When you’re ready to declare bankruptcy, it’s normal to worry about the cost of a personal bankruptcy. The consequences of a personal bankruptcy are many, but the money question worries us most. Being already in debt, personal bankruptcy is what we hope, a recourse to finally be able to breathe a little.
Our financial advisers are delighted to share their expertise with you. To find out how much a personal bankruptcy costs, we will show you how the trustee’s fees are set as well as any other information you need.
How much does a personal bankruptcy cost: trustee fees
If you wish to declare bankruptcy, you will have to deal with an authorized trustee. Rest assured, their fees are set by the bankruptcy and insolvency law. So you don’t have to worry about paying your trustee. Their salary is taken directly from the funds accumulated in your file. On the other hand, it is good to note that the salary of a trustee varies according to each file. It is therefore difficult to establish how much a personal bankruptcy costs when talking about trustee fees.
The fees depend on the amount of your assets. If your assets are less than $15,000, the trustee will be entitled to 100% of the first $975 of all revenue. Then, it’s 35% between $975 and $2,000, and 50% above $2,000.
For assets over $15,000, fees are equivalent to 7% of assets as well as any compensation approved by the court and the creditors. Your trustee may also ask you for guarantees or deposits if the assets are insufficient or doubtful. The actual expenses incurred are part of this compensation.
How much does a personal bankruptcy cost: serious consequences
The main question to ask yourself about how much a personal bankruptcy costs is not a question of numbers. Rather, they are consequences. While it is important to know the monetary cost of a personal bankruptcy, it is much more important to know the consequences.
One of the main consequences of personal bankruptcy is the effect on your credit file. No matter how much a personal bankruptcy costs, the impact on your file is immense. After a first bankruptcy, it is added and stays in your file for 6 years, which can harm your borrowing. After 2 bankruptcies, it’s 14 years on your file. If you wish to obtain financing during this period, this could prove difficult and you will have to be extra careful.
It’s also good to note that personal bankruptcy is not your only option. An experienced financial advisor could recommend the consumer proposal or even debt consolidation, if you can take it on.
In addition, bankruptcy doesn’t solve all your problems. It’s not a magic solution, although it can take a heavy weight off your shoulders. The reasons that led you to bankruptcy must be explored in order to not repeat the same mistakes. We therefore strongly recommend that you use the services of experienced financial advisers to help you regain your financial health as soon as possible.
If you would like to learn more about the cost of a personal bankruptcy, contact us. An experienced member of our team will gladly chat with you.