Scared to declare personal bankruptcy? Don’t be. Bankruptcy is a legal process that can provide relief to honest but unfortunate individuals who are unable to pay their debts.
According to the Office of the Superintendent of Bankruptcy Canada:
- A total of 118,678 Canadians either filed for personal bankruptcy or filed a consumer proposal in 2013, an increase of +0.2% over 2012.
- The long-term trend in Canadian personal bankruptcy statistics is upward.
- Bankruptcies are gradually increasing, mainly because of the high levels of debt many Canadians now carry.
- Consumer debt reached over 163% of annual income in 2013, meaning that for every $3 the average Canadian earns in a year, they now have almost $5 in debt.
Employment and Social Development Canada reports:
- In 2011, 122,999 Canadians were unable to repay their debts.
- Serious financial difficulties brought them to file either a payment proposal or a bankruptcy. The average amount owed was $119,021.
- About 53% of Canadians filing a proposal or bankruptcy in 2011 were aged 30 to 49 years.
- In 2007 individuals who were divorced or separated were more likely to file a proposal or bankruptcy than Canadian adults on average.
- In 2008 the most frequent type of debt reported by individuals filing a proposal or bankruptcy was credit card debt (91%).
Still scared to declare personal bankruptcy? Huffington Post reports that one in six Canadians will eventually go bankrupt. Don’t be scared to declare personal bankruptcy; there are advantages:
- It is relatively quick
- It can be less expensive than other options
- It eliminates your unsecured debts
- You will have some protection from creditors, legal action and wage garnisheeing
- After your discharge your credit risk can start to improve
If you are considering bankruptcy, your first step should be to meet with a trustee. Trustees are individuals licensed by the Office of the Superintendent of Bankruptcy (OSB) to administer the bankruptcy process. Contact Ira Smith Trustee & Receiver Inc. We will evaluate your financial situation and discuss various bankruptcy alternatives which include credit counselling, debt consolidation and consumer proposals that could help you to solve your financial problems. Don’t be scared to declare personal bankruptcy. It’s just an option to consider so that Starting Over, Starting Now you can be well on your way to financial health.