What You Need to Know About Filing for a Second Bankruptcy in Canada
Most people know that bankruptcy should not be entered into lightly. But that notion is particularly true if you find yourself facing this fate for a potential second time.
To further deter people from revisiting bankruptcy, the Canadian government implemented stricter discharging durations for those who file more than once. Although not ideal, this option is available to individuals who continue to struggle with debt after their first bankruptcy in Brockville, Kingston, Ottawa or Pembroke.
Unfortunately, in doing so, you are at the mercy of your creditors, who can choose to deny your discharge for longer than the regulated minimum terms. The following tips can help you make the best decision for your unique circumstances.
- Understand your options
Second-time bankrupts cannot be discharged until a minimum of two years after filing, whereas the minimum for first-timers is only nine months or, at most, 21 months. For individuals who choose bankruptcy again, it can take as long as three years or even more, depending on the creditors involved and how much income you earn. You also must appear in court to request the discharge, rather than experience it automatically as first-time bankrupts do. Furthermore, as an additional method of discouragement, a second-time bankruptcy in Brockville, Kingston, Ottawa or Pembroke will remain on an individual’s record for as many as 14 years. This makes it more difficult to obtain loans or make large purchases due to poor credit scores.
- Consider other debt solutions
For these many reasons, it is important to seriously think about whether filing for a second bankruptcy―or choosing another debt solution, such as filing a consumer proposal―is the best decision when faced with significant debt. In the latter case, you would owe your creditors more than you would if filing for bankruptcy in Brockville, Kingston, Ottawa or Pembroke, but your credit would remain considerably less tarnished. Regardless, both options involve required counselling to discuss your credit, which is a recommended benefit to ensure you learn from your debt and move on from it successfully.
- Speak with a licensed insolvency trustee
Speaking with a licensed insolvency trustee early can help you make a thoughtful decision on the matter. Naturally, it is important to understand of all the necessary facts before making a decision that could ultimately affect your credit for years to come. Discussing your financial situation with a professional advisor is the best way to determine the most effective solution for you when struggling with debt. Your licensed insolvency trustee can review your circumstances with you and even offer alternative debt solutions, such as filing for a consumer proposal instead of a second bankruptcy. Consulting with a licensed insolvency trustee can help individuals who are uncertain of all their options and both the regulations and obligations involved with them. It may not be necessary to file for bankruptcy in Brockville, Kingston, Ottawa or Pembroke again and you can save yourself the extra trouble.
Filing for a second bankruptcy? We can help.
Perhaps one of the lesser discussed factors involved in debt is that it is unnecessary to feel embarrassed or ashamed after if you consult with your licensed insolvency trustee and decide that filing for bankruptcy in Brockville, Kingston, Ottawa or Pembroke for a second time is the best way to manage it. It is simply necessary to review your finances with a professional advisor and take advantage of the required counselling to learn how to overcome your debt. If filing for bankruptcy a second time was uncommon or unrealistic, the Canadian legislation would not exist to allow individuals to file more than once. The system is designed to discourage people from resorting to this option, and mandatory counselling should help debtors learn better money management, but there are specific regulations in place because it does happen.
With over 65 years of experience, we have solutions and results. At D. & A. MacLeod Company, we are here to help. Contact us today, and we can provide you with tailored advice to guide you through your options.