Living in Ontario isn’t cheap. And the past year has been financially difficult for many people. If you live in Ontario and think you may have to declare bankruptcy, we’re here to tell you it’s not the end of the world.
While no one wants to declare bankruptcy, sometimes it is the best thing you can do to get a fresh start when your debts have piled up. And if you do need to declare bankruptcy in Ontario, then the longer you put it off, the more stressed you’re going to end up.
There are so many reasons why people are afraid to declare bankruptcy. They fear that:
- They’ll lose everything
- People will find out they’ve filed for bankruptcy
- They are irresponsible for not paying back their creditors
- It won’t work to erase their debts
We can help you understand why these fears are unfounded and how declaring bankruptcy in Ontario might be the best financial decision you can make.
You Fear You’ll Lose Everything
A lot of people are worried that if they declare bankruptcy, they’ll lose everything they own. And they won’t be able to keep even their clothes or their family heirlooms. This isn’t the case.
There are a lot of assets that are exempt from bankruptcy, including:
- Any property you are holding in trust.
- Your pension, most RRSPs and insurance policies.
- Personal effects and household goods, although there is a limit to the value of furnishings that are exempt. In Ontario, it’s currently $13,500.
- One free and clear , up to a value of up to $6,600. If your car is appraised at more than $6,600, you would have to pay the trustee the difference. For example, if your vehicle’s value is $7,600, you must pay $1,000 into your bankruptcy estate to keep it
- Tools you need to do your job, up to a value of $11,300.
You may or may not be able to keep your house if you declare bankruptcy in Ontario. It depends on two things:
- The value of your house
- How much you owe on the mortgage
If you have less than $10,000 in equity in your home, then it will be exempt from seizure. If your equity is higher it will need to be dealt with for the benefit creditors.
So while bankruptcy in Ontario can have an impact on your life, you won’t lose everything!
You Fear That People Will Judge You
People fear filing for bankruptcy because they think everyone they know will find out and judge them. They think they’ll be seen as irresponsible and careless. However, the chances of anyone finding out you’ve declared bankruptcy are relatively low.
Bankruptcy in Ontario is a legal process, so there is a public record of it. However, someone would have to go to the time and effort to find the registry and then pay a fee to check it — something most of your friends and family are very unlikely to do.
The chances of anyone finding out you have declared bankruptcy are meagre. And even if they do find out, it’s doubtful they will judge you for it. After all, the past year has been very hard on everyone financially, and they may even be in the same boat.
You Fear That You Are Irresponsible
You may think that by declaring bankruptcy, you’re being irresponsible to your creditors. And while it’s true that if you file bankruptcy, you won’t be paying your full bills, you didn’t sign up for credit cards intending to defraud the companies.
Credit card companies do well in both boom and bust times. They factor people going broke into their costs of doing business. They’ve likely already made a lot of money off you in interest as long as you’ve been keeping up with your payments — not to mention late fees and penalties!
Sometimes if you continue to pay credit card companies instead of declaring bankruptcy, you’ll end up further in the hole. You may even have to deal with collection calls and all the added stress that comes with them.
You Fear that Bankruptcy in Ontario Won’t EraseYour Debt
While filing for bankruptcy in Ontario doesn’t make it possible to discharge all your debts, you’ll undoubtedly be able to discharge the majority of them. These are all types of unsecured debts that are removed during bankruptcy in Ontario:
- Credit cards
- Bank loans
- Lines of credit
- Payday loans
As you can see, you can discharge a lot of your debts by filing for bankruptcy in Ontario. This will help you get rid of at least some of your debts, leaving you free to work on paying other debts.
How can Kevin Thatcher help me with bankruptcy in Ontario?
We can help you by:
- Working with you to figure out what kinds of debt you have.
- Determine how many of those debts you can discharge during bankruptcy
- Help you file the paperwork for bankruptcy if we determine that’s your best option
- Discuss other options — such as a consumer proposal or debt consolidation — if bankruptcy isn’t the best option
Contemplating bankruptcy in Ontario can be scary – but you don’t have to do it alone. Our Licensed Insolvency Trustees can help you and show you it’s not the end of the world.
Reach Out To Us Today
You’ve learned today that bankruptcy in Ontario isn’t as scary as it seems:
- You won’t lose everything.
- It’s very unlikely anyone you know will ever find out you filed.
- You aren’t irresponsible by not paying back your creditors.
- It will work to erase a lot of your unsecured debt!