What are the Most Common Fears of Bankruptcy?
Common Bankruptcy Fears Debunked
In Canada, bankruptcy is rapidly on the rise.
Affecting hundreds of thousands of people every year, it’s a devastating statistic.
Seemingly the only path to take for those in debt, they don’t know where else to turn.
And while there are, of course, alternatives to filing for bankruptcy (i.e. filing a consumer proposal) for many, this is the more suitable option.
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Perfectly natural worries, it’s important to research into the ins and outs of it, along with seeking expert advice from a trustee.
Here are some of the most common fears that bankruptcy brings with it:
It’s a complicated process.
While filing for bankruptcy does involve a lot of paperwork, an expert Licensed Insolvency Trustee will make the process as straightforward as possible for you from start to finish.
Using their years of experience in the industry, empathy and knowledge, they’ll ensure that you’re never left in the dark.
It’s a One-Size-Fits-All Solution.
Often, one of the biggest fears that people have about bankruptcy is that all options are the same.
However, when you opt to file for bankruptcy, you’ll receive a solution that fits your requirements.
It Will Have a Devastating Effect on my Credit.
Another significant fear that people have is that bankruptcy will ruin their credit forever.
And while it does, of course, have an impact on your credit (staying on your report for up to 7 years), once your debts are consolidated and you start to make repayments, you’ll be able to start to rebuild it straight away.
Bankruptcy Can’t Eliminate All of My Debts
Often, people want a solution that will eliminate all of their debts in one.
And while bankruptcy will only eliminate unsecured debts it’s still a worthy solution.
Certain debts, like student loans are excluded, however, it can be a useful way of eliminating any bank loan, credit card debts, tax debts or payday loans.
I Am The Root Cause of my Bankruptcy.
It’s easy to blame yourself when it comes to your financial situation.
But in fact, only a small portion of bankruptcies are down to handling financial management poorly.
Typically, bankruptcies are most common for those who have been made unemployed, had a relationship breakdown or have suffered an illness.
I Will Lose All My Assets.
In Canada, there is a law that states certain exemptions for what assets you can keep and what you may need to hand over as a form of repayment.
With the vast majority of people not having to give any of their assets, you’ll be in the best position possible.
Of course, everyone is different.
And therefore it’s a good idea to seek professional advice from the start.
Everyone Will Find Out That I Filed for Bankruptcy.
Perhaps the biggest common fear that people have is that their friends, family or colleagues will find out that they filed for bankruptcy.
However, it’s good to know that your licensed trustee will only inform people who need to know about your bankruptcy.
Usually only your creditors, you can have the peace of mind that no one else will know about it – unless you tell them of course.
Even though they are filed in public court records, it’s not widely published.
You Will Never Qualify for a Loan, Credit Card or Mortgage Again.
If this is one of your fears, don’t worry!
You’ll be able to qualify for one of these again.
The moment that your discharge is granted you’ll start to rebuild credit again – bringing you steps closer to applying for a loan, credit card or mortgage.
Dispelling Common Fears of Bankruptcy Since 1999
For over 20 years, Bankruptcy Canada has been guiding people on how to file for bankruptcy, the steps associated with it, etc.
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