Top 10 Reasons People Say They Don’t Want to File Bankruptcy

#10. Losers do not pay their debts!

There is this concept that those who are unable to pay their debts are somehow irresponsible and losers. This is false. What we know is that, how we get into debt is by being very good with our money, this is how more and more credit is extended to us.  Lenders do not extend credit to people that are bad with their money, the want to lend to people that will pay interest.  Inside the credit arrangements, credit lenders are aware of the ability for people to restructure, because this stuff happens.  It is often something that is outside someone’s control that they end up not being able to repay their debts as they become due.  Losers do not play the game; they neither win or lose and they are a spectator.  If you are engaging in credit activity, you are borrowing money for a current desire for a future potential.  It may be because you are going to school to build your career or starting a business to serve the community or funding a vacation.  It is usually about the hope for something in the future and based on the ability to pay it back. Bad things happen to good people all the time and that is why we have the option to file into a bankruptcy.

#9. My father would roll over in his grave.

Often when we are in a conversation with someone at Bromwich+Smith, people have a huge burden of guilt around what their parents would think of them. Your parents who love you and want what’s best for you, would be terribly disappointed if would look back at their memory and think they would judge you poorly and say that you don’t deserve to restructure. It is an unfortunate place and your father would roll over in his grave because he would be heart broken for you.  When your child gets into situations where they require the assistance of others, parents are pleased that they are willing to use the resources in the community to help lift them up.  Parents are appreciative that there are resources to help their children and would take great pride in their children knowing when to reach out for help and who is best suited to help them.  It is a hand up not a handout and it’s part of the fabric of the community.  Once you are uplifted, you can then be a greater contributor to the community.

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#8. I cannot file for bankruptcy or I will lose my job.

You cannot be disciplined for exercising your right to restructure.  You cannot be disciplined at work, because you, on your private time have utilized the insolvency law in Canada.  The insolvency system in Canada is one of the crown jewels of insolvency laws in the world. To think that you would lose your job because you exercise your rights is outrageous.  Why do people believe that they would lose their job for declaring bankruptcy?  We do not fully understand what bankruptcy really means; we often talk about being morally bankrupt.  This is a legal process not a moral one.  In board games when you ‘go bankrupt’ the game is over!  That is not the same in real life.  The game is not over when you sign into a bankruptcy, it is an opportunity to start over.  You cannot lose your job for filing bankruptcy.  There are many stats that show that the crushing burden of debt, has incredible impact on your mental health and productivity.  Not resolving your crushing debt could lead you to miss work, be less focused or productive at work, maybe have a negative attitude at work and these things could lead to job loss.  If you are concerned about job loss, talk to your HR Department, if anything, they will most likely empathize with you and commend you for taking action.  It is illegal to fire someone because they filed into bankruptcy.  When you apply for a job, sometimes they ask if you have declared bankruptcy. Would this stop me from getting the job?  You never want to start a new relationship without full honesty and Insolvency records are public records – there is a fee to access it to limit access to those that actually need to have it.  You always want to answer truthfully. Employers may ask that if you’re in a finance role and may want more explanation before you start working with them.  There are bankers, lawyers and business owners who have filed bankruptcy and are working in their respective fields.

#7. It is better the devil you know than the devil you do not know.

This speaks to our comfort zone or more accurately our familiar zone. Humans are creatures of habit.  If you look at abusive relationships, there is absolutely nothing comfortable about it, it is not really our comfort zone, but it is familiar.  Somehow, we tend to be fearful of the unfamiliar and settle for the familiar even when it really is not comfortable at all.  It is the ‘devil’ we know after all, but it is still the ‘devil’ or that uncomfortable but familiar thing.  One of the comforts of not moving forward is that you know what tomorrow brings; tomorrow brings what happened today and today is the consequence of what happened yesterday.  If I move forward, if I change, if I take a chance today, I do not know what the outcome is.  If I stay here, remain static, there is a safety in that.  It is okay to stay safe.  We are not the sum of our past choices; we are the sum of our present mindset and our future focus.  It is not what is real that is the highest ranking for us but what is possible.  That is what propels us as individuals and as a society into the future. What we have today does not necessarily have to stay this way, we can move forward.  Who knows what success you may have in the future, it may feel like it’s better to stay under the crushing burden of debt than to move forward to get out from under it. That is simply not true.

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#6. I am never going to get credit again and we live in a credit-based society. 

If you have a relationship with someone, and you are going to meet them for lunch, and you are running late they will understand if you let them know.  If you are perpetually running late, they may stop having grace with you.  You will see them again and there may be other friends as well that you may be perpetually late with so you may get a reputation.  Time heals all wounds they say, over time things fall off your credit report too.  Eventually any late payments and restructuring will come off your credit report.  In the meantime, it will impact your credit rating – yes but you are not your credit rating.  YOU ARE NOT YOUR CREDIT RATING. The credit rating is a tool that allows credit lenders, to assess the risk of lending you money.  Creditors want to lend money, that is how they earn interest, you may pay a higher interest rate, but it will be available to you.  When we take on credit, we are helping the creditor too.  Just like when you drive through a burger joint and buy a burger.  You are grateful to them for the burger, right?  The burger joint is grateful for you, for your business for building their business. The question is do you want the credit that is given to you?  Take an inventory of where you are at and make the decision to move forward. 

#5. I am no good with money and I earned this penance.

