Where bankruptcy is concerned, there is usually some sense of concern about the proceedings. While it’s true that Bankruptcy is not a fun experience, it is there for a reason and, once people do get through the process, they often feel relief and see immediately why it’s so important that Canadians have the right to declare bankruptcy in the event that something is wrong with their financial situation.
After you declare bankruptcy, your trustee will take any assets that have not been declared exempt during the proceedings and sell them. That money will go to pay off your creditors. As Industry Canada makes clear, it’s vital that you report all of your assets to your trustee. While many assets are exempt from seizure by the trustee, not all assets are protected. Once your trustee has taken care of this, they will also take care of distributing all that money to your creditors. You won’t have to deal with your creditors directly anymore.
In fact, you won’t even have to notify your creditors that you declared bankruptcy. Your trustee will take care of that, as well. For some people who are facing crushing financial debt and all of the stress that goes along with it, having their counsellor take care of all of these different aspects of their case is sometimes worth it in and of itself. Rather than having to deal with the unpleasantness of talking to creditors, these individuals have a trustee handle all of it and they can step back and take a breath.
When It’s Done – At that point, you are freed from your debts!
After you have completed all of your required duties, and the Trustee has completed the administration of bankruptcy, your bankruptcy should be discharged. Your required duties will be clearly explained to and can include submitting information about your income and attending two credit counselling sessions.
The real advantages of bankruptcy, however, do not really become apparent until that discharge. At that point, you are freed from your debts. Aside from any secured debts that you may have, you will be free and clear, and able to start over financially. Obviously, there will be some impact on your credit rating after you declare bankruptcy and that may mean it’s a little bit more difficult to get extra money when you need it. On the good side, however, whatever you have gone through due to bad financial decisions or changing income situations will finally be over.
A Fresh Start
Despite the fact that declaring bankruptcy can be difficult to do, many people who go ahead and do it are glad that they did. It means that the debt is finally gone. There are no calls from creditors, there are no threats from creditors and, when you decide to work with creditors again, you can make wiser decisions based upon the experience that you have gone through. Talk to a financial counselor about the implications of declaring bankruptcy and how your debt is likely to be handled if you go ahead and take that step.