For whatever reason, personal bankruptcy has become synonymous with a person avoiding their bills, but that is simply not the case. We believe that the ability to find relief from debt which has become overwhelming should never be considered a bad thing! Some people feel like they are doing something wrong by filing for bankruptcy or that they are the bad guy somehow. This couldn’t be further from the truth.
There are a variety of reasons people choose to declare bankruptcy. Financial issues as a result of divorce, medical problems, job loss, tax issues, or even just credit card debt that has grown out of control are just a few.
The reason bankruptcy exists is to help honest and unfortunate people when their financial situations become unmanageable. It is a legal avenue that you are afforded to get relief if your financial situation has gotten out of control. You are not alone. Tens of thousands of Canadians, from all income groups, take advantage of its benefits every year.
How does the process of personal bankruptcy work?
The first step is to meet with a Licensed Insolvency Trustee (LIT) who will review your finances and determine if bankruptcy is the right solution. If it is, the LIT will perform a calculation of your income, certain expenses, and assets to determine your repayment term in bankruptcy and the subsequent monthly payment. When you file, the LIT will send a copy of your bankruptcy filing to all of your creditors. They then have to file a claim with respect to their debt to have it included in the bankruptcy.
After you file for bankruptcy you will have to file monthly income statements with your LIT and attend mandatory credit counselling sessions. Once you have satisfied all of the terms of your bankruptcy, you will be discharged from bankruptcy.
Personal bankruptcy offers several significant benefits:
- It gives you a chance to wipe the slate clean
- Reduces debt
- Stops interest from accruing
- Reduces monthly payments and allows for a single monthly payment
- Stops most collection action including garnishments and frozen bank accounts, even those issued by the Canada Revenue Agency
If the stigma attached to personal bankruptcy is all that’s stopping you from taking advantage, stop worrying and start living again. Spergel can help. Our Licensed Insolvency Trustees are here to help you develop a strategy for financial wellbeing.
Call us today at 310-4321 for a free consultation.