Myth: By filing personal bankruptcy I will lose everything.
Fact: The Office of the Superintendent of Bankruptcy Canada’s process is not designed to take away all your assets or make it impossible for you to live. Many assets are exempt from seizure by your creditors.
Myth: By filing personal bankruptcy I will lose my car.
Fact: When filing personal bankruptcy you are allowed to own a vehicle valued up to $5,650 that is exempt from seizure. Learn about other exempt assets.
Myth: I will lose my assets if I file a consumer proposal.
Fact: Filing a consumer proposal does not affect your assets.
Myth: A debt management plan offers a better credit rating than a consumer proposal.
Fact: Both options result in a R7 credit rating which remains on your credit report for 3 years after your debt settlement is paid in full. Read about the disadvantages of a DMP.
Myth: If I have money problems my only option is filing personal bankruptcy.
Fact: Everyone has several options to deal with their money problems. Filing personal bankruptcy is one option, but it is not always the best option. Debt settlement can be achieved by filing a consumer proposal with the help of a trustee.
Myth: Filing a debt management plan and filing a consumer proposal are the same thing.
Fact: A debt management plan is an informal process done by a credit counsellor. Creditors don’t have to participate in a DMP and it does not compromise your personal debt.A consumer proposal is a formal debt settlement filed by a licensed trustee. All creditors must participate in the process and it will allow you to compromise your personal debts.
Myth: A consumer proposal is the best option to deal with money problems.
Fact: A consumer proposal can be a good option to address money problems, but it is not the only option. You should review all of your options with a licensed trustee.
Myth: Filing personal bankruptcy means you can’t file a consumer proposal.
Fact: It is possible to file a consumer proposal even after filing personal bankruptcy.
Myth: If I miss one payment my consumer proposal will be annulled.
Fact: Missing three monthly payments will cause your consumer proposal to be deemed annulled. Missing one payment will have no effect on your consumer proposal.
Myth: Filing bankruptcy or a consumer proposal will discharge me of all of my debts.
Fact: Most debts are discharged but there are some debts that are “undischargeable”.
Myth: I have to wait the entire term of my consumer proposal to be discharged.
Fact: Consumer proposals always allow you to pay them in full at any time without penalty and you will be discharged upon making your final payment.
Myth: If I file a consumer proposal I need all of my creditors to agree to the terms of the consumer proposal.
Fact: 51% by dollar value of your creditor must vote in favour of your consumer proposal. If so, your consumer proposal is binding on all your creditors regardless of their vote.
Myth: Filing personal bankruptcy will not eliminate my student loans.
Fact: Student loan debts will be eliminated if you have ceased being a student for a minimum of 7 years as at the date of filing personal bankruptcy. If you have not ceased being a student for more than 7 years you are able to make a special application to the court to request that your student loans be discharged.
Myth: Filing personal bankruptcy costs everyone the same amount of money.
Fact: There is no standard fee for filing personal bankruptcy. The cost of filing personal bankruptcy depends largely on your individual situation and income. Cost of Bankruptcy Calculator
