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What happens if I owe tax debt to the CRA?
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When to File Bankruptcy
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It's not always easy to tell if the time is right to declare bankruptcy, but common signs include long-term unemployment, inability to meet monthly payments on credit cards and letters from your creditors. Bankruptcy provides immediate protection from your creditors and your unsecured debts are eliminated upon discharge from bankruptcy. But before you decide on declaring bankruptcy, consider your situation carefully.
Reasons for Filing for Bankruptcy
If you can reduce your debts or work out a solution with your creditors without resorting to bankruptcy, this is usually the ideal option. However, there can be a number of contributing factors that make bankruptcy your best—and sometimes only—option. Your Local Licensed Insolvency Trustee will review all alternative options with you including reworking your budget, or debt consolidation, credit counselling or filing for a consumer proposal.
Trying to address your increasing debt situation can be overwhelming when you do it alone. It can be even more difficult to address your debt if legal action is involved, such as harassing calls from your creditors or any pending lawsuits for delinquent bills. Talk to your MNP LTD Licensed Insolvency Trustee to figure out a solution tailored to your situation.
Signs You May Have to File for Bankruptcy
There are many danger signs that are important to be aware of if you are thinking about declaring bankruptcy. One warning sign if impending bankruptcy is if you've taken out multiple loans and your pay cheque is being eaten up by your loan payments. If you've gotten to the point where your combined minimum debt payments exceed your normal monthly income, bankruptcy might be the best solution to your debt problem.
Also, if you have more than one debt in collections, this means you have fallen behind on your minimum payment loans and creditors may take legal action. If you think this is your current situation, it is essential to speak to a Licensed Insolvency Trustee about possible solutions and to see if bankruptcy is the best option for you.
Deciding if Bankruptcy is Right for You
If you're struggling to pay your bills on time and calls from creditors just won't stop, it's time to think about some long-term solutions. Your financial situation is unique, so speak with an MNP LTD Licensed Insolvency Trustee to learn more about the bankruptcy process—and explore any alternative solutions that may be available to you. Book a free consultation so we can help you decide if bankruptcy is the right choice for you.
Related Questions
- How to file bankruptcy
- How does bankruptcy work?
- How often can you declare bankruptcy?
- How does bankruptcy affect your credit rating?
- What happens after bankruptcy?
- What is personal bankruptcy?
- Canadian bankruptcy laws
- Alternatives to bankruptcy
- What is a debt consolidation loan?
- What is a consumer proposal?
- What does insolvency mean?
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