Will I lose my job if I declare bankruptcy?
It is illegal for an employer to terminate employment simply for filing a bankruptcy. In fact, unless there is a wage garnishing order in place, your employer will not be informed of your filing. Some professionals have rules in place precluding your filing a bankruptcy such as having a broker’s license in which trust accounts are managed.
In that case, a proposal could be filed instead as it does not include such restrictions.
Bankruptcy erases all your debts?
Definitely not true. Some debts cannot be discharged in a bankruptcy filing.
They include secured debts like mortgages or car loans, alimony, spousal and child support obligations, court fines, claims arising from an assault, or student debts unless you have been out of school for at least 7 years. (this can be reduced to five years in case of hardship).
In Bankruptcy can I keep my house?
Very few people who file for bankruptcy in Canada lose their homes these days.
The net equity in your home is what is of interest to the creditors.
If there is equity in your home when you file for bankruptcy you could make a settlement payable to the estate (via the Trustee).
Upon discharge, the trustee would release its interest in the property. Or, you could file a consumer proposal as an alternative to bankruptcy (in which case your assets are yours to keep anyways)
Either way, you could keep your home.
Will my friends know I declared bankruptcy?
We have all seen those ads in the “legal notices” section of the paper that alert potential creditors to someone’s bankruptcy.
But that is for larger bankruptcies. If the assets are minimal, the creditors are notified by mail and there is generally no notice in the paper.
While bankruptcy filings are a matter of public record, who actually goes to the bother (registration required) and expense ($8.00) of searching.
So unless you tell them, there is a good chance that friends, neighbours and work colleagues won’t find out.
Filing for bankruptcy will destroy my spouse’s credit rating?
A consumer bankruptcy filing is personal to the individual filing it. As long as your spouse didn’t guarantee or co-sign for your credit cards or loans his/her credit rating will not be affected by your filing. Creditors cannot go after your spouse for debts that are in your name. The flip side of this is that a bankruptcy filing only results in the filer having their debts discharged. The spouse’s debts must still be paid.
If you would like more personalized answers to your specific situation, please contact us and we will gladly go over all of your options.