Bankruptcy Guidelines - By: Molly Wider

Who wants to be bankrupt? No one, likely. Sometimes, though, the stress and anxiety of being in debt and unable to meet your financial obligations can overwhelm you. Then, declaring bankruptcy may be the best option.

People go bankrupt for all kinds of reasons. You lose your job, get laid off, suffer a long illness, or get a divorce. Any of these things can happen to anyone-and it always happens when we're least prepared for it. In Canada, about 100,000 people declare bankruptcy every year. So, if bankruptcy is something you are considering, you can take some consolation in knowing you're not the only one.

There are a few signs that bankruptcy might be your best option. But first, be sure you have exhausted all other alternatives. Have you tried debt counseling? Have you contacted all your creditors and tried to re-organize your debt load to make it manageable for you? If you have tried these things, and you're still not able to pay your lines of credit, credit cards, and other debts, it may be time to consider bankruptcy.

Steps in bankruptcy You start the process by contacting a trustee in bankruptcy. You can find them in the phone book or online. You meet with the representative to talk about your situation, so be sure to bring all your financial records with you. In the first meeting, the trustee will review your situation, and see what assets and debts you have. There will also be forms to fill out. After that, the trustee files your claim. Creditors are notified, and they should stop contacting you at this point. Legal actions are also halted once you file.

Sometimes, once you file for bankruptcy, financial counseling sessions are required. Take advantage of these-they can really help you to regain your footing after bankruptcy. In nine months, your debt will usually be discharged. You will not be able to get most kinds of credit again for several years, and your bankruptcy will be noted on your credit reports.

When you declare bankruptcy, only you are affected. Your spouse or partner is only affected if they have co-signed or acted as a guarantor on lines of credit or cards or purchases that creditors may be reclaiming.

The big thing to keep in mind if you decide that bankruptcy is the best option for you is that it "wipes the slate clean". Bankruptcy, as difficult as the experience might be, is your chance to start over and get it right the second time. And everybody deserves a second chance, right?

About the Author

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