6. Bankruptcy in Canada

There are a few times in which bankruptcy may be necessary, in which case thank god for it.  Bankruptcy is a second chance that the law afford Canadians so that no one lives in financial slavery.  The law protects you from creditors and is a legal nuclear bomb.  Say John Smith owes $100,000 because predatory lenders have attempted to enslave him with high interest rates and credit limits, if it weren't for bankruptcy protection, John Smith would work the rest of his life with no ability to eascape is debt.  Here are some circumstances when bankruptcy may be necessary.

1.  You're misinformed.

You've been talking to credit card companies and collection agents.  You've fallen victim to their lies and abuse and have been convinced that you will never escape their phone calls and harassment.  Although this is not the case (read the rest of this blog) you may decide to declare bankruptcy to end the harassment.  You should never declare bankruptcy in Canada over credit card debt, simply because it is not enforceable and therefore a bankruptcy is not necessary.  Once again, if you follow the tips in this blog, you'll be fine and escape relatively unscathed.

2.  You're being sued

This WILL not happen, especially if you follow the advice here, but probably regardless.  That said, you may be sued over a contact if its by a business partner or someone who isn't a multi-billion dollar company like TD, Scotiabank, BMO, CIBC or VISA/ Mastercard.  Big companies write off unsecured debts without bothering with a law suit (because they know you'll declare bankrupsy if they win)

3.  The CRA (Canada Revenue Agency)

The CRA can collect their debts without use of the courts, and whenever they please.  Your debt to them never becomes unenforceable, so bankruptcy if often the your only option if your debt is too large for you to pay.  Their fees and interest are ridiculous, but are that way because they want people to pay their taxes.  We get a lot of amazing services in Canada, so they are one creditor that is usually right.  They can be total jerks too, but taxes are a condition of living here, they can't kick you out, nor will they ask for anything if you're unemployed, but if you're earning money you have to pay your share just like everyone else