This one is particularly pervasive. One of our values at Bromwich+Smith is non-judgement and we are not going to judge someone either way.  It is your journey and you need to walk through it, we are ready to walk with you.  As Licensed Insolvency Trustees, we are the only ones who can have your debts forgiven. There comes a time you need to forgive yourself and be okay with yourself.  No one can tell you when that is, it is a very personal journey.  Ask yourself if you would want to hang out with someone that abuses you as much as you abuse yourself?  We harm ourselves in our quiet. When we lie down at night is usually when we are paying our interest on our penance.  Carrying this burden will impact your work, your relationships, and your well-being.  Our debt is so incredible and crushing that we can take little breaks maybe when we sleep or when we escape but it is always there.  You can change things.  If you have made mistakes in life, if you were not good with money, it is okay.  When you are ready to stop abusing yourself, reach out to a Licensed Insolvency Trustee to explore how you can help yourself.  The most important resource is not oil or lumber it’s people and this is a people business.

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#4. I do not want to go to my grave having been bankrupt. 

Why? What is the reason behind that? Often it goes back to #10, I do not want to be a loser, I do not want to break my promises.  All promises are made on predictions of the future but when things in the future change, we need to go back and discuss the original promise. In the event someone passes, and they have debts, the executor of the estate may have to bankrupt the estate if there is not enough equity or enough assets to pay off the deceased’s debts.  Imagine the stress and emotional burden of losing the loved one and then add to it that he or she was battling so much with debt.  It is heavy on the family and can leave them feeling guilty for not knowing and not helping.  Stress is a killer and one of the biggest stresses people have is money. This is tragic particularly as we see more and more seniors struggling financially and not knowing how to reach out and who to reach out to.  Do not be afraid to talk to someone about your debt and get the help you need.

#3. I do not want to go to jail.

 No one wants to go to jail.  The concept of going to jail for filing bankruptcy has some history.  The word bankruptcy means broken bench.  A merchant would have a bench in the market to sell their products. If that merchant did not pay their creditors, the creditors would get together and get a Trustee.  The Trustee would take possession of all their assets and break their bench so they could no longer be a merchant in that marketplace AND take them to debtor’s prison.  The only way to come out of jail is to pay all the creditors back by friends and/or family.  The most valuable resource in a community is people, so to take the bread winner and incarcerate them does nothing good for the family and ultimately nothing for the creditors either as they normally get nothing too.  The whole idea behind the Canadian Insolvency Act is rehabilitation.  There are four key principals of the act; 1. Rehabilitation of the individual 2. Control and distribution of assets for the equitable treatment of creditors 3. Investigation 4. Promote faith within the system.  Jailing people who cannot pay their debts does not promote faith in the system or help rehabilitate individuals.

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#2. I do not want to be a bad role model to my kids.

One of the comments we got on our Facebook page was “You people make me sick; you’re teaching kids they don’t need to pay back their debts. I’ve always paid back my debts, and this is the problem you’re teaching people not to pay back their debts and not be responsible”. It takes courage to share perspectives so we can have a dialogue.   If teaching people about their rights to restructure their debts under the law is to corrupt people, then so be it.  Nobody wants to be a poor role model, exercising our rights does not make us poor role models.  What is a poor role model is judgement of others, unforgiving judgement of ourselves and banging our head against the wall over and over and hoping the wall will become a door. If a picture is worth a thousand words, actions are worth an entire novel. Our children pay attention to our actions and that gives us an opportunity to teach kids how to turn to help within the community.

#1. I can file a proposal instead.

This is so important.  Nobody wants to see a doctor or dentist, but if you have a tooth ache go see a dentist.  Do not talk to your friend or a mechanic, you need to go to the dentist for the right help. Now here is the irony, in order to avoid bankruptcy, you need to see a bankruptcy trustee – that was the original name for Licensed Insolvency Trustees.  The name was changed by the Office of the Superintendent of Bankruptcy because Bankruptcy Trustee was not palatable for the community.  No one wanted to go to a Bankruptcy Trustee. When the name changed, many other companies started forming up to offer to help people. Often they were charging fees to bring clients to a Bankruptcy Trustee ultimately to file a Consumer Proposal.  You need to see a Licensed Insolvency Trustee to sign into a consumer proposal.  The name was changed from Bankruptcy Trustee to Licensed Insolvency Trustee to attempt to change the dialogue and comfort level around talking about restructuring and filing proposals.  Approximately 70% of the Canadians we help at Bromwich+Smith elect to file a proposal instead of bankruptcy.  The choice is up to the consumer.  You can even choose to switch from Bankruptcy to consumer proposal  – talk to your trustee or call us.  Filing a consumer proposal is a terrific opportunity for the following reasons:

1. It does not impact your assets and you can keep them and even keep new money you come into during the proposal such as an inheritance
2. It is a certainty of process – you know exactly what will happen and what the outcome will be
3. There is a dignity in filing bankruptcy and saying, “I can’t do this and I have the right to file bankruptcy.” There is also dignity to say “I could go into bankruptcy, I have that right, this is what you’ll get.  I’m willing to give you a little more and do a consumer proposal.”  That is an important consideration and a great alternative to bankruptcy that all Canadians have the right to access. I the creditors say no, it triggers a meeting to discuss why the said no and renegotiate.  98% of the time the creditors accept a proposal it is very rare they do not.  Usually, they say no because they want a little more money than originally offered or they would rather see the person declare bankruptcy because they want more investigation.

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If you’re in a situation where you’re unable to pay your debts as they become due, if you’re in a situation where your creditors are calling you and the anxiety of your situation is preventing you from moving forward to realize your goals and dreams, you owe it to yourself, your community, your children, your death estate to take steps now to talk to a Debt Relief Specialist to take steps now and find out about insolvency proposals. Licensed Insolvency Trustees, Bromwich+Smith have debt relief specialists available to offer debt advice and debt restructuring entirely from the comfort of your own home. Now offering video appointments with clients, Bromwich+Smith’s Debt Relief Specialists are available for initial free, no obligation, confidential consultation by phone at 1.855.884.9243, Live Chat  or request a call back at contact us page.