Your Debt Solutions Experts
BDO Pembroke

545 Pembroke Street West
Pembroke, Ontario K8A 5P2
Phone: (613) 732-7900

When is Bankruptcy Assistance Right for You?

Before you make a decision about how to manage your debt, learn about your options. Bankruptcy is a well-known term, but the processes surrounding it are lesser known. There are also other debt solutions that may be open to you, which can provide assistance with eliminating your debt. If you’ve made it a goal to tackle your debt over the coming year, learn more about what bankruptcy assistance means, and whether it’s right for your situation.

Tackle your debt in 2017

A fresh year is almost upon us. Along with the new year comes the opportunity to set new financial goals and create an achievable plan to accomplish them. 2016 was financially challenging for many Canadians. In recent months, markets have experienced uncertainty, utility costs across Ontario have continued to put pressure on residents, and the job market in many parts of Canada remains competitive.

Debt can feel unmanageable for some people. Knowing how to get out of debt can be challenging. The Financial Consumer Agency of Canada (FCAC) offers strategies for debt repayment. Reviewing your budget to find additional money to put towards debt payments, avoiding taking on more debt, and making at least minimum payments each month is important. The FCAC also discusses how to manage debts that have gone to collections. Applying some of the strategies to your situation can help you pay down your debt sooner.

Know your formal debt options

There are times when your debt might be too high for you to manage on your own, even with valuable strategies in-play. If you’re struggling to make ends meet, there are options besides bankruptcy that might be suitable for you, so you should meet with a professional. A Licensed Insolvency Trustee (LIT) will review your finances with you and identify what options are available in your situation.

If a formal debt solution is suitable, a LIT will prepare the paperwork and present the proposal on your behalf. You will have their support throughout the entire process, and to help you rebuild your finances.

When is bankruptcy appropriate for you?

Meeting with a LIT is the first step to really understanding what options you personally have for your debt. But familiarizing yourself with information about bankruptcy can help to relieve some of your anxieties. It can also help you think of questions you might want to ask a professional when you meet. Here are the facts:

  • A LIT will prepare a proposal and submit it to the courts on your behalf. If accepted, bankruptcy helps with unsecured debt. Unsecured debt includes credit cards, taxes, lines of credit, loans (including payday-type loans) and sometimes student loan debt. It does not include mortgages, or vehicle payments.
  • The process takes approximately nine months, and you’ll receive an R9 rating on your credit for about seven years afterward.
  • Collection calls, and wage garnishments, will stop. Some of the items you have may be repossessed, but you won’t have to give everything up. Some assets are protected by federal law.
  • Before considering bankruptcy, it’s important to review other formal options, such as a consumer proposal. A consumer proposal can be useful for residents in Pembroke and elsewhere if your debt does not amount to more than $250,000. The credit rating is an R7, and will be reflected on your credit for less time than a bankruptcy rating.


If you’re interested in exploring your debt options, meet with a professional for assistance. In some cases, bankruptcy is the best option, but a LIT will be able to explain how any of the other solutions suit your situation. Over the next year, you may be able to drastically reduce or even eliminate some of your debt and keep your financial goals on-track.

Have you decided to tackle your debt in 2017? #BDOdebtrelief #LetsTalkDebt

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