Personal bankruptcy


Eliminating or reducing debt


Are you struggling with debt problems?


For some, struggling with debt is a temporary situation caused by an unexpected cost or a major life event. But most people, find this situation difficult to get away from.

Getting into financial trouble can affect people’s welfare, attitudes and behaviour, and how they make decisions. High levels of debt causes financial strain where households end up paying back more than what was borrowed.


Financial counselling and advice services mitigate these effects by eliminating or reducing debt. Chapter 7 personal bankruptcy is the simplest and most common form of bankruptcy allowing debtors to get rid of most of their debts, provides relief and helps them start over with  a clean slate.


Chapter 7 is also being referred to as liquidation bankruptcy designed to wipe out unsecured debts such as credit cards and medical bills.  

If the debtor has assets not protected by an exemption, a trustee appointed by the court can sell all nonexempt property to pay creditors. The debtor now  is discharged of his personal liability for most debts.


Should you file for bankruptcy?


Filing for Chapter 7 bankruptcy puts into effect the so called “automatic stay”.  The automatic stay immediately stops most creditors from trying to collect what is owed them, at least temporarily.

Creditors cannot garnish debtor’s wages,bank accounts, car, house or other property or cut off utility services.

If the debtor has no nonexempt assets, the creditor receives nothing.

Chapter 7 bankruptcy is typically for low-income debtors with little or no assets who want to get rid of their unsecured debts.


Who can file?


Individuals and business entities can file for Chapter 7 bankruptcy.

To qualify, debtor must have little or no disposable income and pass the “means test”.

The case starts by filing an official petition, schedule and statement of financial affairs and list of all assets and debts.The whole process takes about four to six months.