Bankruptcy can be beneficial in many ways, including financially and emotionally. Bankruptcy can alleviate a considerable amount of financial stress from your life by giving you a fresh financial start and helping you to regain control over your financial situation, in which you are able to move past your financial burdens and rebuild your financial life.
Personal bankruptcy also ends the harassing phone calls which you may receive from creditors, as well as the legal action from creditors is stopped, providing you with peace of mind as your creditors are no longer pestering you. Bankruptcy also protects certain assets as most personal belongings are exempt from seizure, and in some cases, you may even be able to keep possession of your house and/or car.
Personal bankruptcy also freezes your interest payments in which the interest on your debts will stop building, as well as it eliminates the garnishing of your wages, and presents a cost-efficient debt solution. Filing for bankruptcy can make your life relatively free of financial stress.
However, filing for bankruptcy is not always the best solution. Bankruptcy may damage your future credit, making it difficult for you to obtain credit or loans in the future as it basically sets your credit scores at zero. Bankruptcy also includes some cost including a monthly surplus income payment, administration fees, relinquishing of certain taxes, and loss of income tax refunds prior to and during bankruptcy.
Further, you are required to surrender certain assets that are not exempt from seizure, including home equity, the value of possessions above the provincial exemption threshold, quarterly GST credits, tax refunds prior to bankruptcy, RRSP contributions that you may have made in the last year, and investments such as Canada Savings Bonds.
