Should I go bankrupt? If only there were a simple yes or no answer. Unfortunately, this isn’t the type of question that can be simply answered. A definitive answer requires you to schedule a consultation with a licensed Trustee in Bankruptcy who will take the time to review your personal financial situation and understand what you owe, own, and earn. Welker and Company’s licensed Trustees in Bankruptcy consider a number of options during every initial consultation; bankruptcy is always a last resort. To know if you should go bankrupt or not we recommend making a free appointment and having your unique personal situation reviewed.
That said, we’ve provided a list of common reasons that motivate people to go bankrupt below.
1) They can’t pay their bills. If their income isn’t large enough to cover their monthly expenses then they are insolvent. If they can’t afford their monthly payments than their debt is growing, not shrinking, and they need help. When this is the case they have a number of options including a Consolidation Loan, Debt Management Plan, or Consumer Proposal. Unfortunately, Consolidation Loans can be difficult to qualify for, and Debt Management Plans require 100% of your debt to be repaid. A Consumer Proposal is an excellent way to pay what you can afford, erase your debt, and avoid bankruptcy but requires some form of excess income that people often don’t have. Bankruptcy is always the least expensive, and often the quickest way to be debt free. The Bankruptcy process can take as few as 9 months and erases all but a few types of debt. If you can’t pay your bills, consider your other options first. Bankruptcy is only appropriate when the other options mentioned above aren’t feasible.
2) You’re paycheque or bank account are being garnished. After a creditor goes to court and obtains a judgement against you they are able to garnish your wages or bank account. Only a Consumer Proposal or Bankruptcy legally protect you from garnishments. Bankruptcy stops garnishments immediately. If you’re paycheque or bank account has been garnished, Bankruptcy is a way to stop the garnishment immediately and protect your paycheque and bank account. We understand that when money is tight that missing even a small portion of your weekly wage can be catastrophic. Know that only a licensed Trustee in Bankruptcy can provide this protection.
3) You are being harassed by bill collectors. Bankruptcy stops creditor actions including court proceedings and collection calls. Only a licensed Trustee in Bankruptcy can legally provide this protection. Once you go bankrupt your creditors deal directly with your Trustee. If you receive a phone call from a creditor, simply inform them of your bankruptcy and notify your Trustee. Your Trustee will contact them and demand that they cease all collection efforts against you.
4) You can’t pay your debts in full. Whether you’ve been assessed by the Canada Revenue Agency, guaranteed the debt of a failing business, or simply bit of more than you can chew, Bankruptcy is often the only viable option to erase your debt that you’re unable to repay. There are only two legal ways to erase your debt by paying less than you owe and they are by making a Consumer Proposal or assignment in Bankruptcy. These two services are only offered by licensed Trustees in Bankruptcy like the professionals at Welker and Company. As an example, an individual without income, who has never gone bankrupt and owes $10 million dollars to unsecured creditors can erase all of his debt in 9 months for our minimum fee of $1,800.
5) You want a fresh start. If you go bankrupt you erase your debt, relieve your financial stress, and have an opportunity to start fresh. We all live and learn. Bankruptcy gives you an opportunity to start fresh and use your life experience to avoid ever getting into financial trouble again.
A Word on Assets: Keep What You Own
Many people believe that they will lose everything if they decide to go bankrupt. This simply isn’t true. The system has been designed with fairness to both debtors and creditors in mind. In Ontario, Bankrupts can retain their automobile, if worth less than $5,650, furniture and appliances if worth less than $11,300, clothing and apparel if worth less than $5,650 and tools of the trade if worth less than $11,300. Even if your belongings exceed the limits listed above arrangements can be made with your Trustee to keep your assets.
For the pros and cons of bankruptcy along with commonly asked questions, please visit our Bankruptcy service page here and contact us with any questions that you may have. While people are often hesitant to make the first call, they’re always relieved after doing so. If you’re wondering “Should I go Bankrupt”, then give us a call. You’ve got nothing to lose except your debt.