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The biggest single advantage of bankruptcy is that it gives you a fresh financial start. Despite the negative attitudes that many of us hold towards it, bankruptcy is sometimes the only sensible option if you are unable to service your debt and are unlikely to be able to do so in the foreseeable future.
The practical benefits of bankruptcy include:
- Filing for bankruptcy gets rid of unsecured debts, the majority of which result from high-interest credit cards. Some debts are excluded (see Debts That Are Not Erased during Bankruptcy or Consumer Proposals) from this process. Bankruptcy is usually completed within nine months, rather than the years that it may take to fulfill a consumer proposal or consolidation loan (if you can get one).
- Filing for bankruptcy immediately stops phone calls and letters from creditors, as well as any wage garnishees or legal actions.
- Bankruptcy is usually the least expensive solution to insolvency.
The less tangible benefits of bankruptcy include:
- Relief from stress caused by constantly worrying about paying debtors and meeting your bills.
- Improved relationships with your spouse or partner. Arguments about money are cited as one of the leading causes of divorce in Canada.
- A future in which, while you probably have to make some money management changes, you no longer have a crushing burden of debt.
IN THIS SECTION
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- Why did my trustee tell me to file all outstanding tax returns?
- I’m declaring bankruptcy because of taxes. Is this allowed?
- Will I still owe my student loan after bankruptcy?
- I can’t afford to pay back my student loan and it’s been less than seven years since I left school-what are my options?
- How long does bankruptcy last?
- Can I keep my car during bankruptcy?
- Can I keep my RRSP during bankruptcy?
- Can I keep my home if I declare bankruptcy?
- Will I still be able to rent an apartment or home if I declare bankruptcy?
- Can I keep a credit card during bankruptcy?
- Is it okay to use a credit card if I am thinking about bankruptcy?
- Can I get a checking account after bankruptcy?
- I co-signed on a loan for someone who declared bankruptcy. What happens now?
- If I’m married and I file for bankruptcy, does it affect my spouse’s credit?
- If my spouse declares bankruptcy and I am listed on their credit cards, am I responsible for the debt?
- I am divorced and my ex has declared bankruptcy. Do I still owe for debts and credit cards that I co-signed with my spouse?
- If I file for bankruptcy, will it be noted on my spouse’s credit file?
- Will filing for bankruptcy affect my job situation?
- Who will find out about my bankruptcy?
- Can I get utility services (telephone, cable, hydro, gas, etc.) after bankruptcy?
- Can I keep any money if I declare bankruptcy?
- What is surplus income?
- Can I go to jail for not paying my debts?
- The collection agency is threatening to take me to court: can they do that?
- What happens if a collection agency takes me to court?
- I am behind on my debt payments; can a collection agency take my furniture, electronics, clothes, etc.?
- I am being harassed by a collection agency: what can I do?
- Can I stop a wage garnishment?
- How do I find out if someone is bankrupt?
- What is Chapter 7 bankruptcy?
- What is Chapter 13 bankruptcy?
- What happens if I live in both Canada and the U.S. and declare bankruptcy?
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