergel, we will discuss your personal financial circumstances and explore the most suitable debt relief options available to you.

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