If you are experiencing very bad debt and you can’t seem to pay any of it off, you might consider filing for bankruptcy. Bankruptcy is a way to start afresh if you cannot meet your payments. Although you will not have to pay most of your debts back, there are strict guidelines in place that will determine whether or not your debts can be discharged
Losing your financial assets
The first thing that will be taken away would be all your assets that have significant value. You are allowed to keep your household assets like clothes and other small items, but your house and your car will be repossessed unless the debts are reaffirmed. Your tax refund will also be taken away from you in some cases. To avoid any unnecessary loss, it is advisable that you contact an expert before filing for bankruptcy in Moncton NB.
A bankruptcy will be reported on your credit report, so this could damage your credit rating to a certain extent. The bankruptcy could be listed on your report for several years. In addition, it may be difficult to obtain new credit for several years after receiving a bankruptcy discharge.
Paying your debt
Your bankruptcy trustee will determine what if any debts you have to repay. You may be responsible for paying an administration fee, and you will have to report your income to the trustee. A plan will be created to ensure that your debts are repaid if repayment is required.
The main benefit of filing for bankruptcy is that your debts will be all eliminated. All financial debt owed to any creditor or government agency will be totally eliminated. This allows you to avoid any legal repercussions from your debt or any financial punishments.