Will Filing For Bankruptcy Or Consumer Proposal Affect My Children

2018-01-18   minute read

Eric Findlay


Consumer Proposal

Person talking on a cellphone looking at spreadsheets on their laptop

You've done everything you can to provide a good life for your family. You've worked hard to put a roof over their head, food on the table, clothing on their backs — to make sure they'll never want for anything. But there's a dark cloud looming above you. Debt. So much debt. And it's all you can think about. Every time you check your online banking or walk to the mailbox, your mind is spinning at the thought of the mounting bills and collections notices. You're losing sleep, having trouble focusing on work, increasingly on edge and nearing a breaking point. 

You've accepted the only way to get the financial fresh start you and your family need is to file for bankruptcy or consumer proposal. Only, now you have new worries — like the potential run-on effects of your decision and whether it will get in the way of your children achieving their long-term financial or educational goals. 

This stomach churning rollercoaster you're on is stressful enough without those thoughts weighing on your conscience. But, you'll be happy to learn there's good news ahead. Most importantly — filing for bankruptcy or a consumer proposal will not negatively impact your children. In fact, it may actually benefit them in several ways.

Silence the Creditors and Debt Collectors

Once you file for bankruptcy or consumer proposal, your creditors and collections agents are prohibited by law from contacting you. No more past due notices. No more harassing calls at your home or workplace. No more feeling like you're constantly hiding from your problems.

Rather than dealing with every bank, loan or credit card agency individually, all communication flows through your Licensed Insolvency Trustee. Their only interest is seeing you achieve a fair and positive resolution, which includes you being debt free at the end of your relationship. This allows you to immediately refocus and reconnect with your family instead of always looking over your shoulder or wondering when the other shoe is going to drop.

Gain Financial Literacy

As part of your bankruptcy or consumer proposal, you will be required to attend financial counselling sessions. Your Licensed Insolvency Trustee will guide you through numerous money management skills with an emphasis on budgeting tips and techniques. In the near term, these will give you the confidence needed to maintain a debt-free and financially secure lifestyle as you navigate the restructuring process and beyond. Over the long term, you can teach the same skills to your children to reduce their chances of falling into the same lucrative credit traps — increasing the odds of breaking your family's cycle of debt for good.  

Focus on New (and Better) Financial Goals

With your debt out of the way, your time, energy and money will be freed to pursue better and more productive financial goals than just staying current with your payments. You can begin building an emergency saving fund to reduce your likelihood of falling back into the credit crunch when an unexpected expense comes up. You can contribute to a retirement fund as an investment in you and your spouse's future. And you can set money aside in a Registered Education Savings Plan (RESP), so your children won't need to worry about beginning their careers with the same debt stress you know all too well. Not to mention, the opportunity to take debt-free vacations, afford sports or other activities for your kids and not feeling overwhelmed by expensive holidays and special occasions.

Ditch the Stress

It's no secret that debt is one of the single most stressful experiences a person can go through. It is a leading cause of divorce, associated with high blood pressure, and correlates with increased rates of both depression and anxiety. If you're constantly feeling irritable, sleep deprived and worried about your financial future, you're not going to be the best, most present version of yourself. While getting rid of debt won't solve all your problems, it's certainly a great place to start.

For one, it will likely make you more mentally and emotionally available, healthier and able to focus on the world beyond your bank account. Not to mention, taking the necessary steps to address your issues head on sets a positive example and makes you an even better role model for your children — teaching them how to problem solve and preparing them to triumph despite seemingly overwhelming situations.

A Licensed Insolvency Trustee Can Help

If you're feeling the pressure of overwhelming debt and are looking to make the best decision for you and your family, help is available. A no obligation Free Confidential Consultation with a Licensed Insolvency Trustee is your first step to finding the right Life-Changing Debt Solution and a financial fresh start.

Consultation icon