Comparing 2022 to 2021 data, the Office of the Superintendent of Bankruptcy reported there was a delinquency increase of 40% in the Northwest Territories. In full transparency, those numbers meant going from five bankruptcies to seven. With a total population of just over 41,000 though, it’s not a completely insignificant number. The fact that there are delinquency rates at all shows that some residents cannot meet their monthly debt obligations. There are always more people in need of help than those that seek it out.
Perhaps you find yourself in that predicament. If so and you live in the NWT, there is assistance for you. Several debt solutions are available. These solutions include debt settlement programs and debt consolidation loans.
If you are in truly desperate financial shape, however, you may want to consider bankruptcy. NWT residents who file for bankruptcy get a clean start on their finances, and their unsecured debts are erased.
How Do I File for an NWT Bankruptcy, and What Happens in the Process?
Filing for bankruptcy in NWT is not difficult. If you owe at least $1,000 in consumer debt, you are eligible to contact a licensed bankruptcy trustee and file for bankruptcy protection. All you need to do is prove that you cannot meet your monthly debt obligations.
When you file for bankruptcy, your trustee establishes a trust from which to pay your creditors. Although you will not be responsible to pay the full amount that you owe, you still must give something to your creditors in bankruptcy. NWT residents in bankruptcy protection hand over assets that are sold and the proceeds are distributed to creditors. Sometimes the assets are handed over to your creditors without being sold.
When you are in the process of bankruptcy, you do not have to give up all that you own. Bankruptcy regulations in the NWT offer these exemptions:
• household furnishings and goods — $500
• motor vehicle equity — $600
• home equity — $3,000
• food — enough to feed you and your family for one year
• medical devices — all
As in most other provinces and territories, all of your registered retirement savings plans are exempt, but you must give to the trust what you contributed to these plans in the twelve months prior to filing for bankruptcy.
Key Pros and Cons for Bankruptcy in NWT
Besides having your unsecured debts eliminated, other benefits of bankruptcy include:
• ending contact from debt collectors
• financial counselling
• freeing up money previously used for debt repayment
In addition to giving up some of your property to your bankruptcy trustee, there is one major disadvantage to bankruptcy. When you file for bankruptcy, your credit is ruined for roughly seven years after the discharge. You will find it all but impossible to get low-interest loans and credit cards, and most creditors will not even offer you high-interest credit options.
Should I Consider Another Debt Solution Besides Bankruptcy?
The answer to this question is almost always yes, and you can start exploring your options right now by filling out the Canadian debt relief application and getting more information on all of your debt relief options.