Bankruptcy Alternatives
Information if you have no bankruptcy alternatives: filing personal bankruptcy

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When all else fails: Personal Bankruptcy


This website is called for one simple reason: we want you to research and understand all of your bankruptcy alternatives.

That's why we encourage you to explore all possible bankruptcy alternatives, including using a budget to repay your debts on your own, debt consolidation, credit counseling, Chapter 13 Wage Earner Plans, and consumer proposals. It is only if all of these options fail that you should consider personal bankruptcy.

What is personal bankruptcy?

Personal bankruptcy is a legal process where you surrender some of your assets, and in return your debts are discharged (which means written off or forgiven).

In the United States you can file personal bankruptcy on your own, or with the assistance of a bankruptcy attorney. Personal bankruptcy is also known as Chapter 7 personal bankruptcy. In Canada, personal bankruptcy is filed through a licensed trustee in bankruptcy. (Click on the links in the More Resources section on the left hand side of this page for more information).

What are the advantages and disadvantages of personal bankruptcy?

The most obvious advantage of filing personal bankruptcy is that most your debts are discharged, meaning you no longer have to pay them. The disadvantages of filing personal bankruptcy include:

You may lose your assets - you can keep your basic goods, such as your clothing, but in most places in the United States and Canada you will lose a valuable car or house if you go bankrupt.

Your credit rating will suffer - when you file personal bankruptcy a note will appear on your credit report for up to ten years depending on where you live. This will make it harder to borrow in the future. Lenders will require a higher down payment or security deposit, and they may charge you a higher rate of interest.

Filing personal bankruptcy should be treated as a last resort, and only used if all other options are not successful. is a free resource
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