Most of the people I meet in my Mississaugaoffice have some pretty significant misconceptions about the bankruptcy process. This is not surprising as for most of them they have never needed to know anything about bankruptcy, until now.
Many people say that they “heard from a friend” that “bankruptcy is 7 years”. Frankly there is a lot of misinformation out there. Some of it is even put out there by “DebtConsultants” to confuse the issue and get people to sign up with them in expensive and doomed settlement agreements.
so what is the real story?
For most people for whom bankruptcy is a viable option for dealing with their debt the process takes 9 months to complete. Some people who have higher incomes the process can be extended out to 21 months to enable more money to be collected for the creditors, The cost of bankruptcy and how surplus income works I wrote about earlier this month you can find that post here . If you have been bankrupt before, the process is longer automatically, 24 to 36 months depending on your income.
So where does the 7 year thing come from?
After you finish the bankruptcy say in 9 months, there will be a footnote entered on your credit report indicating when you filed for bankruptcy and the date you finished. This record stays on the report for 6 years. So 9 months plus 6 years is pretty close to 7 years.
For many people who have too much debt and yet have a decent income, a bankruptcy is not the best option, for these people often a ConsumerProposal is the right solution for dealing with their debt.
If you have too much debt and need help dealing with it give us a call at 310 -PLAN ( 7526)
or click on www.hoyes.com and lets get started.
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