Myths versus Truths about the insolvency process

Bankruptcy & Insolvency: Myth versus Reality

Whenever we sit down with clients to discuss their financial pressures, and determine which path they should take to solve them, I’m amazed at how much misinformation and mythology they believe surrounds the process. You may very likely have some misconceptions about bankruptcy, consumer proposals and the insolvency process yourself. With the goal of cleaning up all of these misconceptions, let’s take a look at some of these myths:

Myth #1: “My neighbours & my boss will find out about my filing”
In reality, only the Federal Government & your creditors (as well as the Trustee preparing the paperwork) will know about your filing.

Myth #2: “I will lose everything I own”
Many assets are exempt from seizure (e.g. Your vehicle (up to $5,650 of value), clothing, household goods, tools of your trade, RRSPs purchased more than 12 months prior to your filing, etc.). We can analyze your list of assets so you can be reassured that what you own will remain with you.

Myth #3: “By filing I am admitting that I am a total failure”
You are actually showing great courage by taking control of a bad financial situation and using the legal rights provided to “honest debtors” by the Bankruptcy Insolvency Act (and the Government of Canada) to protect yourself.

Myth #4: “Bankruptcy is my only option” Our Trustee will talk with you in depth about how you can reorganize, refinance, budget, make a settlement offer or consumer proposal, and other options.

Myth #5: “The newspaper notice of my insolvency will be seen by everyone I know”
Most forms of protection no longer require a public advertisement (this was something done routinely many years ago)

Myth #6: “I will never get credit again”
Once your debts are discharged at the end of the insolvency process you will be debt free. That means you could be more capable than ever of handling appropriate amounts of debt. Lenders know this.

Myth #7: “If I only have a tiny bit of money I cannot afford to get help”
We offer a free initial consultation. It’s confidential, one-on-one and there is no obligation to you. And one of our more than 31 Ontario offices is sure to be located close to where you live or work. Plus, in most cases our Trustee will allow you very affordable terms to pay the modest costs involved in filing and protecting yourself from your creditors.

What could happen if you fail to take prompt action? You could risk the following painful consequences:

• Garnishment of wages
• Court action
• Collection agency harassment
• Seizure of assets
• Ongoing family stress & possible health issues related to the stress

Get the facts from professionals who know. Please call one of our qualified staff right now by dialing 310-1100 from your local area code (or clicking here to request an appointment from our website). We guarantee we’ll take the time to discuss your situation with you on a confidential basis. If, after a discussion by telephone, it appears you could use our services then a face-to-face meeting will be arranged. This meeting can be held at any of our 30 offices across Ontario and there is no cost to you.

You can expect a private and confidential meeting. After a careful review of your individual financial situation we will discuss all of your options with you, explain how each option works and how a specific solution could impact your life.