How Does Deep Debt Affect Your Assets

As they say, life is full of surprises. And while there are plenty of amazing surprises out there, there are also some unpleasant ones that we try to avoid. Financially, surprises can be a difficult thing to handle, especially when juggling multiple financial responsibilities like debt repayment, car loans, student loans, you name it.

Do you know what you would do if an unexpected cost were to come along? Maybe an unplanned hospital bill or a car battery replacement? If you’re already struggling with the pressure that comes with collection calls, wage garnishment, and the many other effects of personal insolvency, a setback can have serious consequences on our finances.

Finding Debt Relief

You might think that bankruptcy is the only way that you can get a fresh start, but even so, you don’t know how to set the wheels in motion. There are many myths that surround the idea of bankruptcy, which can get in the way of coming up with the best solution for your debt. If you don’t know how you are going to pay your creditors, then you can make sure that you don’t lose your house to creditors or any other assets like RRSPs with the help from a qualified credit professional.

Paying Your Debts

A meeting with a Licensed Insolvency Trustee (formerly known as bankruptcy trustees) can give you the information that you need to understand what it could be like to pursue a method of debt relief like filing for bankruptcy or a consumer proposal.

That might sound intimidating at first, but don’t be afraid. Bankruptcy trustees will assess your personal situation and present you with your options. They don’t make financial decisions on your behalf, rather they focus on educating you to the fullest extent so that you can make a decision that takes into account all of the important factors in your life.

These Assets Are Typically Kept in a Bankruptcy

The exact specifics of what you can keep and what you relinquish in the case of bankruptcy varies according to the differences in legislation in different provinces. In a bankruptcy, you assign responsibility over your assets to the bankruptcy trustee who then distributes it among your creditors. In order to ensure the bankrupt person can continue to maintain a standard of living, there are bankruptcy exemptions that allow a person to keep certain assets.

For instance, RRSPs and RESPs are exempt from bankruptcy so long as the contributions were made over 12 months before the date of declaring bankruptcy. Newer contributions, however, must be surrendered. Typically, people keep personal items, clothing, automobiles below a certain dollar value, and certain property.

It can certainly be scary to be worried about losing the things that make up your life in the case of a bankruptcy. While the procedure can be right for some people, in other cases a consumer proposal might be the best form of debt relief. If you’re ready to find out what it’ll take to finally crawl out from under the pressure of difficult debt, then get in touch with a Licensed Insolvency Trustee as soon as you can.

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