Personal Finance – What a Canada Bankruptcy Trustee Can Do For You

Posted by: Sandy Lyons on 02/10/2011

Did you know a Canada bankruptcy trustee can do much more for you than help you through the personal bankruptcy filing process?  We are licensed by the federal government to counsel our clients not only on bankruptcy as a solution to debt problems, but to also explore available alternatives to bankruptcy.  Personal finance techniques like budgeting and credit counseling are an integral part of what we do. 

Personal finance is all about knowing the specific details of your financial life – what you own, what you owe, and how your income is distributed.  While some of the people who come to see us are well aware of the total dollar amount of the debts they owe, few know the total dollar amount of what they own.

Personal net worth is the difference between your assets – what you own – and your liabilities – what you owe.  Everyone should know his or her net worth, but if you are experiencing financial difficulty, it is all the more important.

First, if you think declaring personal bankruptcy in Canada might be for you, you must be legally insolvent to do so.  Insolvency means you can no longer keep up with your bills, either with your current income or your assets.  In short, you must owe more than you own.  So if you have $150,000 in debt but you inherited a vacation property now valued at $175,000, you are not insolvent.

Second, in the early stages of financial difficulty, many people are able to get back on their feet by liquidating assets.  You can sell your expensive cars for more economical transportation, or perhaps rely entirely on public transportation.  If you have assets of high value, you can use those assets as collateral to get a debt consolidation loan.  Any Canada bankruptcy trustee can help you itemize your assets with an accurate assessment of their fair market value.

Many of the people we help with a Canada bankruptcy do not have a personal budget.  Budgeting is an old-fashioned personal finance technique that far too many Canadians ignore.  We can help you work out a budget by first teaching you how to track where your money goes.  The minimum monthly payments on your credit cards do not reflect the expense items behind them.  You need to know these expense categories to look for areas you can budget to spend less.

Personal finance techniques help you better manage your money.  Today we no longer use credit cards strictly for large purchases.  When we swipe the card for close to everything we buy, it is easy for things to get out of control.  A Canada bankruptcy trustee can also help you with formal or informal credit counseling so you can better manage credit in the future.