4. Decide if bankruptcy is your best option

If you are having money problems, bankruptcy is not your only option. There are other options that can help you keep more of your assets, like your home or your car. For example, you can:

• speak with your creditors directly about making a repayment plan
• apply for a consolidation loan
• file a consumer proposal

The advantages of bankruptcy include:

• you get rid of most or all of your debts, and
• if it's your first bankruptcy, you get a ‘fresh start' after 9 months. But, the bankruptcy will stay on your credit report for 6 or 7 years after you are discharged from your bankruptcy. A bankruptcy on your report can make it harder to get things loans or credit cards in the future.

The disadvantages of bankruptcy include:

• you lose all your credit cards,
• you may have to sell some of your assets, which could include your house or car, and
• there is a public record of your bankruptcy that anyone can find. A bankruptcy can make it harder to get a loan or credit card, or rent a place to live in the future

Even if you file for bankruptcy, there are some debts you might have to pay after bankruptcy.

In some situations, you might not be able to file for bankruptcy. For example, you can't file for bankruptcy if you have enough assets to pay off your debts. If this is you, a trustee or non-profit credit counsellor might suggest you make a payment plan with your creditors on your own.

Your assets include your:

• house and furniture
• car and other vehicles
• clothes and jewellery
• tools
• investments like an RRSP, Canada Savings Bond, and RESP

If your debts are $250,000 or less (excluding any mortgage on your home), you might be able to file a consumer proposal instead. A consumer proposal lets you pay back some of what you owe, and then forgives the rest.

You must tell your Licensed Insolvency Trustee about all your assets before you file for bankruptcy or a consumer proposal. It is important to know that what you tell your trustee is not privileged. That means that the trustee can tell your creditors what assets you have.