Exempt Assets under Bankruptcy & Insolvency Act: Good Credit versus Bad Debts
A former colleague of mine used to send out letters to consumers with two specially packaged Tylenol attached, along with a brief message that said, “Taking these two tablets will make your headache disappear, but it will not provide permanent relief.”
If debt were a brand today, it would find itself in the same place as Tylenol – associated with lethal toxicity over prolonged use yet without a corresponding loss in the value of the brand. Debt, any way we look at it, is inevitably a one-way trip to some form of bondage. And unless we do something about debts, it causes headaches and associated stress.
The stark reality is that a zero-debt existence is impossible for most people, anywhere. Many Canadians are in a sense, insolvent, meaning that their liabilities (debts) exceed the value of their assets. This does not necessarily mean all insolvent people are bankrupt. To file for bankruptcy you must you owe at the least $1,000 in debts, have more liabilities (debts) than assets and cannot maintain payments on the debt as it falls due. Only when an insolvent person makes a voluntary Assignment in Bankruptcy can he or she be said to be bankrupt.