What are the benefits of declaring bankruptcy?

Debt protection and a fresh start

8 benefits of filing for bankruptcy

Deciding to file for bankruptcy is not always an easy decision, and you might not think there are any ‘benefits’ to it. Our Licensed Insolvency Trustees (LIT) will always explore every debt relief option available to you, and they are often able to find an alternate solution to bankruptcy. However, there are some benefits associated with bankruptcy. It is important to be aware of these as you consider all of your options and discuss them with a licensed professional.

1. Bankruptcy stops harassing phone calls from creditors

Any aggressive debt collection will cease after you file for bankruptcy.

2. Bankruptcy freezes interest payments

By filing for bankruptcy, you will no longer have interest added to your debt or be responsible for paying this interest.

3. Bankruptcy stops legal action against you

Filing for bankruptcy puts a stop to any legal claims from creditors made against you, such as a wage garnishment.

4. Bankruptcy eliminates your debt

Once you’ve been discharged, you will no longer need to make payments toward your unsecured consumer debts.

5. Bankruptcy ends wage garnishments

Your employer will no longer take money off your paycheque to pay your creditors.

6. Bankruptcy protects some of your assets

You will not lose everything when you file for bankruptcy. Find what assets are protected in your province.

7. Bankruptcy costs less than other options

Other solutions, such as debt consolidation loans or a debt management plan, often cost more than bankruptcy as you will have to pay back the full amount owed, plus interest.

8. Bankruptcy can be a quicker debt solution

You will be able to resolve your debt obligations more quickly compared to other debt relief options, allowing you to start rebuilding your credit sooner.

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