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The Pros and Cons Of Bankruptcy



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I'm Doug hoist a licensed insolvency

trustee with hoist michaelis &

Associates and today I'd like to talk

about the pros and cons of filing

bankruptcy there's one main reason why

you'd consider filing bankruptcy and

that is to eliminate your debt

bankruptcy covers unsecured debt things

like credit cards payday loans tax debts

and even student loans that are

guaranteed by the government if you've

been out of school for more than seven

years bankruptcy gives you protection

from your creditors so as a result

things like collection calls will stop

no more phone calls and even if you have

a wage garnishment when you file

bankruptcy we can stop it and prevent

future wage garnishments as a result of

filing bankruptcy you can be debt free

in as little as nine months so

bankruptcy truly is a fresh financial

start now there are some downsides to

filing a bankruptcy you do lose your

non-exempt assets however for most

people most assets are exempt things

like your personal belongings an

inexpensive car and even in most cases

you can keep your RRSP you are required

to make a payment each month based on

your income while you're bankrupt the

government sets a limit and if your

income goes above that limit the payment

increases there are some duties you're

required to perform including making

those payments based on your income

attending to credit counseling sessions

and sending us a monthly budget now a

lot of people say to me well that's

actually a good thing they're really

happy to attend those two credit

counseling sessions where they meet with

one of our credit counselors and they've

got a one-on-one opportunity to get some

advice on how to manage their money

better a lot of people also say to me

you know I don't know where my money

goes I've never actually tracked it well

by filling out that monthly budget each

month you see exactly where your money

goes and you're able to make adjustments

and manage your money better there will

be a note on your credit report that

will stay there in the case of a first

bankruptcy for up to seven years

a lot of people say to me oh that means

I'll never be able to borrow money again

well no and in fact we can show you how

to do things like make purchases on the

internet even while you're bankrupt by

doing things like getting a secured

credit card a prepaid credit card or a

Visa debit card there are some debts

that are not included in a bankruptcy

they don't go away

things like court fines or alimony or

child support or government guaranteed

student loans if you've been out of

school for less than seven years

however most unsecured debts are

included so what do you do if you have

some assets you don't want to lose or

you're afraid your income is going to go

up and the cost of the bankruptcy is

going to increase well the solution for

a lot of people is to file a consumer

proposal this is a deal we work out with

the people you owe money to where you're

making one reasonable monthly payment

and as a result all your debts are gone

and you don't have to file a bankruptcy

to find out more you can go to our

website at hoist comm slash bankruptcy -

pros - cons where we explain all this in

more detail or you can arrange for a no

charge initial initial consultation with

one of our licensed insolvency trustees

that's the pros and cons of filing

bankruptcy

you