Debt and Divorce: What You Should KnowApr 19, 2017
Not only is divorce an emotionally taxing process, it’s also financially draining. In fact, a relationship breakdown is cited as one of the top five reasons why Canadians choose to declare bankruptcy, with approximately 10 per cent of bankruptcies filed occurring as a result of a divorce or breakup. For those dealing with debt and divorce, here are a few important things you should be aware of:
There are bankruptcy alternatives available
Although divorce is one of the top reasons that individuals file for bankruptcy, it does not mean that everyone who gets divorced will need to file. For those who are experiencing debt issues as a result of divorce, there are bankruptcy alternatives available that can also provide relief.
A consumer proposal, for example, provides many of the same protections and benefits that bankruptcy provides, without having the same impact on your credit or causing you to give up any of your belongings to repay creditors. A consumer proposal is an agreement with your creditors that states that you will repay a portion of the amount you owe and will be provided with an extended timeline in which to do so, up to a maximum of five years. If you’re considering a consumer proposal as an alternative to bankruptcy, you will want to speak with a Licensed Insolvency Trustee (LIT) in Bracebridge. Only an LIT can file a consumer proposal or file for bankruptcy on your behalf.
You are not alone
Just as you are not the only one dealing with divorce, you are also not the only one who is experiencing problems with debt as a result. If you find yourself feeling stressed or overwhelmed by your financial situation after your marriage has ended, it may be a good idea to seek financial assistance and advice.
For those struggling to repay the debts they owe, debt relief professionals can provide much needed help and assistance. A Licensed Insolvency Trustee can provide you with information and advice regarding all of the debt relief solutions available to you, including debt consolidation, filing a consumer proposal, or, as a last resort, filing for bankruptcy. If you choose to file for bankruptcy, or file a consumer proposal as an alternative to bankruptcy, your LIT will guide you through the process and address any questions or concerns you may have.
It is possible to rebuild after divorce
Just as you will rebuild your personal life and move on after your divorce, it is also possible to rebuild your finances and regain financial stability. Whether you choose to file for bankruptcy, a consumer proposal, or another debt relief solution, there are steps that you can take in order to help re-establish your financial situation. These steps include keeping a personal budget in order to keep track of your expenses and keep your spending on track. It may also include applying for a secured credit and using this credit card to help rebuild and repair your credit rating after bankruptcy. Again, your LIT can provide you with the advice and assistance needed in order to help you bounce back.
Dealing with debt and a divorce can be overwhelming. Join the conversation and share your tips for staying strong and resilient when dealing with overwhelming debt. Remember to include the hashtags #BDOdebtrelief and #LetsTalkDebt.