Do I Qualify For Bankruptcy?
When it comes down to it, deciding on which of the debt relief options in Canada would be the best for you will depend mostly on which of the options you would be qualified for. For example, if you owe your creditors under $1,000, you can eliminate bankruptcy and consumer proposal from your list. The consumer proposal has a minimum of $1,000 for the debt requirement. Bankruptcy would not be beneficial to you at all for such a small amount. In fact, you would be required to sell as many of your assets as it takes in order to pay off such a small amount.
Regardless of how you got in the financial situation you’re in, if you are interested in filing bankruptcy, be prepared to meet with all the following requirements:
The Minimum Amount of Indebtedness
Some of the debt relief options like the consumer credit counseling do not have a requirement on a minimum level of debt needed in order to apply for financial assistance. However, with bankruptcy there is a required minimum level of indebtedness an individual must meet prior to qualifying. The minimum level of debts owed to qualify for bankruptcy starts at $1,000. Actually, filing with such a small amount of debt is another story altogether! The Value of Your Assets
Consumer proposal does not need to take into account the value of your assets, as bankruptcy does in order to determine your properties worth and they have a special consideration that is used when determining whether or not you qualify to file for a bankruptcy. Furthermore, should your tangible assets accumulate a higher value than what the debt amount is on what you owe the creditors, you will be disqualified from bankruptcy and the trustee of the bankruptcy will then require that you sell enough of your assets to get the funds needed to pay your debt off.
This does not mean you will be able to file bankruptcy free of any cost. You will have to give your trusty some of the assets you do have to pay the creditors a little on the amount you originally borrowed. However, there are some exemptions which lets you keep some of your things. Which is the big difference between a consumer proposal and filing bankruptcy, as a consumer proposal will never ask for any of your assets, whether or not the creditor accept the consumer proposal.
Income Considered Insufficient
Your income must be insufficient to the point that it is not enough to cover the amount of your payments each month on all of your debts. What’s more, not having enough income to make your monthly debt payments may not be enough to choose bankruptcy for eliminating debts. It would be wise to check-out other debt relief options available, like debt consolidation, which will not cause as much harm to your credit as bankruptcy would.
Take Into Consideration Debt Settlement
While bringing up debt relief options that is not going to be harmful to your credit the way that bankruptcy is going to be, it is also a good idea to check-out debt settlement and credit counseling.
If you’re interested in more information regarding your different options for relieving debt, just fill out our Canadian Debt Relief form.
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