Is Personal Bankruptcy For Me?
Maybe. But you might have a better option and together we can try to find out. Bankruptcy is the best option for many people but depends on their particular financial difficulties. The bankruptcy process provides for a fair collection of money from you to repay your creditors (in part) what you owe them.
We offer free consultations where we gather information about your income, expenses, debts, and assets. We need this so we can inform you of all your realistic options and the consequences and merits of each.
The first steps to discover your best option
This is where we will start:
- we will help you prepare a monthly budget of your income and expenses. What is your net monthly income? Who else is in your family unit – a spouse or a partner? Do you have any dependents? What are their monthly incomes and expenses?
- what are your assets? Think about safety deposit boxes, bank accounts, collections, artwork, timeshares, motor vehicles, household furnishings, and assets outside Canada.
- what debts do you have? Not just the debts that are annoying you, but all your debts including credit cards, overdrawn bank accounts, payroll loans, income taxes, student loans, child support obligations, and debts to family and friends. Prepare a list of these creditors and show the total amount owing to each of them. We will need to see some support such as statements that should include account numbers. If any collection agents are contacting you, add them to your list of creditors to be notified.
- what is happening around you? If there are lawsuits, garnishments, or asset seizures then let us know. We can often stop them in bankruptcy filings and in proposal filings. Is your income about to change for the better or worse? What asset transfers or gifts have you been involved with in the last five years? Is an inheritance on the near horizon?
From this information we can inform you of your alternatives and “go to bat for you” and support any proceeding you wish to pursue.
There are good things about personal bankruptcy
Bankruptcy is meant to get you free from your debts and give you a fresh start. You have to do a bit of work to get through it and receive that release from your debts, what we call a “discharge”. It’s not difficult.
It works really, really well. Creditors stop bothering you, garnishments stop, and it gets rid of most debts. The plan is that you will be unburdened from your debts and have a fresh start.
Bankruptcies often have no effect on secured debts – for example, a mortgage on your home, a car loan, or a lease. In most cases, you keep your home or your car as long as you continue your loan payments. As your Licensed Insolvency Trustee, we will estimate your equity in these assets to determine whether we have any interest in them at all, after considering your exemptions. If there is surplus equity in these assets, usually we would reach an agreement on the dollar amount of our claim to these assets and you would pay that amount to us over time. Where this is impractical, the asset may need to be sold.
You may be required to pay to us some of your income. You are allowed to keep a standard amount monthly and your net income over this standard is known as “surplus”. There is a formula to calculate the amount of the surplus. You can find a detailed description here.
Some debts can remain even after you are discharged from your personal bankrutpcy. Some examples include student loans, debts for fraud or embezzlement. These are known as Section 178 debts and are not common.
Your discharge gives you a fresh start!
So Who Goes Bankrupt?
Personal bankruptcy is a relatively low-cost, fairly private way to financially start over. Debt can arise quite suddenly through personal guarantees or sudden claims against you such as foreclosure, or after having been in a motor vehicle accident being denied insurance coverage. Debt can build slowly as we witness through inadequate budgeting techniques, multiple credit card usage, accumulation of years of income tax debts, and gambling. If you throw in the cost of raising a family, supporting relatives, job loss, separation, or addiction and the need for debt relief can be very high.
Contact us now for a free consultation. Know your options!
You can reach us at 604-531-4186
Surrey head office: #210, 2411 – 160 Street, Surrey BC V3Z 0C8
Metrotown office: #206, 5050 Kingsway, Burnaby BC
Downtown office: #708, 1155 West Pender Street, Vancouver BC