3 Things to Do Before Filing for Bankruptcy

By February 16, 2016Blog

We don’t want to make filing for bankruptcy out to be “no big deal” because it’s a serious matter that shouldn’t be entered into lightly. However, one of our missions as a trustee in bankruptcy is to help remove some of the stigma attached to bankruptcy filings.

Nobody should have to live their life afraid to answer the phone because it might be yet another creditor calling about a payment you can’t afford to make. With that in mind, here are three things you should do before filing for bankruptcy.

Learn What Bankruptcy Really Means

Bankruptcy is designed to provide people and businesses shelter from overwhelming debt load. It halts legal actions intended to recover debts that can’t be recovered.

It’s not a “get out of jail free” card that allows people to walk away scot-free from their financial obligations. It means that insolvent persons owing at least $1,000 and have debts that exceed their assets can get legal protection from the people and companies they owe. While in this state, a trustee in bankruptcy will work with clients to sell off assets and pay their creditors.

Some debts, including child support payments and judgements for damages in civil suits, are not affected by bankruptcy filings. It’s important to work with a trustee in bankruptcy well before filing to understand all of your options.

Consider Alternatives to Bankruptcy: Credit Counselling & Consumer Proposals

In some cases, bankruptcy might not be the best choice. With expert guidance, you might find that credit counselling can help you get a handle on your debt. Under certain circumstances, your best bet could be a consumer proposal. We can’t help you determine the best course of action until we have a chance to meet with you and review your financial obligations. The longer you wait to address your debt challenges, the harder it will be.

Understand Bankruptcy Isn’t Forever

The old wisdom used to be that bankruptcy was a permanent state, and filing for it would ruin your credit forever. The truth is, most people are discharged from bankruptcy in less than a year. Contrary to popular belief, you don’t lose all of your assets. For example, registered investments such as RRSPs, RRIFs and DPSPs are exempt under bankruptcy laws in B.C.

Bankruptcy won’t solve every financial problem, and there’s still a long road back to solvency. We can help you through every step of the way. Contact us today to get started on the best solution for your financial circumstances.