The bankruptcy and insolvency act is designed to ensure that individuals as well as businesses that cannot pay their debts can deal with the situation in an orderly as well as fair manner. The act details the process of a method of settling debt called a “Proposal” as well as Bankruptcy. In either case; a Proposal or personal bankruptcy in New Brunswick, they must be done by a trustee that has been licensed by the Federal Government.
The primary purpose of the proposal process and personal bankruptcy in New Brunswick is to eliminate or at least reduce the burden of debt that the individual cannot pay. During the process the individual will be given debt counselling, this is intended to show the individual how to avoid taking on unmanageable debt in the future. Although counselling and guidance for the future is important, there are reasons and situations which are actually beyond the control of the debtor; such things loss of employment, an unexpected expense of magnitude and divorce are commonly cited. It is not only issues beyond the debtor’s control, there are many people who simply lack the necessary skills required to manage their money, as it is very easy to get credit, it does not take long to get into a financial situation that is out of control.
In the event a proposal simply will not work there is no other viable option but to resolve the debt load through the declaration of bankruptcy. People who find themselves in a situation where they are faced with unmanageable debt also are targets for very aggressive collection attempts. Eventually, these collection methods can be the cause of serious stress which in turn can often lead to other problems. Once the individual files for personal bankruptcy in New Brunswick the debts are automatically frozen, creditors are banned from taking any legal action to collect.
Although people may go bankrupt, secured debt such as the mortgage on your home must continue to be paid if the individual wishes to keep the asset. There are some assets that are exempt; these can be kept without making any payments for them.
Although filing for personal bankruptcy in New Brunswick is not the end of the world, it will have an impact on the bankrupt’s credit report. For first time bankrupts the fact that bankruptcy was declared stays on the report for six or seven years, for those who have filed for bankruptcy more than once they can expect the impact on their credit report to last 14 years.
If your debt load is beyond your capacity to manage then you have the option of filing for personal bankruptcy in New Brunswick. You are invited to discuss your financial situation with the trustees at Powell Associates Ltd.