Time was when a bankrupt was all but ostracized from society. The social stigma which once was attached to bankruptcy is now pretty much a thing of the past. However, filing for bankruptcy is a final resort; before you get to that position, there are several options as prescribed in Canadian law which offer guaranteed protection from creditors and an escape from oppressive debt and financial meltdown.
When filing bankruptcy Canada law is very precise.
The scourge of personal and business debt
Debt creeps up on everyone regardless of whether it is personal debt or business debt. It is not something which anyone plans for. People fall into the debt trap for many reasons, some of which are offered as examples below:
· Loss of job/salary
· Illness and/or injury
· Business debtors
No matter how thorough you may be with managing your personal or business finance, all it takes is any of the aforementioned events or a combination of events to start the domino effect. As a result finances can rapidly spin out of control and pretty soon the individual finds themselves trapped in a quagmire of which there appears to be little hope of escape.
Protect your assets from creditors
Canadian law is quite specific when dealing with personal and/or business debt, and the action which creditors are able to take to get what is owed them. Anyone finding themselves in such a position will soon have letters arriving, and potentially visits from creditors all seeking to get their money back. Court action taken by creditors can have a devastating effect, especially when bailiffs arrive to seize possession of personal effects to be sold later at auction to recover whatever can be recovered.
If you’re filing bankruptcy Canada law imbues an immediate benefit, namely from the fact that collection agencies and creditors will stop calling and/or visiting. Unsecured debts will be written off and most assets are exempt from seizure. These assets include your home, car furniture and other personal effects which your trustee will advise you of. Additionally, any company or organization which has seized assets in payment for unsecured debt will be ordered to return them. At the end of the process you get the opportunity to make a fresh start with a discharge from bankruptcy in as little as nine months.
It is essential you speak to a bankruptcy trustee at the earliest opportunity. In Canada there are other options which are available such as a consumer proposal. According to the website of Bankruptcy Trustees Canada the following information is available:
…”a Consumer Proposal is a legally binding agreement between you and your unsecured creditors to pay back a reduced balance of your unsecured debt over a period of up to five years – at the end of which, the debts covered in the Proposal will be considered legally paid in full”…
This option may be more suitable than full bankruptcy, dependent upon your personal circumstances. If your debt is less than $250,000 dollars which does not include your principal residence this may well be the best and most suitable option.
Speak to a professional bankruptcy trustee today to obtain the best, most up to date advice regarding all aspects of debt and how to deal with it.