FILING FOR BANKRUPTCY – KNOW YOUR OPTIONS
At BDO Red Deer, we understand that filing for bankruptcy is a serious and often emotional decision. In many cases, stress is compounded by the fact that some people who consider filing for bankruptcy do not fully understand what it means to file for bankruptcy, or what is involved in the bankruptcy process.
This is where our Red Deer office can help. We provide expert advice in a compassionate and supportive way to guide you through the bankruptcy process. Filing for bankruptcy may be the right solution if you:
- Owe more money than what you earn
- Are unable to make your regular debt repayments on your credit cards and loans
- Are unable to pay your monthly bills
- Have had your wages garnished
The benefits of filing for bankruptcy
Although filing for bankruptcy may make you feel like you have “hit rock bottom,” there are several benefits that can give you significant relief from your debt, as well as your anxiety:
- Protects you from creditors taking legal action against you
- Protects certain assets that creditors may otherwise be able to take
- Releases you from most, if not all, debts (i.e. you will not have to pay them back)
- Stops your wage garnishments
- Offers you counselling to assist with your financial future
- Relieves your financial stress and helps you get a fresh start
Learn more about the benefits of filing for bankruptcy.
Filing for bankruptcy – getting a fresh start
Bankruptcy can give people who are struggling with financial problems immediate financial relief, while providing a fair distribution of available funds to creditors. Filing for bankruptcy often provides immediate financial relief to individuals who are unable to pay their bills, but requires the surrender of certain assets in exchange for having the debts forgiven.
To file for bankruptcy, you must owe at least $1,000 and be unable to meet regular payments as they become due. Most people considering this route owe much more than $1,000 and have debts greater than the value of their assets before declaring bankruptcy.
During an initial, free consultation, a Trustee in Bankruptcy will review your situation and assess whether you qualify to file for bankruptcy. Your Trustee in Bankruptcy will explain the steps in the bankruptcy process and answer all of your questions about the bankruptcy process.
After you have successfully completed the steps in the bankruptcy process and are discharged from bankruptcy, you will be released from your debts and have a clean financial slate.
Your BDO Red Deer Trustee in Bankruptcy can also provide resources and support to help you “clean up” your credit report, rebuild your credit, and get back on the road to financial independence.
Important facts about filing for bankruptcy
The following are some important facts you should know about filing for bankruptcy.
You will not lose everything by filing for bankruptcy
Contrary to popular belief, you will not “lose everything” by filing for bankruptcy. The Bankruptcy and Insolvency Act works with provincial legislation to protect many personal assets, including your car, furniture, and RRSPs, which are often exempt from seizure by the Trustee.
Bankruptcy offers immediate protection from harassing calls from creditors
You will be protected immediately from creditors’ legal actions and pressure from collection agencies. Their phone calls, as well as any wage garnishments, will stop.
A fresh start is right around the corner
You will get a fresh financial start immediately and can be eligible to be discharged from your bankruptcy in as little as nine months.
Bankruptcy is a legal process to which thousands of Canadians turn
Bankruptcy is designed to relieve honest, but unfortunate, debtors of their debt burden. You have responsibilities to your creditors under the process, including checks and balances, to make sure that bankruptcy is fair based on your circumstances.
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Costs of filing for bankruptcy
Your BDO Trustee in Red Deer will discuss the costs of filing for bankruptcy with you to ensure you understand the way bankruptcy costs are calculated, the laws that provide for payment of your Trustee in Bankruptcy, and to answer all of your questions.
While there are certainly costs when filing for bankruptcy, it is generally less expensive in the long run than many other debt management options. Use our debt calculator to compare the costs.
What you can and cannot keep
Understanding which assets you can keep and which you must give up when you file for bankruptcy can be confusing. Bankruptcy exemptions also vary from one province and territory to another. For more information on how filing for bankruptcy will affect your assets, check out our information on bankruptcy exemptions.
Bankruptcy and your home
A common question about filing for bankruptcy is whether you can keep your home and how your mortgage will be affected. Many individuals have the option of keeping their homes if they pay the equity to the Trustee. There are also many other assets you can keep.
Debts not included in bankruptcy
Not all outstanding debts can be erased through bankruptcy. Learn what debts and financial commitments will not be discharged by the process.
Bankruptcy and divorce/child support
Learn how filing for bankruptcy will affect child support or alimony payments.
Do you have tax debt owing to the Canada Revenue Agency (CRA)? Unpaid taxes owed to the CRA often represent a significant amount of the debt owed by those with financial problems. A discharge from bankruptcy releases debts owing to the CRA.
Alternative to filing for bankruptcy
Filing for bankruptcy may not be your only option to relieve debt problems. BDO Red Deer offers an alternative to filing for bankruptcy that can help you get out of debt – without going bankrupt. Find out more about how making a proposal to creditors can help you get out of debt.
Check out our frequently asked questions section for more information about bankruptcy.