Bankruptcy in Alberta
The arguments of individuals who are unable to pay their debts are intensified with the present recession in the economy. Although this worsens the situation and financial struggles of debtors, it does not directly relate to the fact that there are still Canadians who mismanage their debts. This poor management concerns mortgages, payday loans, student loans, and credit card debts, resulting in the inevitable bills every month.
In Alberta, if you are struggling to cope up with your debts to debtors, there are solutions that you can take to lessen your burden; these solutions aim to lessen or diminish the funds that you owe to your creditor(s) including the interest rate of what you owe. The feasible options that you can consider are credit counseling, debt consolidation loans, debt settlement, and consumer proposals. All these debt relief solutions will help you in managing your finances to clear your debts in no time.
However, regardless of the help available, some Albertans are still dwelling with financial strife; thus, seeking to file for bankruptcy as their last resort to overcome indebtedness. So, when everything else fails, the only hope that remains is filing and declaring for bankruptcy.
In This Guide...
Personal Bankruptcy Information
Bankruptcy as the last option to take is distinct compared to the other debt relief options. This is because it eliminates your unsecured debts, which gives you a brand new start to restore your financial status. Once you are discharged from bankruptcy, you can be debt free but with few exemptions. This means that as soon as your discharge, you will no longer be liable to your unsecured debts except for the secured ones.
You are qualified to file for bankruptcy in Alberta if you’re unsecured debt amounts to at least $1,000. This is possible even if it is highly recommended to file for bankruptcy if the amount is too much to bear. Should you wish to file for bankruptcy in Alberta, you will have to contact a licensed bankruptcy trustee that will put your assets in a trust. Your trustee will use the trust in paying your creditors a portion of the amount that you owe.
Your trustee will carry out managing the trust until you get your bankruptcy discharged. Once you do, you will get back your assets with some in exempt. This is done to at least compensate your creditor, considering your filing for bankruptcy.
Furthermore, the filing of bankruptcy is not rampant in Alberta. Currently, the rate of filing for bankruptcy is lesser as compared to the average filing per month. This shows that Albertans are making progress under the other debt solutions such as debt settlement, debt consolidation, or consumer proposal, which are more sustainable.
Pros and Cons of Bankruptcy in Alberta
Before you file for bankruptcy, you must first weight the pros and cons; it might wipe out your debts instantaneously, yet it also comes with major cons that you must understand prior to filing. Understanding bankruptcy and both the advantages and disadvantages might trigger you to seek the other debt solutions such as consumer proposal. How a consumer proposal affect your rating as compared to that of bankruptcy might change your mind.
Pros
The most evident benefit that you can get in Bankruptcy is eliminating your unsecured debt. This includes credit card debt, payday loans, lines of credit, and all other unsecured debt. Alberta residents also find relish after bankruptcy discharge as it prevents creditors and lenders from hunting them or harassing them. This is because bankruptcy writes off your obligation.
Cons
On the contrary, you might feel bankruptcy is your perfect getaway from indebtedness; however, this is not true at all times. Bankruptcy can greatly impact your credit repute. It will remain on your credit record for about 7 years or more. Moreover, it will give you a hard time getting a loan or even applying for credit extension. Apart from that, you can potentially lose valuable assets, and you’ll be left with just a few to sustain yourself.
Furthermore, bankruptcy does not only consume financial cost but also personal. The filling alone can take much of your effort as you have to comply with some paperwork and obligation. Besides, it does not totally erase all your debt. You will still be held liable for obligations such as child support, legal fines, and penalties; plus, your student loans that haven’t been more than a year since you ceased as a student and other debt in exempt.
Is There a Better Solution?
Filling for bankruptcy without exploring the other debt relief options is not the best solution to your indebtedness. There are far more options that can help you get back on track and rebuild your finances. Should you want to lessen your load and free yourself from debt, consider this debt relief option as your starting point.
