If I’m meeting with you, it probably means that you are in some kind of financial difficulty. Laid off. Relationship breakdown. Unable to work due to injury. For any number of reasons, you are unable to make all of your payments when they come due.
My job is to provide people with information. We’ll talk about your situation and then review the options available to deal with your debts. One of those options is bankruptcy, but it is important to recognize that bankruptcy is not your only option. I will help you understand all of your choices and then you can make an informed decision of the solution that is best for you and your family. We don’t focus on the past – it is all about having a plan for your future.
In almost every consultation, the question comes up: HOW WILL BANKRUPTCTY AFFECT MY CREDIT RATING?
The reality is that anything short of paying back 100% of your debts, including all of the interest, is going to create a blemish on your credit report. A bankruptcy will show up on your credit report the same way that having a debt in collections is displayed. For that matter, it’s also the same way lawsuits appear.
Once the bankruptcy has been completed, the debts will be cleared. However, there will be a footnote for up to 6 years afterward showing that you had filed for bankruptcy.
Does this mean you can’t get any credit for at least 6 years? Not necessarily. A credit report is one of the tools that banks use to determine the risk of people not being able to repay their loans. Having a bankruptcy on your record is one of the factors that a bank will consider if you ask for a new loan, but it is not a clear cut black and white or yes/no decision.
For some people, bankruptcy is the only way to get out from underneath the burden of their debts. However, there are other choices. Consumer proposals are an increasingly popular alternative to bankruptcy. A consumer proposal is often a good choice for people who have the ability to repay a portion of their debts and want to protect assets that they would lose if they filed for bankruptcy.
To review your situation in detail, you can call us at 310-PLAN or send us your questions by e-mail. Hoyes, Michalos & Associates has offices throughout southern Ontario, including Kitchener, Cambridge and Guelph.
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