Any downsides to declaring bankruptcy?

[rc2002]

Aside from ruining your credit rating for a few years, is there any real downside to declaring personal bankruptcy?

Say you bought way more house than you could afford and you pulled all the equity out. And then you maxed out all your credit and pissed it all away on booze and entertainment and other non-tangible goods. When people come to collect, can you just declare bankruptcy and be absolved of all debt? Is it that simple? Am I missing something?

[lint]

Hmmm, no credit for 7 years, need to pay cash/debit for all transactions. No car loans, or mortgages, or other financing available. No overdraft on your bank account....

Those are the ones I can think of off the top of my head.

[legendboy]

hmm i thought you had to go to court and all your creditors come also.

Then judge arranges terms for you to pay back your creditors.

Something like that, someone in my family did it years ago but i can't remember the details.

I don't think its just as simple as you stated.

[06civic]

Besides it being the wrost thing you can possibly do to your credit, i THINK they see what the situation is, either write off or repayment plan.
The repayment plan is like they wont hound you but you are still owing the money, and when you pay it off thats when ur discharged/settled. From there on its 7 years after you get discharged.

[gkAeris]

yeah you have to pay them back when you have the funds, like say you filed for bankrupcy, aside from what you said in your OP, if you have a job, the creditors will get a sanuction (i can't spell) of your pay legally, so they take like 50% of it before it goes to your bank until you pay it off.

[broken_legs]

Someone in my family declared bankruptcy back in the 90s.

They now have a 800+ credit score.

[JRSC00LUDE]

Having to still pay back your creditors would negate the point of declaring bankruptcy.

They will seize and liquidate your assets and creditors are paid off in percentages based on several criteria from what I understand (ie. everyone gets 35 cents on the dollar etc.).

If you have a repayment plan with your creditors you have NOT declared bankruptcy.

[06civic]

http://www.bankruptcy.deloitte.ca/EN...rs/default.htm

7. Once I declare bankruptcy, what happens to the money I owe?
Once you declare bankruptcy, you will no longer have to deal directly with your unsecured creditors. Instead, the Trustee will work with your creditors to pay them some of the money they are owed. That means most lawsuits and wage garnishments against you will stop.

[rc2002]

I was doing research on this, and you can still own your own car if it is worth less than $5k or if you owe less than $5k on it. If you have a leased car (pending your agreement with the lease company), as long as you make payments on it you can keep it.

Also they won't garnish your wages if you make less than the monthly threshold income of $1,755/month. The surplus income only has to be paid if you make more than that. It's 50% if you make up to $1000 above the threshold and 75% if you make more than $1000 above the threshold.

[Kritafo]

there is not to many downsides..

they set up a meeting with your creditors...and for the most part none of them show up. You get an allowance for everything per month keep a car, keep a house, you get entertainment expenses etc. If you have extra money the bankruptcy firm will take the 100 or 200 and divide it up between creditors.

I love to hear the stories of people jacking up huge credit with the brick etc. Get a house full of stuff, then declare bankruptcy. They base your payments on your regular pay, not what you earn with overtime. I have heard some people don't have to pay anything monthly. Your credit is just crap. With all the credit card companies like Capital one you can just get pre-paid credit cards when needed.

One of my friends is a works up in Edmonton doing this.

[rage2]

Once you file for bankruptcy, you can never be a director or an officer of a company. Why? I dunno haha.

[rage2]

Good read here:

http://www.bankruptcy-canada.ca/

Home excemption is $40,000 per owner. So $80,000 for 2 people. As long as u don't have more that that in equity (spend a boat load from LOC before declaring bankrupt), you can keep your mortgage lol.

Fuck these rules are wicked. You can totally set it up to live super baller, get lots of free shit, and not pay for a lot of stuff back! Get a 5 year lease on a few cars, and you're set!

[Rocky]

The major disadvantage of bankruptcy is that you lose and have to mortgage all your properties.

[JRSC00LUDE]

Look Richard, this really isn't going to help you. Just give me my fucking money man.

[civicman]

A family member declared bankruptcy about 2 yrs ago and still got financing on a new car this year.....

[rc2002]

Originally posted by rage2
Good read here:

http://www.bankruptcy-canada.ca/

Home excemption is $40,000 per owner. So $80,000 for 2 people. As long as u don't have more that that in equity (spend a boat load from LOC before declaring bankrupt), you can keep your mortgage lol.

Fuck these rules are wicked. You can totally set it up to live super baller, get lots of free shit, and not pay for a lot of stuff back! Get a 5 year lease on a few cars, and you're set!

Exactly what I was thinking! You can make poor decisions with your money, live the lifestyles of the rich and famous, and then get bailed out and start fresh. What a country.

Originally posted by JRSC00LUDE
Look Richard, this really isn't going to help you. Just give me my fucking money man.

Too late bitch. I'm under bankruptcy protection now. You'll have to take it up with my bankruptcy agent.

[Whiley]

i know a friends father whos done that 2 or 3 times over the years now, "crazy"

there is also something to do with owing taxes, at least in his case there was, so some sort of protection extends to taht also, or perhaps just the interest and penalties portion?

i dunno the details, maybe someone else can clear that up better

[01RedDX]

.

[Whiley]

how does it work for the back-tax thing?

Originally posted by 01RedDX
You can decide which creditors will be affected.

For example, if you have a $10K balance on a Visa from Bank X, and want to keep making your regular payments, your credit with that lender remains in good standing, and your credit limit with them remains the same..

[Pshrynk]

Ummmm................ how about ethics?

Being a scuzzball and not living up to your financial agreements and obligations?