Personal bankruptcy is a very misunderstood process and, as a result, many people want to avoid filing bankruptcy or even considering other legal debt help options. As Licensed Insolvency Trustees we help people with debt every day and have put together a brief list of some common areas of concern that we get asked about regularly.
How Bankruptcy Affects You
- Creditors Won’t Contact You
Bankruptcy provides what is often very welcome relief from creditor contact. Once your bankruptcy has been filed and registered, your creditors will be barred from contacting you for payment and collection action. This is due to the bankruptcy acting as a “stay of proceedings”, which is a legal term that essentially means that actions against you need to stop immediately.
- Debts are Written-off
From credit card debt to tax debt (and nearly everything in between) – filing bankruptcy in BC will serve to write-off virtually all debts. Most people will only pay the administrative fees for their bankruptcy, so their debts are effectively eliminated at very little cost comparatively.
One other big benefit of filing bankruptcy: You can sleep again! Many of our clients describe filing bankruptcy as lifting a huge burden off their shoulders.
How Bankruptcy Does Not Affect You
- Getting a Job
Declaring bankruptcy in Canada in no way prevents you from changing employers or starting a new career. There is no automatic notification to your employer when you file a bankruptcy. The exception to this is if your wages are being seized by a creditor, your Licensed Insolvency Trustee would notify your employer that this wage seizure must stop immediately upon filing the bankruptcy.
- Making your Spouse Pay
Filing a bankruptcy does not mean your spouse is responsible for paying your debt. Unless your spouse has specifically co-signed (guaranteed) the debt, there is no automatic liability by your spouse to pay the debt if you file a bankruptcy.
- Leaving the Country
Filing a bankruptcy does not bar you from leaving the country, whether it be for vacation or a permanent relocation. Bankruptcy does not impact your passport or citizenship. If you move out of Canada while you are still in bankruptcy, you will simply complete any remaining requirements from your new location.
If you are avoiding bankruptcy because of these (or any other) concerns, we invite you to contact us and get the facts. We believe it is essential for consumers to make informed decisions.