Those who over the previous few years have been paying attention to the world economy are unlikely to be surprised by the reality that consumer debt in Canada is increasing again. Residents across the nation have shown a growing desire to purchase fresh car loans and installment loans for big purchases such as furniture and equipment.
Although the average rise in these loans did not achieve record rates in 2012, it is still a cause for worry that the average debt represented by these loans increased by approximately 9%.
There are more reasons to worry about certain provinces and territories than others. After all, a rise in the level of customer debt makes it more likely that individuals will not stay up-to-date to pay their bills and fall back on their minimum payments. This, in turn, can lead to a greater amount of bankruptcies and consumer suggestions.
Average Nova Scotia debt rates
Average debt rates in Nova Scotia have become a major cause of concern in latest years. For instance, Nova Scotia had the largest amount of consumer and bankruptcy suggestions per 10,000 individuals in Canada during 2011. Apparently, many provincial citizens thought that file bankruptcy was their only choice to get out of economic difficulty.
However, citizens of Nova Scotia who are in debt over their heads should always wonder if bankruptcy is really their best choice. Comprising the province’s bankruptcy can assist you make an informed decision.
Nova Scotia bankruptcy exemptions
While Nova Scotia may set its own bankruptcy exemption boundaries, most bankruptcy laws in the province are established by the federal government. In other words, bankruptcy is the last resort option to regain control of your finances after you get over your debt head. It enables you to begin your finances cleanly and eliminates the majority of debts not secured by an asset like a house.
How to qualify for bankruptcy
You are qualified to file for bankruptcy if you owe at least $1,000 in unsecured debt.
The Bankruptcy Trustee
Residents use a certified bankruptcy trustee to file for bankruptcy. This trustee creates a confidence consisting of the property of a debtor from which the different creditors of a debtor are paid. As a consequence, creditors are recovering some of their loans to an individual who files for bankruptcy as long as the debtor still possesses some tangible property.
What happens to assets?
When it comes to what debtors have to hand over to their trustee, there are exemptions, which implies that all individuals who file for bankruptcy have something to maintain. The trustee proposes discharge after a typically nine-month period and, if authorized, the bankruptcy becomes official. All debts covered by the insolvency proceedings are deleted at that stage.
Pros and Cons of A Bankruptcy in Nova Scotia
Residents of Nova Scotia should not choose this debt solution when it comes to bankruptcy until they know its pros and cons. The advantages of filing in Nova Scotia for bankruptcy include:
- Legally preventing debt collectors from harassing you
- forgiving student loans if you submit at least seven years after the end of your student status
- economic advice to assist you prevent future bankruptcy.
On the other side, bankruptcy has many negative effects such as:
- being legally unable to hold certain corporate board positions during the bankruptcy phase
- having your loan ruined for seven years, making it difficult to obtain fresh loans
- exemption amounts that force you to give up much of what you own ; significant exemptions in Nova Scotia include $6,500 for a business-related motor car ($3,000 if only for private use), $1,000 for professional use;
Bankruptcy or Debt Settlement
Since bankruptcy is the ultimate resort option, other debt solutions should be considered first. For more information on debt settlement and other programs such as the consumer proposal, complete the debt relief form and find out how they might be a better option for you than bankruptcy.
CONSUMER PROPOSAL EXAMPLE
Example Unsecured Debts
|2||Credit card 1||$6,812|
Your Monthly Repayments Would Be
a Consumer proposal $748
(total contractual repayments)
a Consumer proposal $295
(total contractual repayments)
* Subject to creditor acceptance
* Payment subject to individual circumstances
* Credit rating may be affected
* Fees apply, subject to individual's circumstances.