Edmonton Bankruptcy What Will It Cost
An Edmonton bankruptcy is rarely, if ever, the first choice of residents deep in debt and looking for a way out. People who find themselves facing bills they cannot pay and harassing calls and letters they cannot stop often get on the Internet to get information about debt solutions. There they read again and again that bankruptcy should be their last resort. Is it any wonder then that few residents know that an Edmonton bankruptcy is almost always the most cost effective debt solution available to them?
What it costs to declare bankruptcy depends on your personal financial circumstances. You will find Internet websites that estimate average filing fees, court costs, and trustee commissions averaging between $1,500 and $2,000. However, if you search further you learn that higher income filers can expect to pay considerably more in terms of assets and income they might have to surrender in a personal bankruptcy filing.
In truth, you cannot get an accurate estimate of your personal bankruptcy costs over the Internet, since it all depends on your own circumstances. Bankruptcy trustees like us offer free initial consultations where we can assess your situation and give you an estimate of what your cost in bankruptcy would be. Your income contribution may be subject to monthly variations, which explains why we cannot give a cost figure with 100% accuracy.
Once you declare bankruptcy you will need to report your income monthly. The government has established a threshold living allowance based on family size. If your gross monthly income exceeds the threshold by more than $200, you will have to contribute half of the surplus into the bankruptcy estate created at the time you file.
The bankruptcy estate is an escrow account to hold funds to be distributed amongst your creditors. You probably know each province has exemption allowances for personal assets. If the value of certain of your assets exceeds the allowance, the assets may have to be surrendered with the proceeds of their sale going into the estate.
When you meet with a bankruptcy trustee we can review your asset situation and determine your exposure. Asset loss is one of the main reasons many residents of Edmonton look for alternative solutions to bankruptcy. Yet when you compare the costs, bankruptcy is more cost effective in virtually all cases.
For example, in Alberta the allowance for home equity is $40,000. If you have $70,000 in equity you might look for an alternative to protect your home. However, if your unsecured debt total is substantial, even an alternative solution that reduces it by 50% or more may end up costing you more in dollars and cents. Assuming you could reduce $200,000 to $100,000, would saving your home be worth the $30,000 trade-off?
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