By Linda Paul, Licensed Insolvency Trustee
There are several common scenarios which may cause you to wonder whether personal bankruptcy is an appropriate option to get out of debt. These include:
Types of Bankruptcy
Before we continue, it is important to note there are two types of bankruptcy – voluntary and involuntary.
As it sounds, you initiate a voluntary bankruptcy when you visit a Licensed Insolvency Trustee as a measure to eliminate unmanageable debt. Conversely, involuntary bankruptcy occurs when your creditors petition the courts to place you in bankruptcy as a means of recovering a portion of your outstanding debts.
To qualify for a voluntary assignment in bankruptcy in Canada, you must owe at least $1,000 to a single creditor or $1,000 between multiple creditors. Above that, you will either:
If one or more of your creditors determines they are unlikely to receive full or sufficient partial payment to satisfy your total outstanding debt(s), they may initiate court proceedings to have you forced into bankruptcy. This will guarantee them a portion of your liquidated assets and potential income contributions to your bankruptcy estate.
The courts review these matters on a case by case basis to determine whether involuntary bankruptcy is the correct course of action in your and your creditors' unique situation.
Bankruptcy Protections and Benefits
If you are heavily in debt, there are several benefits to filing an assignment in bankruptcy. These include:
You Have Options
During a free confidential consultation, a Licensed Insolvency Trustee will review your unique situation and explain all the available options to resolve your debt challenges. Whether you qualify for a Life-Changing Debt Solution such as personal bankruptcy or consumer proposal – or would achieve greater benefit from a different strategy, they will help you make the choice that's right for you. No matter the path you take toward a financial fresh start, an MNP Licensed Insolvency Trustee can get you on track and help you defeat debt for good.
Based out of Abbotsford, Linda Paul is a Licensed Insolvency Trustee and Senior Vice President at MNP Ltd. To learn more about how Linda can help, contact her directly at 604-870-7445 or firstname.lastname@example.org.
This article was originally posted on www.mnpdebt.ca. Click here to view the original article.