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Everything You Need to Learn About Claiming Bankruptcy

by jadenallred

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According to the 2012 Annual Report of the Office of the Superintendent of Bankruptcy Canada, a total of 77,993 consumer bankruptcy cases were filed in 2011. While it is roughly 16 percent lower compared to the previous year, the number of Canadians in deep financial chaos is still troubling. With the proliferation of credit cards and other loans, being economically responsible is becoming much tougher to accomplish.

Across the country, declaring bankruptcy holds a powerful preconception. It calls to mind images of deadbeats attempting to evade duty over their piling financial obligations. Most individuals, because the sense of chagrin and failure, keep their bankruptcy worries to themselves triggering misinterpretations and misunderstandings. That said, right here are some myths about claiming bankruptcy along with realities that might offer you a more clear image of its real nature.

Myth # 1: You will lose everything you have

By law, a licensed trustee in bankruptcy will legitimately assume ownership of a portion of your possessions in exchange for the liquidation of your financial obligations, but you will not lose everything. There are particular assets, such as locked-in pensions and individual possessions that are secured from liquidation. The list of assets bankruptcy filers are enabled to keep will differ based upon your province or region.

Myth # 2: It's impossible to get new credit after a bankruptcy

While acquiring a house or an auto loan will be harder with a bankruptcy note in your credit records, it is most certainly not impossible. Bear in mind that loan providers think about various factors when giving a loan, such as income and length of time in current work, and these can affect how they see your bankruptcy. In addition, a bankruptcy notation is not long-term. It will just stay in your record for 6 years after you're discharged.

Myth # 3: Filling for bankruptcy will not protect you from stressing lenders

When you file for bankruptcy, you'll be protected from any form of harassment coming from your creditors. Once you've efficiently filed, the court will release a "stay of proceedings" on your financial institutions. They will be legitimately forbidden from making any additional contact with you and from submitting any legal action against you.

Myth # 4: Declaring bankruptcy will erase all your financial obligations

Filing for bankruptcy will not erase all your financial obligations. Secured debts like car loans, home loans, alimony and court fines, cannot be liquidated via bankruptcy. To find out more, check out /story/2011/11/17/f-bankruptcy-myths.html.

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