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January 2013 - Bankruptcy is not for everyone.

Bankruptcy is not for everyone.

☳ by Adam Aspilla

Many think that when a person has a financial problem, bankruptcy is the best solution. Not at all!

The primary purpose of bankruptcy is to enable a person who is loaded with debts (incurred legally without fraud or misrepresentation), with little assets and low income to start life again free from harassments from creditors or collection agents or law suits arising from non-payment of debts.


Many with substantial assets who filed bankruptcy without seeking prior advice as to the best option in solving their financial problems lost their houses, investments and other assets.

If you have assets more than the bankruptcy law allows you to keep, bankruptcy may not be the solution of your financial problem. You have other options like: proper budgeting if you have a decent income; debt consolidation; liquidation of your other assets to pay off your debts; credit counseling and consumer proposal.


You need to explore the above options by seeking professional advice and if need be,ask for a second opinion for once you filed bankruptcy you cannot stop or withdrew from it anymore.


Moreover, you have to consider the impact on your credit bureau file (credit rating). Bankruptcy will stay in your credit bureau file for seven years for a first time bankrupt. If the nature of your job is handling cash like: cashier, treasure, finance officer or any position where you are entrusted with cash, your employer may not allow you to keep the same job.


Similarly, if you applied for any job above-mentioned you may not be hired if you were discharged from bankruptcy less than five years ago.Furthermore, if you are a licensed financial professional you may have difficulty renewing your license.


Hiding assets from creditors before filing bankruptcy or selling your assets immediately prior to bankruptcy is not a smart move, in fact, it may cost you more than choosingone of the above -mentioned options. In addition, you may commit a crime of fraud (a criminal offense) for hiding your assets from your creditors.

When you have assets more that the bankruptcy law allows you to keep and you have a decent income that you can afford to pay a portion of your total unsecure debts on a monthly basis up to sixty months, bankruptcy is not for you.


In view of the foregoing, unless bankruptcy is your only option, avoid bankruptcyand consider other options for bankruptcy is not for everyone.


Adam Aspilla is a Senior Financial Counselor of the Debt Clinic of Canada Inc. and the author of the book, You Can Negotiate All Your Debts. He also writes a biweekly column, “What Matters In Life” in “Taliba Newspaper. For free initial, professional and confidential consultation, please call 905-306-7572.