Filing for bankruptcy does not have to be a scary process. In fact, the act of declaring bankruptcy is a positive step towards eliminating overwhelming debts. To help you get a clear picture of how this debt relief option will affect you, we have explained the benefits of filing bankruptcy below:
1. Harassment from creditors will stop
When you file for bankruptcy, you receive an automatic stay of proceedings
, which is a legal order your creditors must obey. This order gives you immediate creditor protection. Creditors will no longer be able to contact you for collection of debt or take any legal action against you either.
2. Bankruptcy stops most wage garnishments
When you claim bankruptcy, your Trustee will notify your employer, the court, and the creditor to stop the wage garnishment. An exception is that bankruptcy cannot stop the garnishment of your wages by the Family Responsibility Office.
3. Eliminates your debt
Once you are discharged from bankruptcy, with certain exceptions, you are debt free. For example, student loans that are less than 7 years old, court fines, penalties, and child support are all debts that survive bankruptcy.
4. Filing for bankruptcy will give you a target date for a clean credit report
Another benefit is knowing when you will be discharged from bankruptcy. This way, you can plan more easily how to start rebuilding your credit.
For many Canadians, the pros of bankruptcy far outweigh the cons. After all, once their bankruptcy is complete, they are debt free and have the fresh start they need to move forward. If you’re looking for a credit counsellor in Toronto, get a quick assessment with us today or call us at 416.900.2324. We will help you develop a plan, reduce your interest costs and get out of debt over time.