How Does Bankruptcy Affect Your Family? – Insights from Vancouver’s Leading Licensed Insolvency Trustees

Have you unwittingly stepped onto the debt treadmill without realizing how fast it goes? Are you saddled with excessive obligations that are creating a financial crisis? In this situation, your first step is to consider debt solutions, such as a consumer proposal or a consolidation loan. This could potentially reduce your overall debt, or consolidate it under a single loan account. However, if your debt is too large, or your assets fall significantly short of your debt value, then you may have no other choice but to consider filing for personal bankruptcy.

Sometimes, a critical illness in the family, or a sudden loss of employment could trigger a bankruptcy situation. Although you may try to bravely shoulder this burden independently, there is a palpable tension in your interactions with your spouse and children. 

  • How can I buy sufficient groceries for this month?
  • Do I have enough income to cover rent?
  • How do I continue to send my children for swimming lessons?

These and other questions will haunt you all at once. Add to that the harrowing calls from your creditors, and frequent arguments that may happen at home. Before you let all the questions and stress get the better of you, discuss and evaluate your options with a Licensed Insolvency Trustee (LIT), such as Crowe MacKay & Company Ltd. As government-regulated and licensed professionals, we can give you a complete rundown on all alternatives, and help you understand the implications of filing for bankruptcy.

Repercussions of Personal Bankruptcy on Families

Bankruptcy is a life-altering decision, and it is not realistic to expect that filing for personal bankruptcy will keep your family immune from the situation. Entering the bankruptcy process under the guidance of a LIT, will help get a grip on how it impacts other family members. This will allow you to communicate with them openly.

Lifestyle Changes: Once you make an assignment in bankruptcy, your family may have to make several sacrifices in personal expenses.

  • They will have to get used to the idea of cutbacks on family vacations, shopping, eating out, or other extravagant sports or extra-curricular activities.
  • If your children attend expensive, private schools, they may have to switch to a free, public school.

Social Stigma: Personal bankruptcy applies only to you. It will impact your credit score for the next several years, and your non-exempt assets will rest with the LIT. Fortunately, bankruptcy laws have provisions to protect you and your family against negative biases. For example, your employer cannot fire you, or discriminate against you in any manner, on the grounds of bankruptcy. Similarly, there will not be any impact on your spouse’s credit score, loan applications or bank accounts.

Communication Breakdown: A major event such as personal bankruptcy could cause a communication breakdown within the family, which in turn may lead to marital discord, or even divorce or separation. How personal bankruptcy affects your family, is directly linked to how openly you communicate with members. Families that are close-knit and have strong bonds will easily make sacrifices to overcome obstacles, and will stick with each other through thick and thin. Being truthful, and painting an honest picture, will help every member of your family to align and adapt themselves to the current situation, and give you strength to tide over difficult times.

Let a Trusted Vancouver Insolvency Trustee Manage Your Bankruptcy Filing

Bankruptcy is a legal process that can often provide more relief than you may otherwise imagine. In fact, filing for personal bankruptcy may actually help you to segregate and eliminate your individual debt and not hold back the financial fitness of the entire family. As Vancouver’s leading licensed insolvency trustee, Crowe MacKay & Co. Ltd. can help you fight your debt battle and emerge victorious. Our certified and experienced professionals will guide you to make the most of this government-offered lifeline, and successfully navigate the process of personal bankruptcy.

If you are considering filing for personal bankruptcy, schedule a free consultation with one of our Licensed Insolvency Trustees in Vancouver. Call us at 604-689-3928, or contact us online today.

This article has been published for general information. You should always contact your trusted advisor for specific guidance pertaining to your individual needs. This publication is not a substitute for obtaining personalized advice.

If you require corporate or personal Insolvency services, Crowe MacKay & Company provides custom solutions for clients, allowing them to live debt-free.

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Common Questions about Debt Relief

Our Licensed Insolvency Trustees are experienced and qualified to answer all your questions about personal and corporate debt. From identifying imminent financial trouble to providing commercial and personal debt relief options, we are committed to educating you so you feel confident and informed. Depending on your income, the amount of debt you have, your monthly financial commitments, and your future goals, we can recommend the best way forward and assist you with all legal and documentation processes.