Making the decision to file for personal bankruptcy can be a stressful one. Often when I meet with someone in financial distress they tell me they are losing sleep, it’s affecting their personal relationships and they just don’t know how they’re ever going to get out from under their debt. My advice is to think of personal bankruptcy as your opportunity for a fresh start. Your trustee is going to guide you through the process, but the following are some tips to keep in mind to help make the whole process less stressful for you:
1. Make a list of all your debts
Include everything, no matter how small. Having a list ready will help you to be prepared for the initial conversation with your trustee. That way, you know exactly how much you owe and your trustee can better assess your situation. Remember to write down any collection agencies that have been contacting you; your trustee will need to know who they are, so that they can stop the collection calls.
2. Get your taxes filed up-to-date
Maybe you’ve been avoiding filing because you knew you wouldn’t be able to afford your tax bill. Now is the time to get everything up-to-date and get all of those tax skeletons out of the closet. Your trustee will ask that you complete this step before signing, and by getting yourself caught up before you meet with them, it is one less thing to worry about.
3. Gather paperwork regarding your assets
Statements for assets like RRSP accounts, or RESP accounts for your children, mortgage statements, and vehicle statements. Having these documents ready will help your trustee compile the information needed to complete your file.
4. If you’re employed, save your recent pay stubs.
Getting in the habit of keeping your pay stubs can save you time throughout the bankruptcy process. As part of your bankruptcy you are required to report your monthly income and expenses to your trustee, along with a copy of your pay stubs. If you’re self employed, create a summary of what you’ve been earning in the last few months – both what you have sold/invoiced and your operational costs.
5. Open a new bank account at a bank where you do not have debt.
Once you have the account open, transfer your payroll to be deposited into that new account. You’ll also need to make sure things like rent or mortgage payments are now coming out of this new account. A helpful tip is to look at your past month’s statement for your old bank account and make sure that any payments you see listed, that you plan to continue, are transferred to the new account. If you have outstanding debts at your current bank, your trustee will recommend that you open a new account, so why not do it right away to save yourself the stress of completing all of your bankruptcy duties at once.
6. Select a trustee who you’re comfortable with.
Once you sign your personal bankruptcy paperwork with a trustee, you are committed to working with that trustee for the duration of the bankruptcy process; so make sure it’s someone that you can ask questions to and who helps you feel at ease. This is a sensitive process and you should feel comfortable disclosing anything about your financial past with your trustee.
Filing bankruptcy should not be stressful. It should feel like a new beginning and an opportunity to start over. Being proactive can save you time, energy, and piece of mind that you have planned for the process. If you’re considering filing bankruptcy in Toronto, contact a Licensed Insolvency Trustee to get the help that you need. Book a free, no obligation consultation with a professional that will help eliminate the financial pressure that you’re currently experiencing. Stop stressing about your finances and start on the path towards a fresh financial future.