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February 2014 - Option for solving financial problem Part VII - Bankruptcypilla

Option for solving financial problem Part VII - Bankruptcypilla

☳ by Adam Aspilla

So far Debt Consolidation, Mortgage Refinancing, (equity take out), Liquidation of Assets, Debt Settlement, Credit Counseling and Consumer Proposal were discussed in the last six issues of this paper. The seventh and final option is Bankruptcy.  

Visit www.debtcliniccanada.ca to read the six options above mentioned and other previous articles.

The word “bankruptcy” is a dirty word for many people. They do not want to hear about it. However, this is the least expensive and the fastest way of wiping out your unsecure debts if your income is within or not so much above (surplus income) the standard of net monthly income for a person filing bankruptcy.

Furthermore, your assets and or equity with minimal value are exempt, meaning, you can keep them, for your creditors could not touch them as provided for by law.

In fact, you can file for bankruptcy and keep your house, car, and household items. 

In a bankruptcy, just like in credit counseling and consumer proposal, only unsecure debts are included. Should you want to keep your house or car or both (without much equity), you need to pay the lender(s) according to the terms and conditions of the purchase agreement until it is fully paid.

Processing (time period to get a discharge from bankruptcy) varies from nine (9) months to thirty six (36) months: nine (9) months for first time bankrupt, without surplus income; twenty one (21) months for first time bankrupt, with surplus income; twenty four (24) months for 2nd time bankrupt, without surplus income; and thirty-six (36) months for 2nd time bankrupt, with surplus income.

Words of caution - bankruptcy is not the best solution for every financial problem, that’s why, there are at least seven options for you to consider. Do not just file for bankruptcy if it is not really the best thing for you to do or you will later regret for you may lose your house, car, and other items you intend to keep.

Ideally, it is good for you to ask for a second or even third opinion from experts other than a bankruptcy trustee to be sure bankruptcy is your best option. Why? Because once you file for bankruptcy you can no longer withdraw from it.


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.