In Trouble

To help our economy, sometimes people owe to others. in my opinion, debt is everything that is lent to us and must be paid.
things that cause aperson can't pay off the debt

•loss of income

1   Unemployment

2  Illness

3  Divorce

4  Death 

•Overextension

1Poor money management

2 Emergencies

3 Materialism

4 Need for instant gratification

 

sometimes too much or too long payments can cause a problems

• You don’t know how much you owe.

•You often pay bills late.

•You get a new loan to pay old loans.

•You pay only the minimum balance due each month.

•You spend more then 20% of your net income (after paying rent or mortgage) on debt maintenance.

•You would have an immediate financial problem if you lost your job.

•You’re spending more than you earn, using your savings to pay for day-to-day expenses.

 

In order to avoid the problems in debt, there are some things that you have to know:

•Take another (close) look at your budget

1 im your expenses.

2 Establish “needs” versus “wants”.

3 Be realistic about what you can afford.

•Contact your creditors and make a deal with your creditors

1 Create a Budget and Prioritize Spending

2 Work to Catch Up on Necessities First

3 Try Setting Up a Payment Plan

4 Find Extra Money

5 Make Sure You Stay Current on Mortgage and Necessities

    Bankruptcy is a legal process performed under the Bankruptcy and Insolvency Act. Because of your inability to pay your debts, you assign all of your assets, except those exempt by law, to a licensed trustee in bankruptcy. This process relieves you of most debts, and legal proceedings against you by creditors should stop.

Who Qualifies
    A debtor who cannot meet his/her financial obligations or is an insolvent debtor.
 

How It Works

1 When you declare bankruptcy, your property is given to a trustee in bankruptcy who then sells it and distributes the money among your creditors.

2 Speak with a bankruptcy trustee. Before making a final decision, the trustee or administrator will perform an assessment in order to evaluate your financial situation and to provide you with the options available to you.

3 If you decide to declare bankruptcy, you will be required to attend a minimum of two counselling sessions with a qualified counsellor.

4 The trustee will help you complete several forms which you will have to sign. These forms include an “Assignment” and  your “Statement of Affairs”.

5 The forms are filed with the Official Receiver. If there is no opposition, the bankruptcy is discharged and, you are legally bankrupt.

 

 

Advantages

1 The discharged bankrupt is relieved of most debts, and unsecured creditors cannot take legal steps to recover their debt.

2 The bankruptcy generally does not affect your employment.

3 You can avoid being harassed by your creditors.

Disadvantages

1 Some debts are not released such as:

  • alimony

  • spouse or child support

  • debt arising out of fraud

  •any court fine

  • debt or obligations for student loans when the bankruptcy      occurs while the debtor is still a student or within ten years      after the bankrupt has ceased to be a student.

2You may have difficulty in being bonded.