The short answer to the question “Is bankruptcy bad?” is no.

When a lender borrows money, they are gambling that the borrower cannot only repay the debt – but also that the borrower is going to pay them a fee for doing so.

The borrower is betting that they can utilize the borrowed funds to increase the value enough to not only repay the debt but also pay a fee for the use of the funds.

When the gamble fails both sides lose. It can be easily argued the lender has the easier ride. Banks especially are not actually using their money to lend, but simply creating a line item in an accounting field and setting up a payment plan to receive interest, where the borrower has to actually earn the funds to repay as well as all interest due.

In this case you can see that neither party is more at fault if the loan fails. They both gambled and they will both pay a price.

For many people, the thought of filing bankruptcy is intimidating. It conjures up all sorts of horrible images of people losing their home, losing their car and destroying their credit rating forever. The reality is, people are usually misinformed when it comes to bankruptcy.

The reality is that the Bankruptcy and Insolvency Act (BIA) was created “to give an honest but unfortunate debtor an opportunity to get a fresh start.” It actually says those words in the beginning of the BIA.

The bankruptcy process WASN’T designed to make peoples’ lives more difficult. The system is focused on rehabilitation and providing a fresh start.

Bankruptcy is designed to rehabilitate financial situations and provide a fresh start. The personal bankruptcy process shouldn’t be viewed as the end, but instead as a new beginning and an opportunity to build a better future.

People may also believe that they will lose their house, car and other assets if they go bankrupt. This is typically not the case. Most basic assets are exempt from seizure meaning that you keep them. If that’s not the case, your Trustee will try to customize a payment plan which will allow you to keep your assets.

From my years in the insolvency business, I have seen how filing personal bankruptcy has been a positive event for many people and helped them to get the fresh start that they desperately needed. And in most cases, people wish they would have filed sooner.

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