About four years ago, I could tell that things were turning south with my business. Cash flow was tight, and customers simply weren't coming back to shop some more. I realized that if I was going to keep my house, I would need to do something to resolve my finances. Although it was scary, I decided to meet with a bankruptcy attorney. After I explained my situation, he helped me to understand the process and how to tell if it was a good idea or not. When I decided to do it, things started changing for me right away. This blog breaks down bankruptcy in layman's terms, so that you can decide whether or not it is right for you.
Bankruptcy can be an incredibly scary road to go down. In fact, there are many stigmas associated with bankruptcy that may result in you giving bankruptcy the cold shoulder. After all, some of the things that people say about bankruptcy are rather terrifying. However, a lot of things that are said about bankruptcy aren't actually true; they are myths. Here are five assumed facts that are actually myths regarding bankruptcy in Canada.
Only financially irresponsible people file for bankruptcy.
While some Canadians do actually abuse their credit cards and other financial means, that doesn't mean everyone does. Many people find themselves buried in debt because of being laid off from work, suffering an illness or are in the process of a divorce. Although the people with too much credit on their plates account for the majority of those who file for consumer bankruptcy, nearly 28 percent filed for bankruptcy in 2009 due to job loss and seasonal employment.
All debts are discharged when you file bankruptcy.
Unfortunately, while it would be nice, it is simply not true. Not all debts are permitted to be discharged. Some debts that cannot be discharged include child support, alimony and student loans.
Even debt accumulated just prior to bankruptcy filing won't have to be paid.
This is actually considered to be a form of fraud and the bankruptcy court doesn't take it lightly. If you use a credit card, max it to its limit and immediately file bankruptcy, it will still be your responsibility as it won't be considered in your filing. If it can be proven that this was not your intention, then it is likely that the debt can be included in the filing.
Credit is permanently ruined after filing for bankruptcy.
While it will take time to get your credit back up to where you can purchase a car or obtain a mortgage, you might be surprised to receive offers in the mail for secured credit cards (sort of like pre-paid cards except they help you build your credit) after your Canadian bankruptcy has been removed from your credit. Essentially, you can get started rebuilding your credit immediately. However, if you decide to take out credit again, make sure to make your payments on time and not go overboard. Otherwise, you may find yourself in a similar situation.
Bankruptcy cures everything.
The road isn't easy and all problems won't be solved, but filing for bankruptcy in Canada can be a good start if there aren't any other options for you.
As you can see, there are a number of bankruptcy myths out there. It proves to be beneficial to be aware of the facts before seeking the help of a bankruptcy attorney or trustee. In the end, you will only come out on top by filing bankruptcy when you are suffocating with debt. Experts like Abakhan & Associates Inc Prince George can provide you with more information about bankruptcy.
Share13 September 2014
