Please, please always make sure that the decision to file bankruptcy is your decision and that it make sense to you. It’s very important and required that you work closely with a Trustee in Bankruptcy or a certified Credit Counselor, however it’s just as important that you understand the process and how it will affect you.
If a trustee in bankruptcy is suggesting you file bankruptcy, don’t just nod your head. Ask questions and make sure you understand what they are telling you, and then apply it to your situation. It is the trustee’s job to make sure you do what’s best for you but at the end of the day, you’re the one responsible for you! Since you know yourself and your situation better than anyone, it’s up to you and you alone to make the right decision. Here is an example of making a decision that could have an impact on getting a car loan in bankruptcy or even after bankruptcy.
If you file a Consumer Proposal or Bankruptcy for $20,000 or less, then some banks will consider it too much of a risk to finance you a car loan. Why? Because you’re probably looking to finance a car loan between $10,000 to $25,000. If you made the decision to file bankruptcy for a small amount, then the bank or auto finance company could consider that you might do it again, only this time with their car loan at the center of it.
If you can’t afford $15,000 or $2o, 000 in total depth, then you may not be able to manage a car loan either. At least that is how the banks or auto finance companies will look at it. So if you’re about to file bankruptcy, considered how other institutes like the bank will look at it.
For some people $20,000 is a lot of money, however, for others it might be considered a manageable amount of money. Filing bankruptcy is about your situation, so make sure the amount you file bankruptcy for is suitable to your situation. If you think you can handle $20,000 in debt outside of a bankruptcy or Consumer Proposal, then you’re probably better off not filing bankruptcy.
However, if you are certain you will not be able to pay it off and you see yourself struggling, missing payments and possibly having assets repossessed, then for your situation file bankruptcy might be the right decision.
There is no easy answer to: Should I file Bankruptcy? So always make use of the resources available to you. Try using the internet, company’s advice from people you trust or if possible borrowing money from family & friends. If you did your homework and you apply everything to your unique situation, then the decision you make is more likely to be the right one!
Bankruptcy payments must be made on time, every time
Yes its common sense but it still has to be said. So here it is: If you’re in a bankruptcy or consumer proposal, it is very important you make your bankruptcy payments to the trustee, always! If you miss your trustee payments in Bankruptcy you’re at risk of delaying your discharge, defaulting on your bankruptcy and possibly hurting your chances of getting a bankrupt car loan. When you file bankruptcy, you’re agreeing to make a regular payment to your trustee. Please make sure you can manage that payment. A well paid bankruptcy is just as important as a well paid car loan.
Only file Bankruptcy if you understand bankruptcy If you think you’re ready to file bankruptcy then your first obligation is to understand it. Many people in different areas needless file bankruptcy each year. If you are not educated about personal bankruptcy or aware of its ramifications, then you’re probably not ready to make the choice. The decision to file bankruptcy is important and it can either help you or hurt you. If you dont understand bankruptcy and how it works then it’s possible youll make the wrong decision.
A very common mistake made by people filing is to remain ignorant about bankruptcy and what bankruptcy means. Please, if you`re considering bankruptcy make sure you educate yourself or seek counsel from a qualified bankruptcy professional. Don’t inflate your debt before bankruptcy Believe it or not people go out of their way to make bankruptcy worse for themselves.
Occasionally individuals that are preparing to file bankruptcy or know filing is inevitable actually choose to rack up more debt and exhaust their credit supply by excessively spending. This rare but occasionally practiced exercise is both dangerous and stupid.
Filing bankruptcy does offer protection from credits and a chance to rebuild your bad credit but it is not a free pass. The more debt, especially unsecured debt, you bring into bankruptcy the greater your responsibility. If you know you’re going to file bankruptcy, and then choose to be responsible and limit your use of credit.
Short and sweet: Do your best to avoid filing bankruptcy. While bankruptcy for many people is often unavoidable, there are still many steps you can take to avoid it. Speak with a trusted friend or bankruptcy professional and ask for help or advice. Reaching out is always the first (and sometimes the hardest) step!
Choose Bankruptcy or Consumer Proposal – Not both
The new bankruptcy laws make filing bankruptcy more difficult and filing a consumer proposal easier. There are still however many consumers that file both a consumer proposal AND a bankruptcy. How do you file bankruptcy and consumer proposal?
It’s never intentional but a typical scenario involves an individual working with a trustee in bankruptcy and filing a consumer proposal that they were not committed to or unable to complete. Once the person decides that the consumer proposal they signed off on is either too much work (consumer proposals often last 5 years and have larger monthly payments) or they cannot continue to maintain their payments they decide to turn their consumer proposal into a bankruptcy. While a proposal to bankruptcy scenario is common, it is not ideal. Bankruptcies and consumer proposals in both reports to the credit bureau and so will a proposal to bankruptcy. While it might be obvious that the bankruptcy on your credit bureau is also the consumer proposal on your credit file, it is still an example of either a careless decision or the inability to complete your obligations.
If you think a consumer proposal is too long or too much and you have the option to file bankruptcy, consider it seriously – it’s much better than filing both!
File bankruptcy once
Learn lessons from your bankruptcy and remember to avoid the bad credit mistakes you made the first time around. Do you best to rehabilitate your credit and use bankruptcy as a teachable moment! If you file bankruptcy more than once, please make sure multiple bankruptcies are necessary in your financial situation and not the result of repeating your previous mistakes!