Five Things to Know about Bankruptcy and Insolvency in Canada
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There are things in life that are difficult to talk about, and because of this difficulty we avoid the topic. The issue doesn’t go away though, in fact, it just gets worse.
I have a great big, beautiful dog named Aurelius. He’s a cross between a pure-bred Pyrenees Mountain Dog that escaped the pen, and the neighbouring farm dog. He is a product of love, and he is loved by my family very much.
One thing that we are not too crazy about however, is having to clean up all of his winter defecations from our backyard in the spring. This is, of course, what all dog lovers dislike about having a dog, but this issue can’t be ignored.
Life is exactly like this; at some point we have to deal with certain issues that aren’t always easy - if you know what I mean.
That is what this blog is about, helping the community to understand how bankruptcy and insolvency law works in Canada.
This is an important topic because there are companies in the community that aren’t licensed to provide bankruptcy and insolvency services (this can only be done through a Licensed Insolvency Trustee like Bromwich+Smith, and unfortunately there is information that has been published that is inaccurate. The goal is to provide you with factual information regarding your rights to restructure and manage your debt under the bankruptcy and insolvency law in Canada.
The topic of bankruptcy and insolvency is difficult to face (much like my backyard in the spring) we, as a people, may accept that all information that is being published online is accurate and reflects the law, rather than seeking the truth from a professional at a Licensed Insolvency Trustee firm such as Bromwich+Smith.
It’s a really crazy (and sad) negative feedback loop. And I know that this blog is not going to correct it entirely, but it is a start. The situation is only going to be corrected when people understand that if they have questions about debt and insolvency (if they are having difficulty or inability to pay their debt) they should be speaking directly with Bromwich+Smith, as a Licensed Insolvency Trustee. We are but a phone call away.
So, without further ado, here are the five things you should know about bankruptcy in Canada:
- Bankruptcy is a legal process not a moral one. Anyone that is struggling with debt has the right to go bankrupt. There is not a certain amount of time that you have to be struggling and suffering with debt issues before you seek the assistance of a professional in the community, such as Bromwich+Smith, as a Licensed Insolvency Trustee.
- Debts that are owed to the government can be included and forgiven in your bankruptcy, and you do not lose all your assets (like in monopoly), there are generous bankruptcy exemptions for personal property (including RRSPs, pensions, a vehicle, home equity, etc.) Feel free to call and speak to us about your unique personal situation. You can learn more about bankruptcy exemption here.
- Bankruptcy is not about failing and giving up, bankruptcy is about redemption and starting again. The process of bankruptcy lasts from nine to 21 months (based upon your earnings and the number of dependants that you support), or between 24 and 36 months if you have been bankrupt before (yes, you can go bankrupt more than once).
- You will be able to borrow money and get credit again in the future. Bankruptcy is a rehabilitative and redemptive process. It is designed to help you get out from under the crushing burden of your debts so that you can be welcomed back into the credit community and start again with a clean bill of financial health and a new lease on your life.
- Your creditors understand and plan for the fact that some of the loans that they make will not be able to be paid back due to people restructuring under bankruptcy. Just like I outlined in point one above, the creditors know that bankruptcy is a legal process not a moral one.
So there you have it, five things you should know about bankruptcy, straight from the horse’s mouth.
How will your bankruptcy look? Well, that’s something that is better appropriately explored in a conversation with one of our Debt Relief Specialists here at Bromwich+Smith, and they are only a phone call away. But I will tell you this, most people we speak to don’t even have to file bankruptcy, they are eligible to file a consumer proposal.
When it comes to your physical health, we seek help from a professional doctor that holds a medical license. When it comes to your financial health, we should seek help from a professional that holds an insolvency license, such as Bromwich+Smith, a Licensed Insolvency Trustee.
It is important to know that there are solutions to support you with managing your debt and yes, you do have a legal right to restructure your debt in Canada, which may include bankruptcy. If you are struggling to manage your debt, no need to wait until things get worse, feel free to book a free consultation with one of our Debt Relief Specialists here at Bromwich+Smith. Our goal is to provide you with a solution to your unique financial situation.
If you need help, ask us your questions, or book your consultation today. No matter how difficult or complicated your financial situation may seem, you can rest assured there are options available to get you out of the perpetual cycle of debt. Our Debt Relief Specialists are available by phone at 1.855.884.9243 or you can request a call back via our contact us page. There is no need to travel to a local office. At Bromwich+Smith Licensed Insolvency Trustee, is now offering video appointments, with all services available from the comfort of your home.
By Shawn Stack, CIRP, LIT
Shawn is a Licensed Insolvency Trustee and was the co-founder and VP of the Insolvency Practice at Bromwich + Smith. While he is now retired, Shawn was a widely sought out mentor and trainer for new trustees, and a respected thinker, writer, and speaker on all things related to insolvency and budget matters. His opinions and advice remain at the forefront of thinking on Canadian insolvency practice.