What are the Main Advantages Of Filing Bankruptcy?
However, this differs from individual to individual.
Debt problems take many forms, meaning one solution might not be perfect for the entire population.
If you need debt relief help, and you’re considering bankruptcy, then it helps to know what benefits may lie in store.
Consequently, I’ve identified six advantages of filing for bankruptcy to help you learn more about the process and where it leaves you.
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#1 Instant protection from creditors
When you’re indebted to creditors, they can take action to try and get the money you owe.
This includes seizing your wages, freezing your bank account, and enforcing court action against you.
It’s incredibly stressful, particularly when you’re actually trying to find a solution to the problem.
Filing for bankruptcy in Canada will offer protection from your impatient creditors.
It’s a legal process that creates something called a stay of proceedings.
In short, this stay prevents your creditors from taking any action unless the Bankruptcy Court gives permission.
So, it keeps them off your back for the time being.
#2 You can be discharged within 9 months
After filing for bankruptcy, you can be completely discharged from it in as little as 9 months.
This happens when you follow all the rules and meet any payments to your trustee on time.
If you fall below the government income standards for bankruptcy in Canada, then you qualify for the 9-month discharge.
Even if you are above this threshold, you can be discharged in 21 months.
So, within two years, anyone in Canada can be free from bankruptcy.
#3 The rules are the same throughout the country
In some countries, bankruptcy laws alter from state to state or province to province.
This isn’t the case here.
One of the key advantages of filing bankruptcy is that it is the same no matter where you live.
All cities and areas follow the same rules.
The only bankruptcy laws the provinces and territories set themselves are the exemption limits.
#4 Creditors have to follow the rules
Speaking of the rules, your creditors have to abide by them as well.
When you file bankruptcy, your debts are settled.
All of your unsecured creditors are dealt with during this process.
It’s against the law for them to reject the proposal and keep demanding money.
This is in contrast to many other debt relief ideas that depend on your creditors agreeing to them.
For example, a consumer proposal could help you agree more manageable payment terms to your creditors.
However, this only works when they agree with what you’ve put on the table.
There’s no law stopping them from say no and continuing to seize your money.
Bankruptcy stops this from happening as they have to obey the laws.
#5 It costs less than you think
Most Canadians assume that the cost of bankruptcy equates to how much money you owe your creditors.
In effect, the more debt you have, the more expensive it will be.
This is simply not the case at all.
In fact, it has nothing to do with your debts, and everything to do with your total household income.
You must factor in your personal share of the income, along with the size of your household.
This means how many people live in your house, not the physical dimensions of it.
As it happens, bankruptcy can cost under $2,000 for the majority of people in Canada.
Obviously, the higher your income, the more it tends to cost.
#6 Get rid of your debts and break free from creditors
Finally, the main advantage of filing bankruptcy in Canada is that you get rid of your debts.
You no longer have the huge weight hanging over you every month.
You don’t dread payday as you try to figure out how much money you’ll have leftover after your creditors have taken their money.
The problem with debt is that it is a vicious cycle.
The more you owe, the more debts you start to have to more creditors.
Bankruptcy offers a solution to the most severe debt problems.
Wipe your slate clean and be free from debts and creditors, ready to start fresh when you eventually get discharged.
If you would like to know more about the benefits of filing bankruptcy, then don’t hesitate to give us a call.
We offer debt relief services to all Canadians, regardless of your financial situation.
A consultation can help you decide if bankruptcy is right for you, or if other ideas are worth pursuing instead.
Call us now or fill in an evaluation form today.
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