I’m On Income Assistance, Will Bankruptcy Help Me?

Do I Need To Go Bankrupt I’m On Income Assistance?

In many cases, individuals who are receiving income assistance wonder, “I’m on income assistance, will a bankruptcy help me?”. This article delves into the possibilities and implications of declaring bankruptcy when you’re on social or income assistance.

Understanding Bankruptcy and Income Assistance

Bankruptcy, in simple terms, is a legal status of a person or entity that cannot repay the debts it owes to creditors. Social assistance, on the other hand, is governmental support provided to individuals and families who have low income. But how do these two interact? Is bankruptcy an option for those on income assistance?

The Interplay Between Bankruptcy and Social Assistance

Even when you’re on social assistance, it’s still possible to file for bankruptcy. However, it’s important to know that this doesn’t mean you have no alternative. Sometimes, you might be “creditor-proof”, i.e., there isn’t much that creditors can do to get the payment from you.

Creditor-Proof: What Does It Mean?

Being “creditor-proof” implies that your income is untouchable by creditors. Most creditors can’t garnish social assistance payments, meaning they can’t take the money directly from your account to satisfy the debts you owe.

The Role of Creditors: What Happens If You Can’t Pay?

If you’re unable to pay your debts, creditors will initially persist with collection calls. However, if they see no potential of you paying, they might eventually write off the debt and cease the calls.

Possessions and Bankruptcy

Your possessions can influence the decision to declare bankruptcy. If you own something that isn’t protected from creditors, it may change the bankruptcy advice. It’s crucial to understand the list of things that creditors can’t take away from you, often referred to as “Exempt Assets”.

Exempt Assets: What Can’t Creditors Take?

Exempt assets are the possessions that can’t be used to pay off your debts. The list of exempt assets varies by jurisdiction, but it typically includes necessities like clothing, household goods, tools for your trade, and a certain amount of equity in your home and vehicle.

Bankruptcy Costs: What Do You Need to Pay?

In most bankruptcy cases, the only payments you’d need to make are to cover the bankruptcy costs. These costs include the fees for the bankruptcy trustee, the person appointed to administer your case, and mandatory counseling sessions.

Getting Help: Where Can You Turn?

If you’re pondering, “I’m on income assistance, will a bankruptcy help me?”, it’s advisable to reach out for professional advice. You can contact bankruptcy trustees or financial advisors who can guide you based on your specific circumstances.


Bankruptcy is a significant decision that comes with both benefits and drawbacks. It’s crucial to understand what it means for you, especially if you’re on income assistance. Remember, every situation is unique, and professional advice can be invaluable in making the right choice.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.