4 Reasons to Avoid Bankruptcy
I am sure you have heard before that bankruptcy is a bad thing. But do you know why it should be avoided at all costs? Today we are going to take a look at 4 reasons why you should avoid bankruptcy if at all possible.
1. The emotional baggage and stress can be immense and overwhelming. Knowing that you are in financial ruin is not a fun place to be. People who claim bankruptcy often feel like failures and feel a strong sense of guilt because they didn’t pay back the money that they had agreed to pay. The embarrassment of admitting your failure to family and friends can be difficult to overcome.
2. Filing for bankruptcy affects your credit in a big way. Canada’s largest credit bureau, Equifax, keeps the record of your bankruptcy on your file for 6 years after the date of discharge or your last payment. That is a long time to not have access to any credit. With a bankruptcy on your credit bureau report, most lenders will not even consider lending money to you. That plainly means you won’t be able to have any form of credit for a long time and it will be difficult to re-establish your credit after the bankruptcy.
3. With the internet being easily accessible, more employers are checking credit reports before making their hiring decisions. Employers want to know that you can handle your own finances before giving you responsibility to handle their business. Filing bankruptcy may seem like the right thing to do now, but consider your future. If you lost your job and needed to find a new one, would you need to have a clear record and a good credit score? It is important to think of all of these scenarios before making such an enormous decision.
4. Some of your assets may be protected, but not all of them are exempt in a bankruptcy. If you have assets that are not protected, you will have to surrender them to be sold and the funds from the sale will be distributed among your creditors. Depending on your situation you may have to give up certain assets that you may have been able to keep had you used another form of debt help.
Sometimes it seems as though bankruptcy is the only option. If you feel that way, know that there may be other options available to you such as filing a consumer proposal. If you would like to learn more about bankruptcy or restructuring your debt through a consumer proposal, give 4 Pillars Red Deer a call at 403-755-1757.