As a Windsor bankruptcy Trustee, it meet with many people who have the same questions. I thought I would share the top 5 bankruptcy questions.
1. What does bankruptcy cost? This can be a complicated question because there are 4 components to what bankruptcy costs.
The first is the base fee. Everyone pays a minimum of $180 per month to file. It could be more if your file is complicated.
Next is what is known as surplus income. Essentially the more you earn as a family, the more you pay.
You may also have to make payments to keep assets such as any equity in a home.
And finally, although not a payment you make, you have to consider that you will lose at least 1 year of income tax refunds.
2. Will I lose my house? It depends on a number of factors. Is there equity in your house (is it worth more than you owe). If there is equity, then you don’t lose your house, but you will have to pay the equity to the trustee before you are discharged.
3. Will my bankruptcy affect my spouse? Surplus income payments (see above) are based on family income. If your spouse has a source of income, this could increase your payments. If you have any joint or cosigned debts, those debts will then become your spouse’s responsibility. Many people think that simply because you are married, any debts you have are automatically your spouse’s debt. That is just not the case.
4. Will I really lose everything? No, there are certain assets you are allowed to keep. Some of those are:
$5,650 in personal possessions
$5.650 for a motor vehicle
$11,300 for household furnishings
$11,300 for tools required to earn your living
Certain types of life insurance, investments, and RRSP’s.
5. Are there other options rather than Bankruptcy? Absolutely. In fact, more than half the people I meet with successfully file a consumer proposal. For most people, the monthly payment in a consumer proposal is lower than the monthly bankruptcy payment.
Now that you know the top 5 questions I am asked on a daily basis, call me at 310-PLAN or email me your question. We can book a free meeting to answer your questions, review your options and costs and formulate a plan that is right for you.
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