Bankruptcy is the last choice for most individuals but, it is good that this process is available because without it, there might be no relief from the stress of unmanageable debt.
Personal bankruptcy provides a financial fresh start when other options are not practical. Even if you don’t want to use bankruptcy to resolve your situation, you should still understand how it works and don’t ignore the option just because of the “B” word. When assessing an individual situation, we review all relevant facts about assets, liabilities, income, family situation, cause of financial difficulty and outlook for the future. These are all considerations in determining what options are practically available so that you can choose the one that is best suited to you.
Will I have to give up my assets?
In most cases, you do not have to give-up any assets (unless you want to) if you go through bankruptcy. If there is equity in assets, you will have to settle the equity with the trustee. If your income is above a certain threshold, you will have to make payments based on your income level. How your assets will be dealt with and how much you will have to pay will be reviewed with you before you file for bankruptcy so you understand exactly how bankruptcy would work for you.
The bankruptcy process also provides individuals with two mandatory counselling sessions to help you understand how you got into financial difficulty, improve your basic budgeting skills and provide you with information on understanding and starting to re-build your credit.
Sometimes, bankruptcy can actually be the most efficient way to get back on your financial feet and start to rebuild your credit.