COVID-19 affected people globally in various aspects, out of which health and finance are the major ones. Millions have lost their lives and no lesser than this have gone bankrupt. As per a survey, 62% of personal bankruptcies in the United States last year were due to medical expenses. Medical bills of some diseases can easily eat away all the savings and investments.
Personal bankruptcy rate has been upsurged not only in Vancouver/Surrey but globally. In many cases, debt negotiations work but many times, filing for personal bankruptcy eases the situation a lot. Let’s have a quick look at the ways by which it helps people.
1. Delay in the payment procedure
As soon as personal bankruptcy is filed, the court puts a stay on all or part of the activities related to debt collection. It doesn’t cancel any proceedings but simply delays the procedure. Hence, you can’t receive any calls from or on behalf of your creditors, no law suit is valid on your debts, no foreclosures on home mortgage, and no property can be repossessed unless the stay is lifted.
2. Certain debts can be avoided
Some debts can be discharged or avoided by filing for bankruptcy. This means that you can back out from the responsibility of repaying these debts which generally includes personal loans, credit card bills, medical bills, etc. Such debts are termed as dischargeable debts. No creditor can legally ask for money in any way before the proceedings get over.
3. Credit can be rebuilt sooner
No, it doesn’t mean that bankruptcy filing doesn’t hamper credit. Filing for personal bankruptcy gets reflected on the record for 7-10 years but it is seen that some people have actually started rebuilding their credit scores after the bankruptcy is filed. One reason can be that dischargeable debts are canceled by filing for bankruptcy; hence, the debtors can start it afresh and look forward to rebuilding their credit.
4. Ownership of the property may be retained
There are certain exemptions in personal bankruptcy policies that may allow you to maintain the ownership of your assets and the court can’t seize those during the proceedings. The exempted part may be the whole amount of the asset or a part of it, any particular type, or any asset you own. It can be applied in both the types of bankruptcies- Chapter 7 and Chapter 13.
The Final Words
There are various ways of managing debts like debt consolidation, personal bankruptcy, credit counseling, etc. If you are from Vancouver/Surrey and are facing trouble in debt management, Debt Consolidation BC is the perfect solution to your problem. It has an experienced team to guide you in the best way possible.