Introduction to Bankruptcy

Bankruptcy

Financial problems can arise at any time and for a variety of reasons, from the loss of employment to marital break up or simply too much consumer credit.
When faced with debt beyond one’s control, many people do not know where to turn and need a source of information that is easily accessible without causing additional stress and embarrassment.

“Bankruptcy is a legal process that permits honest, but unfortunate debtors, the ability to obtain a discharge from his or her debts. The purpose of the Bankruptcy is to allow debtors, who would otherwise be unable, the ability to start over financially. “

What qualifies as a Bankruptcy?

Any person or company who resides or carries on business in Canada whose liabilities to creditors amount to at least $1,000 and:

  1. Is unable to meet their payment obligations as they generally become due; or
  2. Have ceased paying current obligations in the ordinary course of business as they generally become due; or
  3. The total of all a persons property sold at fair market value, would not be sufficient to enable the debtor to pay all their debts. 

A person or company meeting the above requirements technically would qualify for bankruptcy.  
** Note –  Although one may “qualify” for bankrupty, it is not always your best option.  You are encouraged to speak to a Licensed Insolvency Trustee to go over all of your options.

What are some of the signs that you may be too deep in debt?

 If you can relate to any of the following you should take steps to correct the problem before it develops into a serious financial problem.

  • You continually go over your spending limit
  • You use your credit cards as a necessity rather than a convenience
  • credit cards are at their maximum
  • You only pay the interest or minimum charges on your monthly bills
  • You are always borrowing money
  • You have not been reducing your overall debt over many months
  • Creditors are harassing you for payments
  • Utility companies have or are threatening to cut off services
  • You owe money for your taxes and are unable to pay
  • Your debts are affecting other areas of your life (health, family, etc)
  • You have a bad credit rating
  • The bank has turned you down for a consolidation loan
  • Assets have been seized by an unpaid creditor
  • Your business is failing an you guaranteed business debts
  • You are currently unemployed and have no funds to pay your previous debts.

 

 

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