Bankruptcy Alternatives Blog

How will new bankruptcy rules in Canada affect me?

Much has been written about the new bankruptcy rules in the United States that came into force in 2005. Less well known is the fact that new bankruptcy rules in Canada came into force in September, 2009. One of the impacts of the new rules in both Canada and the United States is that personal bankruptcy will cost more for many individuals.

In Canada, the new surplus income rules mean that if you earn over a set amount, you will be paying more while bankrupt, and your bankruptcy will last longer.

If you have good income, but also have high debts, it is important that you explore all bankruptcy alternatives to avoid paying a huge amount while bankrupt.

The two obvious alternatives to bankruptcy are a Chapter 13 Wage Earner Plan (if you live in the United States), or a consumer proposal (if you live in Canada).

There are pros and cons to both options, but in general it’s a good idea to avoid bankruptcy if possible. Consult an expert in the United States or Canada for more information.

To avoid bankruptcy, talk to a bankruptcy trustee or bankruptcy attorney

Remember that TV commercial where four out of five dentists recommended a certain toothpaste? It may seem strange that a dentist would advise you on how NOT to get cavities, but it makes sense: a dentist is the best source of information on how to avoid cavities, since they see cavities every day.

The same is true when it comes to bankruptcy alternatives. It may seem strange, but often the best source for information about how to avoid bankruptcy are the people who do bankruptcies: bankruptcy trustees in Canada, and bankruptcy attorneys in the United States.

To help you research your options we have assembled a list of the following bankruptcy resources to help you evaluate your bankruptcy alternatives:

If you live in the United States, a great resource is Bankruptcy America; they even provide a free personal bankruptcy evaluation form to help you decide if personal bankruptcy is right for you.

Residents of Canada can get similar help at Bankruptcy Canada; be sure to check out the largest bankruptcy blog in Canada.

If you live in Ontario, Canada, you can find information on the Bankruptcy Ontario web site. Information is also available for individual cities in Ontario, including bankruptcy Kitchener, bankruptcy Cambridge, bankruptcy Guelph, bankruptcy Toronto, bankruptcy Windsor, bankruptcy London, and bankruptcy Hamilton.

You have options, so contact an expert and decide if bankruptcy, or a bankruptcy alternative, is right for you.