How to Avoid Personal Bankruptcy

You can’t go bankrupt if you have no debt! Bankruptcy is a relief valve for people and companies who find themselves unable to cope with overwhelming debts. Bankruptcy is not necessarily the only option for resolving debts, but the availability of other options depends on individual circumstances. The sooner you identify and get assistance with your debts, the more options you have.

The key to avoiding bankruptcy is avoiding being in the position of having overwhelming debts. Being debt-free might be easier said than done; it is not always within your control.  

Many people manage their debts by staying current with their minimum payments until they hit a speed bump. A speed bump could be many things; a reduction of your income from sickness or health issues, marital separation or divorce, significant medical expenses, business failure, or helping your family.  

Debt equals risk; the more debt you have, the higher your chance that a small speed bump will throw you off track. If you are spending all your income on living expenses and servicing debt, you have no flexibility if you hit a speed bump. Unless, of course, you borrow more. But, that continues to increase your risk profile.

No one can predict the future, so you can’t anticipate the unknown. 

By managing your debt level, you can keep your risk profile low. Your finances can handle a speed bump and recover without resorting to bankruptcy or other debt settlement options with low debt. Managing your debt and saving will also help prepare you for retirement. 

The bankruptcy process is available to help you with an overwhelming amount of debt so that you can reset their financial world and start again.

There is no magic to managing debt and reducing the risk of resorting to bankruptcy. It takes discipline to manage your debt. By managing wants and needs, being realistic about what is affordable. While also making an effort to pay down debts in a reasonable timeframe and not just making minimum payments. 

Make good financial decisions, including the consequences of taking on new debts (including guaranteeing or co-signing for someone else). You can’t rely on third-parties to manage your finances; you have to do it.

Powell Associates Ltd. is a Licensed Insolvency Trustee. We are experienced, hands-on insolvency practitioners who understand the personal impacts of major financial stress; 

• You won’t be stuck in an assembly line process. 

• You will expect and receive prompt responses and resolution of issues from our supportive and experienced team.  

• We will review your debt solution options, including filing a consumer proposal or personal bankruptcy. 

• We help Canadians with overwhelming debt get fresh financial starts.  

Once you file a consumer proposal or personal bankruptcy, we deal directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you. Contact us for a free consultation.  

We offer free consultations to review your financial situation and practical debt resolution options. Contact us to discuss your situation over the phone, a video chat, or in-person in Saint John, Moncton, Fredericton, Charlottetown, Dartmouth, or Miramichi.