With all the world economic problems of recent years, it is always good to receive a bit of good news. Fortunately, there is good news to be found by looking at the statistics published by the Government of Newfoundland and Labrador. Since 2009, consumer bankruptcies in the province have been in steady decline from just over 2,500 in 2009 to roughly 1,600 in 2012. This decline is a clear indication that consumers are having an easier time paying their debts today than they did a few years ago.
However, there are still reasons to be concerned about debt in the province. Although the government revealed a decline in the number of bankruptcy discharges, the credit reporting agency TransUnion has reported that Newfoundland and Labrador experienced one of Canada’s largest increases in its average consumer debt level. Year-over-year debt growth in 2012 was nearly 8 percent, which may indicate that more residents of Newfoundland are living beyond their means.
Perhaps your debt level increase contributed to the higher overall average growth of consumer debt levels in 2012. If that is the case and you are having difficulty paying your bills on time, then you need the help of the right debt solution. If you are in a desperate financial situation, bankruptcy in Newfoundland may be your only option.
Newfoundland Bankruptcy Overview
Personal bankruptcy is a debt solution designed to eliminate your consumer debts and give you a clean financial start. After all other debt solutions fail, residents of Newfoundland and Labrador can file for bankruptcy through a licensed bankruptcy trustee if they have unsecured debts that total at least $1,000.
Once they have filed for bankruptcy, Newfoundland residents are directed to inform the trustee of their assets and even hand over some of their property. It is the job of the bankruptcy trustee to administer these assets and pay creditors from them. This way, creditors recover at least some of what they have extended in loans to the debtor. As long as there are no major issues, most bankruptcies are discharged after nine months. At that point, the debtor’s remaining unsecured debts are erased, and the borrower’s financial situation essentially starts over.
Pros and Cons of a Newfoundland Bankruptcy
Bankruptcy of course has its share of drawbacks. Those who file for bankruptcy end up ruining their credit for at least seven years. During that period, most creditors will not even consider extending you a loan, and you will find it all but impossible to get a new credit card. Any credit you do get will come with an outrageous interest rate.
Furthermore, while you are permitted to keep at least some of your assets when you have a bankruptcy discharged, you will typically end up surrendering some of your property. There are exemptions, however. For example, you are allowed to keep medical devices and food. The exemption for essential household furnishings is $4,000. That means that you keep as much furniture as you want up to a total worth of $4,000. Once that limit is reached, everything else must go to the trustee, or other arrangements must be made. The exemption for a motor vehicle is $2,000.
Nevertheless, bankruptcy is a viable solution when you need a clean financial start. You will receive consumer financial counselling while in bankruptcy, which will help you learn to budget and do other things that can prevent you from getting into trouble again. Debt collectors will also be prohibited from calling you, which is another plus.
Learn More about Canadian Debt Solutions
Learn more about bankruptcy and other debt solutions that can assist you without ruining your credit. Fill out the debt relief help form for more information on your options.