Pros and Cons of Bankruptcy

The Good & Bad of Filing for Bankruptcy

The advantages & disadvantages of filing for bankruptcy.

Pros of Filing for Bankruptcy

The pros and advantages of filing for bankruptcy include;

collection calls will stop,
wage garnishments will stop, except for Family Responsibility Payments,
Most debts and loans are cancelled,
filing for bankruptcy gives you a fresh start.

When you file for bankruptcy, all debts are cleared, wage garnishments and collection agencies will stop calling you.

Cons of Filing for Bankruptcy

The cons and disadvantages of filing for bankruptcy include:

bankruptcy affects your credit rating,
- most people who are considering filing for bankruptcy, the credit rating is probably bad already.
you will have to report your monthly income,
- what payments you made,
- attend two credit counselling sessions,
- and provide all tax information to the trustee.
you lose any non-exempt assets, (What You Lose in Bankruptcy)
you have to make payments based upon your income (Cost to File for Bankruptcy)

When considering the pros and cons for filing for bankruptcy, the pros are much more advantageous than the cons.

After a bankruptcy is discharged, the loans are cleared, your stress will drop dramatically and you’ll get a fresh start.

Once I was laid off work the bills couldn’t be paid, my wife and I fell further into debt. A friend referred me to YanchDey who really helped. The bankruptcy has passed, I’m back to work and stress free, Thanks again, I highly recommend these trustees. Vecus Bennett, Ajax

Benefits of Filing for Bankruptcy

One of of the benefits of declaring bankruptcy is that the trustee will notify your creditors that you are unable to pay your debts.

Creditors must deal directly with the trustee (the trustee will deal with them not you).

Where wages have been garnished, the garnishment will be removed.

When you go bankrupt, you assign your assets (the things you own) to the trustee for the benefit of your creditors, except assets are exempt from seizure.

Even if an asset isn’t exempt, you often have the option to keep it by simply paying its value into your bankruptcy.

Once the process is completed, the debtor is relieved of all debt obligations.

Speak to an Insolvency Trustee

Bankruptcy Trustee Kelly Dey — Kelly Dey Insolvency Trustee

Questions about insolvency and bankruptcy? I invite you to call our office to speak to myself or one of our insolvency trustees.

We’re happy to speak over the phone or in-person at one of our offices.

Where you have questions or need some advice, please feel free to give us a call without cost or obligation.

Call us today at 905-721-7506.

R. Mitchell

6 days ago

★★★★★ Kelly and her staff made the bankruptcy process very easy. It was a relief to my wife and I to have professionals such as these, very supportive. Thanks again

D. Ganguli

2 weeks ago

★★★★★ Some bad financial decisions including being laid off resulted in huge credit cards bills that we were never going to be able to pay off. When we finally got fed up with the collection calls, my husband and I decided to get some help. We decided on bankruptcy giving up many things we didn’t really need, and the counseling was great for us at our age. It wasn’t easy, but we are much happier and debt free. Thanks Again, would recommend.

Jo-anne Lee

1 month ago

★★★★★ I had a student loans of $14,000, and a balance on my credit card, then I received a letter of garnishment. A credit counselor recommended I look into filing for bankruptcy. The bankruptcy trustee was easy to speak with and listened to me. Together we discussed the pros and cons and options available. The bankruptcy will pass, but I’m much happier without the burden of debt in my life. I should have gotten the financial counseling years ago.

Christia McIntyre

4 weeks ago

★★★★★ Professional and friendly, on their advice I did a consumer proposal vs bankruptcy and will be completely out of debt in 2.5 years!! Many thanks

S. Lee

1 month ago

★★★★★ They were completely upfront about what my options were, and gave me a clear cut plan about how I could stop the calls, bill collectors and bills that just kept getting bigger and bigger. Filing for bankruptcy was not an easy decision but the trustee was there for me all the way. Thanks Again!

What happens when you declare bankruptcy in Ontario?

A: When you declare bankruptcy in Ontario, you will be required to surrender any non-exempt assets to a Licensed Insolvency Trustee (LIT) who will sell them to pay off your debts.

Your creditors will be notified and instructed to stop all collection actions against you. You will also be required to attend credit counselling sessions and make regular payments to the LIT.

Once the bankruptcy process is complete, you will be eligible for a discharge from your debts, which means you will no longer be responsible for paying them off.

Who qualifies for bankruptcy in Ontario?

A: To qualify for bankruptcy in Ontario, you must owe at least $1,000 in unsecured debts and be unable to pay them back.

You must reside in Canada or the majority of your assets are held in Canada. Additionally, you cannot have filed for bankruptcy within the past seven years.

How long is bankruptcy process in Ontario?

A: The length of a first-time bankruptcy in Ontario is typically nine months. However, if your income is above a certain threshold, you may be required to make additional payments for a longer period of time.

It is important to note that bankruptcy should be considered as a last resort option. There are alternative debt relief options available, such as consumer proposals, debt consolidation, and credit counselling. It is recommended to seek the advice of a Licensed Insolvency Trustee to determine the best option for your individual financial situation.

How much does it cost to go bankruptcies in Ontario?

A: The cost of filing for bankruptcy in Ontario can vary depending on your individual circumstances. However, the fee for filing bankruptcy is typically $1,800.

What do you lose if you declare bankruptcy in Canada?

A: When you declare bankruptcy in Canada, you may be required to surrender any non-exempt assets to a Licensed Insolvency Trustee (LIT), who will sell them to pay off your debts.

This may include your home, car, and other valuable assets. You may also lose your credit cards and be unable to obtain credit for several years. Most personal items you keep, cars under 10,000 dollars, tools of the trade. Give us a call and we can tell you in more detail.

What debts survive bankruptcy?

A: Some debts are not discharged by bankruptcy, including student loans that are less than seven years old, fines, court-ordered restitution, and child support payments.

Can I keep my car if I declare bankruptcy?

A: Whether or not you can keep your car when you declare bankruptcy depends on the value of the car and the amount of equity you have in it.

If the equity in your car is less than the exemption limit, you may be able to keep it.

How much do you pay monthly for bankruptcies?

A: The amount you pay monthly for bankruptcy depends on your income and expenses.

You will be required to make regular payments to a Licensed Insolvency Trustee (LIT) during the bankruptcy process, which will be used to pay your creditors.

Can you buy a house after bankruptcy Ontario?

A: Yes, it is possible to buy a house after bankruptcy in Ontario.

However, it may be more difficult to obtain a mortgage and you may be required to pay a higher interest rate. Many people work on rebuilding their assets and credit rating for a while before considering a home purchase.

What happens 12 months after bankruptcy?

A: After 12 months, you may be eligible for a discharge from your debts, which means you will no longer be responsible for paying them off. You’ll be able to start fresh to rebuild your credit and financial health.

However, certain debts may survive bankruptcy, such as fines or debts resulting from fraud.

What happens 5 years after bankruptcy?

A: After five years, your bankruptcy will be removed from your credit report and you may be eligible for better credit options.

However, bankruptcy can remain on your record for up to seven years, which may affect your ability to obtain credit or employment.