When should I file for personal bankruptcy?

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Many people are reluctant to consider bankruptcy because of the stigma around it, but it may be the most sensible option you have to get out of debt. If you are stressed out by debt collectors, high-interest rates, late fees on your credit cards, or the impossibility of paying back your debt, bankruptcy could be your best option. You just need more information about the process so you know when you should file for bankruptcy.

There is no single answer if you want to know when to claim personal bankruptcy, but there are some circumstances in which it makes sense. A bankruptcy trustee, now known as a Licensed Insolvency Trustee, will take a closer look at your debts, income, assets, and your complete financial situation. Some of the situations in which bankruptcy may make sense include these:

1) You Don’t Own Many Assets

Consumer proposals make more sense when you own a number of non-exempt assets. Otherwise, bankruptcy can make more sense. Rather than consistently paying back your debt in fixed payments for the next five years, you can be forgiven for a large amount of your debts after selling those assets you do have and contributing to any surplus income payments you may have to pay.

2) Personal Bankruptcy Is Your Last Resort

At David Sklar & Associates, we encourage people facing high levels of debt to come in sooner than later. The earlier you talk to a bankruptcy trustee, the more options you will have available to you. If you wait too long, your creditors may not accept a consumer proposal. To find out more about the process for filing a consumer proposal, check our consumer proposal FAQs or talk to a bankruptcy trustee directly.

The Consequences of Filing for Bankruptcy

There are consequences to filing for bankruptcy, but compared to giving up more and more of your income to debt repayments, they’re often worth the debt relief. Aside from losing assets such as property or investments, you will have trouble borrowing again after your bankruptcy due to your credit report.

Bankruptcy is reported on your credit report for six years after your date of discharge on your first bankruptcy and fourteen years after your second bankruptcy. However, this is less time than a consumer proposal would remain on your credit report since a consumer proposal can last up to five years and remain on your report for up to three years after you complete it.

You can spend this time rebuilding your credit using tools like secured credit cards and paying your bills, car loan payments, and mortgage payments on time. When your bankruptcy is removed from your credit report, you will be in better standing. Part of the bankruptcy process also involves credit counselling with David Sklar & Associates, and we will tailor our credit counselling to your financial situation.

The Benefits of Filing for Bankruptcy

Filing for bankruptcy isn’t all negative. There’s a reason people file for bankruptcy and it’s because they may have no other way of getting out of debt. Becoming insolvent means your assets and income are not enough to pay back your debt. Interest rates and late charges will only accumulate while you struggle to make minimum payments.

Debt collection calls and even wage garnishments can hamper your ability to keep up with basic expenses while your creditors claim your paycheque. You don’t have to stay stuck in debt. Talk to a bankruptcy trustee about getting debt relief through filing for bankruptcy.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt, call us at 1-844-962-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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Very knowledgeable, helpful and fast service
Anthony Mcfeat
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I am so delighted to have found this company. They are the best. Everyone in the office is very nice never to busy to assist you. Thank you David Sklar and Shirley and associates for being you. 😊🌺😊
Deborah
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Trina was amazing and quick. No judgement was made and they all made me feel I made the right decision. Would highly recommend them
Crystal Minaker
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Trina was very easy to work with. Any questions I had were answered promptly. What seemed like a complicated process was explained in a clear manner that wasn't at all intimidating. It made for a more comfortable experience during a turbulent time.
Eldon Aubie
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Jackie is very professional...I would recommend David Sklar to anybody especially knowing how understanding they are.
Kimberley Lyder-Niles
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I had Shirley and Kim take care of my finances. From the very first moment I spoke with Shirley I could sense how caring, professional and patient she was. She was also very understanding with my lack of financial knowledge and never made me feel dumb as some other companies have.Her and Kim were always very quick to respond to emails, always available if I called and answered my abundance of questions in such detail that I now believe I have a thorough understanding of how finances work. I am hopeful about my fresh financial start and very grateful I had the privilege of meeting and working with these two beautiful women.I also spoke briefly with Richard over zoom and he to was extremely friendly, patient and made sure I was well taken care of.I could not recommend David Sklar and Associates more. Thank you again.
Shayleen Muzi
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Good professional team! Jennifer is the best, helped me through everything and answered all my questions. Made the process easy! Would recommend Jennifer and the team at David Skylar.
gary round
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Christine and her team are amazing and professionals. I called for help and she responded right away to help me.thank you and I really appreciated for everything you do.
Marcelina Sunas
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Thank you so much for the helpYou took away the most stressful things in our lives which was our dept you guys are amazing and would recommend you to everyone
Kaitlyne Sunas
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The staff here are fantastic (Cori handled my visit) and are willing to go above and beyond to help people who need help, I recommend them 100% for people who are looking to move on in good standing.
Vito De
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