When it comes to debt solution, many people feel that bankruptcy will be a life long anchor to carry with them throughout their financial life. This common misconception couldn’t be further from the truth.
Individuals who are looking to address their debt at this level have generally been dealing with these issues for a considerable amount of time, and have accepted that they are unable to meet their obligations without help. To this end, filing for bankruptcy can be a fresh start and a new financial beginning.
Will my credit rating be permanently damaged?
Filing for bankruptcy will affect your credit score, but so will continually missing payments and falling behind on your existing debt. Bankruptcy is essentially a chance to “stop the clock” and begin the process of rebuilding your financial future. Yes, it will take a minimum of 9 months before your bankruptcy can be discharged, and you will not be able to borrow funds right away given the total debt load you carried prior to bankruptcy, but with good consumer advice from your Licensed Insolvency Trustee, along with some disciplined budgeting practices, you can begin to build good credit again – and keep it that way.
Do I have to notify my employer about my bankruptcy?
In most cases, employers are not notified about a bankruptcy registered against their employee. For most Canadians, this means that they can continue to live and work without any impact on their career. For some, however, there will be a requirement to be bondable and insurable which could preclude them from holding a specific position until their bankruptcy is discharged. Some professional associations also require that they are notified of any bankruptcy filings, and they may have their own policies against maintaining membership until a discharge has been obtained. If you have questions as to whether or not your employment will be affected, speak to one of our Licensed Insolvency Trustees for sound advice and potential alternatives if necessary.
Will my spouse have to file for bankruptcy as well?
Generally speaking, you can only be asked to repay debts that are registered in your name, regardless of living arrangements or marital status. This means that as long as your debts are listed in your name alone, there will be no negative financial impact to your partner and their credit rating. That said, if you have joint debts or your partner has guaranteed any of your debts, they will be on the hook to pay them off entirely. Your Licensed Insolvency Trustee will be sure to walk you through any potential complications, and will help to determine if filing for bankruptcy is the right choice for you and your family.