One common problem families face when they go bankrupt is they don’t have the financial resources to go through the bankruptcy process. This can seem like a never-ending cycle, but it’s important to remember the long-term benefits of declaring bankruptcy and the resources available to help pay for the bankruptcy process. In this article, we’ll look at the question, “Why does declaring bankruptcy cost money?”
Losing Your Assets
Beyond having to pay money to a specialist to go through the bankruptcy process, you may also lose access to or be required some of your assets.
The types of assets that may be taken during a bankruptcy vary by province, and so it’s important to work with a licensed insolvency trustee to determine which assets are included within your bankruptcy process.
The Financial Costs
The financial costs of having to go through the bankruptcy process are an element that few consider when they decide to begin bankruptcy. There are specific administrative costs that must be paid to the trustee according to governmental regulations. These costs will be divided into monthly payments over a set period and can average about $200 per month, based on the length of the bankruptcy process and its complexity.
In some cases, there may be additional costs beyond having to relinquish assets and provide the monthly fee to the trustee. Some people find that, having declared bankruptcy, they receive a significant amount of income during the process. In this case, they may be required to pay the surplus income that goes beyond the amount the government considers Basic Living Expenses.
Depending on your income, a portion of the surplus is paid into the bankruptcy process through a monthly fee. For those that have a significant monthly income, a consumer proposal might be a more suitable means of protecting their assets over the long-term compared with bankruptcy. It’s also important to note that family household income will influence the amount of additional costs that must be paid through bankruptcy.
By gaining a clear perspective on the costs involved in the bankruptcy process, you can navigate your bankruptcy seamlessly while reaching financial freedom over the long-term. To discover more on bankruptcy and the costs involved in this process, speak with our expert team today.