Often times, they won’t discuss these issues with family or friends because they feel embarrassed or ashamed to admit their financial troubles. These feelings can sometimes prevent people from reaching out for the help getting the fresh start they need. The following are some common misconceptions about bankruptcy in Canada that may help you better understand the process.
Myth: My employer/neighbour/extended family is going to find out about the bankruptcy
Fact: Unless your wages are being garnisheed, there is no reason for your Turstee to need to contact your employer. When you file for bankruptcy, the only people that are notified are your creditors. There are no notices published in newspapers, so unless you choose to share the information with those around you, they are highly unlikely to ever know you have filed for bankruptcy.
Myth: I will lose everything I own
Fact: Most Canadians keep everything they own when they file for bankruptcy, as opposed to what most people think. As part of the bankruptcy process, you are required to swear a statement disclosing all of your assets and liabilities. Under Ontario laws, you are able to keep your assets as long as they are under certain values. For example:
• RRSPs (except for contributions made in the 12 months prior to bankruptcy)
• Household items up $11,300
• Clothing up to $5,650
• One vehicle up $5,650
• Work tools up to $11,300
Myth: I will be in bankruptcy for an extremely long time
Fact: If you have never been bankrupt before, your first bankruptcy lasts either nine or 21 months (depending on your income), and costs approximately $1,800 (minimum fees set by Government tariff). Most people pay $200 per month for the nine month term of their bankruptcy.
Myth: I’ll ruin my spouse’s credit rating.
Fact: As long as there is no joint unsecured debt between you and your spouse and you continue to make payments on any joint secured debts you have (such as your mortgage or car loans), your spouse’s credit rating will remain intact even if you file for bankruptcy.
If you’re struggling with your debts, a personal bankruptcy may be an option for you. Take a moment to watch this video which features Doug Hoyes discussing “What is Personal Bankruptcy?”:
If you find you’re not able to meet your debt replayment obligations for any reason, keep in mind there is no charge for you to come in and meet with one of our professional team members who will be able to talk with you about your own financial situation. We’re here to help you understand your options and come up with a plan that works for you in order for you to get the fresh start that you’re looking for. Give us a call at 310-PLAN or email us to set up a meeting today.