One of the leading causes of divorce in Canada is financial mismanagement. And one of the leading causes of bankruptcy is divorce.
The effect of family support obligations, the division of family assets, and the loss of income can have a devastating effect on both parties going through a separation.
When I meet with people who are experiencing money problems I always review the following options:
Can you dig yourself out of debt on your own?
Could you should you make a consumer proposal?
Is filing personal bankruptcy your best option?
Many people who are recently divorced and in financial trouble are under the impression that bankruptcy will eliminate all of their debt. The truth is, bankruptcy does not eliminate alimony or child support. Your divorce or separation agreement may require you to make support payments in exchange for having kept certain assets in the divorce. If you declare bankruptcy you will lose those assets but will not be able to eliminate any debts related to your support payments.
Therefore, deciding which option is right for you would depend on your personal situation. If you are in debt and don’t want to file personal bankruptcy, making a consumer proposal is probably your best option.
To see how much a consumer proposal might cost you can use my Debt Options Calculator. To get a more personalized assessment of your situation please contact my office to arrange a free no obligation initial consultation.
