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4 Things You Didn't Know About Bankruptcy
Debt problems aren’t something we like to talk about, and because of that there are a lot of misconceptions about the bankruptcy process. This post aims to shed a little light on insolvency and share some facts that you probably didn’t know.
You don’t need a huge amount of debt to file for bankruptcy. While it is uncommon for someone with only $1000 of debt to require a bankruptcy filing, everyone’s situation is different. Don’t put off seeking advice because you think your debt load is too small to qualify.
No income cap:
You can’t be earning too much to declare bankruptcy. How much you earn will determine the length of your bankruptcy and the amount you have to pay towards your outstanding debts, but it won’t affect whether you are eligible to file. However, those who earn enough to comfortably put money towards their debts might want to consider a consumer proposal instead of a bankruptcy. You can talk to your trustee about the benefits of each option.
You can own assets:
A lot of people assume that if they file for bankruptcy they will lose everything. The Bankruptcy and Insolvency Act actually outlines certain assets that are exempt from seizure, and many people get to keep everything. You may even be able to keep non-exempt assets by arranging to pay their value back to your trustee on a payment plan basis.
Bankruptcy covers most debts
There is a lot of misinformation circulating about what debts can be written off in a bankruptcy, but the truth is almost everything is covered. Tax debt, outstanding MSP, and gambling debts can all be discharged through bankruptcy. Even some student loans are eligible, as long as you have been out of school for 7 years. There are some exceptions including support payments and court imposed fines.