What happens to my assets in bankruptcy?
There is a lot of misinformation out there about what happens to your assets when you file for bankruptcy. One of the common misunderstandings is that you lose everything when you go bankrupt. That is simply not true.
Many of your assets are protected in bankruptcy by claiming either Federal or Provincial exemptions that are available to you. To the extent that your asset value may exceed an exemption value resulting in the excess equity of that asset being available to your creditors, arrangements can be made with your Trustee to pay that amount in your bankruptcy proceedings to the Trustee for the general benefit of your creditors and you will be able to retain that asset.
It may be tempting to just stop making payments on all of your debts, but this will only make things worse in the long run. Creditors will pursue collection activities ranging from commencing legal actions to collect, seizing your assets and garnishing your wages if unpaid debts are not dealt with. This means that it is important for individuals to work with their creditors as soon as possible before things escalate.
If you ever find yourself in this situation then reach out to a licensed insolvency trustee as soon as possible. We at JW Weber & Associates Inc will be able to review your specific situation and recommend a course of action to set you on a path to a financial fresh start.