Advantages and Disadvantages of Filing for Personal Bankruptcy

Filing bankruptcy is often the quickest and cheapest way to get out of debt when you cannot repay.  Below is a summary of the advantages and disadvantages of filing personal bankruptcy. Since this is only a summary, we recommend that to learn more, you either read our bankruptcy section (by clicking here) or contact us for a free no-obligation consultation where we will go over in detail everything that you need to know about filing personal bankruptcy.

Advantages of Filing Bankruptcy

• It is often the quickest and least expensive way to wipe out your debts;
• The process can be completed in as little as 9 months
• Can include income tax debts
• Can keep your car, tools and your personal belongings
• Unlike in a consumer proposal, you do not need your creditor’s approval.

Disadvantages of Filing Bankruptcy

• It results in the lowest credit score (an R9) and stays on your credit report for at least 6 years after discharge
• If your monthly income is over the government guideline (see Surplus Income, click here), the cost and length of the bankruptcy is increased
• Not all debts are wiped out (click here to see the list of debts that do not get discharged, even in a bankruptcy)
• Not all assets that you own are exempt.  As a result, you could lose non-exempt assets or re-purchase them from the trustee
• Can affect your professional memberships and ability to hold certain type of licenses (if this applies to you, there are other alternatives to dealing with your debt problems).