Review your options to find the debt restructuring plan that is right for you to become debt free.

Bankruptcy: What Are the Pros & Cons?

You will experience immediate debt relief and your stress level will begin to subside once you file bankruptcy. You will receive immediate protection from your creditors. You will no longer receive monthly statements, collection notices, telephone calls or letters threatening legal action. Your unsecured creditors must communicate directly with your Faber Trustee.

You also receive immediate protection and relief from any legal action that was commenced against you by your unsecured creditors. Your Faber Trustee will immediately intervene to terminate any wage garnishee, bank account seizure or unencumbered asset seizure.

You will gain control of your finances. You stop making payments to all your unsecured creditors. We will work with you to develop proper money management techniques to assist you in planning for a secure financial future.

Advantages of Bankruptcy

  • Provides for an immediate "stay of proceedings" that prohibits your unsecured creditors from commencing or continuing any collection action or legal action for the recovery of a debt. This applies to the Canada Revenue Agency ("CRA") for all income tax debt and/or GST debt.
  • Immediately terminates all telephone calls, past due or collection notices, legal action to garnishee wages, seize bank accounts or seize unencumbered assets.
  • All your unsecured creditors must communicate directly with your Trustee.
  • Protects your wages, bank accounts and all of your unencumbered assets.
  • Provides immediate debt relief and stress reduction.
  • Your unsecured creditors are legally required to accept your bankruptcy.
  • There is no voting process required to gain acceptance of your bankruptcy by your unsecured creditors or any ability for one or more of your unsecured creditors to "opt out" or ignore the bankruptcy.
  • Generally, it is the least expensive and the fastest method of eliminating your debt.
  • The amount you owe has no bearing on the cost of filing bankruptcy. The cost of filing bankruptcy is based on your household income and the number of members in the household.
  • The bankruptcy is usually completed in as little as nine (9) months and you receive a fresh financial start.
  • Eliminates most of your unsecured debts, including government debts for income tax and GST.
  • There is no requirement for you to know exactly how much you owe to each of your unsecured creditors.
  • Everyone that files bankruptcy is treated the same. The Bankruptcy and Insolvency Act is a federal act and applies equally across Canada.

Disadvantages of Bankruptcy

  • Negatively affects your credit bureau report and remains on your credit bureau report for six (6) years from the date of your discharge from bankruptcy. If you have multiple bankruptcies, it will remain on your credit report for fourteen (14) years from the date of your discharge.
  • Non-exempt assets must be surrendered to your Trustee or you may repurchase them from your Trustee at auction value.
  • Income tax refunds for the year in which you declare bankruptcy plus any prior year's income tax refunds that remain outstanding are provided to your Trustee.
  • You must complete monthly income and expense statements for submission to your Trustee throughout the period of your bankruptcy.
  • You must surrender all credit cards to your Trustee for cancellation.
  • You are unable to be an officer or director of a corporation.
  • You must disclose the status of your financial situation if you enter into a business transaction.
  • You are unable to borrow money without first disclosing to the credit grantor that you are bankrupt.

These are some of the advantages and disadvantages of bankruptcy. To determine whether a personal bankruptcy, a consumer proposal or other debt restructuring plan is appropriate for you, call Faber today to schedule your free, confidential, no-obligation consultation. We would be pleased to meet with you in person to review your financial situation and discuss with you all options available to you to eliminate your debt and provide you with a fresh financial start.

introduction to personal bankruptcy

steps in filling a personal bankruptcy

advantages & disadvantages

comparison to consumer proposal



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