Will Bankruptcy Affect My Income?
Posted on: June 14, 2014Posted in Bankruptcy, Finances | Comments Off on Will Bankruptcy Affect My Income?
Some people assume that if they file for bankruptcy they will have to turn over all their income to the trustee. Not true.
But there are other concerns people have over their income. A question we are often asked is: Will bankruptcy affect my income? Will I lose any of it to the trustee or creditors? The answer is: maybe, but probably not.
The fact is after going bankrupt people often find they now have “free income” for the first time in years. This is because they no longer have a long list of debts to pay every month.
When a person goes bankrupt, they are basically saying they can’t pay all their debts. They may be able to pay their rent and utilities and put food on the table, but they can’t do that and pay their credit cards and other loans. However, the moment they go bankrupt and get under the legal umbrella, those same creditors can no longer demand money from them, so they may actually have money to spare.
Now it is possible that person’s income maight be affected, but only if they are making such a substantial amount every month that, in fairness to the creditors, a portion of their surplus should be set aside for the creditors’ benefit. But this only applies after all the necessities are taken care of, so it is not such an onerous thing and most people have no problem with it. In fact it helps people feel better about having to go through the whole process in the first place.
There is actually a formula for working this out and the trustee will explain it all before you make the decision to file the bankruptcy. It’s just one of the many questions that a visit to the trustee clears up.
Most people don’t necessarily think of it this way, but the process goes directly to restore your control and give you an empowerment over your own affairs. This is one of the main goals and purposes of the bankruptcy laws.
Contact Richard Killen
FREE No Commitment Consultation
Contact us now for a fresh start!
“Serving Toronto & the GTA for over 25 years.”
Recent Blog Posts
- Why More Canadians Are Choosing Consumer Proposals for Debt Relief and Financial Recovery
- Consumer Proposal vs. Bankruptcy in Ontario: How Income and Assets Decide Your Best Route
- Are You Managing Debt or Just Surviving It? 10 Warning Signs It’s Time to Seek Debt Relief Solutions in the GTA
- Borrowing for Home Renovations in the GTA: Questions to Ask Before Taking on More Debt and How an LIT Can Help
- Back-to-School Expenses Are Adding Up: How to Prepare Without Going Into Debt Help Ontario