Fact or Fiction

Get the facts about bankruptcy or consumer proposals so you can make an informed decision for you and your family.

There are a lot of misconceptions about bankruptcy and consumer proposal – we want you to have the facts. Knowledge is power, especially when you’re making a decision that could affect you and your family long term.


We’ve spoken to our personal debt experts here at Janes and Noseworthy, Licensed Insolvency Trustees, – to find out what myths are out there and which facts you really want to know.

FACT: This is a common myth that is simply not true – many personal assets, pensions and, to a certain extent, items like tools of the trade, a vehicle and home are exempt from seizure.

FACT: Personal bankruptcy or consumer proposal is actually an option for any individual who owes more than $1,000 and cannot make the required payments. It is not the amount that you owe, but how it affects your life that matters.

FACT: Income tax and most other government debts are discharged in bankruptcy or consumer proposal.

FACT: If a person has been out of school for more than seven years prior to the bankruptcy or consumer proposal, student loan debt is erased, the same as any other debt.

FACT: A bankruptcy or consumer proposal will stay on your credit bureau record for a period of time but you can start rebuilding your credit rating as soon as you are discharged. For example, you may qualify for a mortgage in as little as two years following your discharge from bankruptcy or consumer proposal.

FACT: In most cases, the only people who will know about your bankruptcy or consumer proposal will be your creditors and whomever you choose to tell.

FACT: Most people who go bankrupt or file for a consumer proposal are good, honest, hard-working, educated and responsible people who do so as a last resort after months, and sometimes years, trying to pay high-interest debts that got behind as a result of a significant life event. The common life events can include relationship breakdowns, job loss, serious illness, the death of a spouse/partner or some other major family emergency.

FACT: Bankruptcy or a consumer proposal will have no effect on your spouse/partner or his/her career if your spouse/partner is not co-signed on your debt. It will also not affect family members who may apply for a student loan.

FACT: The opposite is usually true. Most people have a desire to pay their debts and not being able to do so can cause stress at home. Bankruptcy and consumer proposals relieve the stress because there is an immediate end to payments to creditors and collection activities, such as harassing phone calls.

FACT: When you have been discharged from bankruptcy — usually in nine months — there are no restrictions on what you can buy or own.

FACT: Trustees at Janes & Noseworthy work with their clients to find the best solution to their individual financial situation. This can also include consumer proposals, debt counselling, refinancing, settlement offers, and public education. It is important to note that Trustees are the only debt professionals who can offer a full range of debt relief options. Also, Trustees are licensed and regulated by the federal government who can guarantee protection from creditors.

Janes and Noseworthy, Licensed Insolvency Trustees, have been helping NL deal with debt for 35 years so if you have questions other than the ones answered above please feel free to contact us, and remember – It’s ok to hit a financial rough patch – and it’s ok to get help. 

Call us at 1-800-563-9779 or email: info@janesnoseworthy.ca for more information – we can help.

It’s Ok to hit a financial rough patch, and it’s ok to get help.

Contact us for a FREE confidential consultation

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