Killen Landau & Associates Ltd, with over 22 years experience in this industry, understands the difficulties that honest people can sometimes find themselves in. For more information on their services, visit http://killenlandau.ca/. They are located at 2060 Lawrence Avenue East Scarborough, ON M1R 2Z5‎ (416) 285-9511.

1. What Are the Primary Causes of
Bankruptcy?

2. Bankruptcy is a touchy subject for anyone who has had to file in
the past, or is looking at that option in the present. While it really
isn’t the end of the world, it’s definitely something you should try to
avoid if possible.
Of course, bankruptcy doesn’t just happen for no reason. There
are some common causes that result in bankruptcy being the only
logical way out.

3. What Is Bankruptcy?
Bankruptcy refers to a formal legal process where people are able
to find relief from their debts and start over again. It includes filing
legal papers with the help of a bankruptcy trustee, and you are
eligible for discharge after nine months.
Bankruptcy erases unsecured debts such as credit cards, personal
loans and credit lines, but not secured debt such as car loans or
mortgages.

4. Basic Bankruptcy Process
If you feel that you are a candidate or have no option but to file for
bankruptcy, the process begins with an initial assessment from a
bankruptcy trustee.
Sometimes, the trustee will advise that bankruptcy is not the only
option, and that a different course of action may be more
appropriate. If it is decided that bankruptcy is a good option, you
must tell your trustee:
• How much you owe and to whom
• How many assets you have and their value

5. Process cont…
• How many assets you disposed of in the past year
• How much you earn
You must also:
• Hand over credit cards
• Place your assets in the trustee’s control
• Attend all required meetings or counseling sessions
• Make any payments to the trustee during bankruptcy

6. The Results
The results of filing for bankruptcy are typically a mix of good and
bad.
• Creditors can’t contact you anymore
• No one can sue or garnish your wages
• Credit bureau will report the bankruptcy for 7 years
• Can often keep your house or car if you continue making
payments
• Your spouse should not be affected
• Employers aren’t notified
• Co-signers are not relieved of their obligations

7. Primary Causes of Bankruptcy
Bankruptcy may have any number of root causes depending on
each individual case, but there are some main issues that come
are behind it that keep coming up over and over.
In Canada, the top three causes of bankruptcy include:
• Job Loss - when you are employed and things look bright, it’s
easy to take on more debt than you really should. However, if
something happens to remove that income from the equation,
financial disaster might be soon to follow.

8. More Causes
•Separation or Divorce - In Canada, almost one-third of all the
people who file for bankruptcy are either separated or divorced
when filing.
The financial burden that follows a separation or divorce is often
too much for just one income. In most cases, the bulk of monthly
bills are doubled as each person finds their own place, yet the
overall income is the same.

9. Causes cont…
•Illness and other Medical Problems - even though primary medical
care is taken care of in Canada, being sick or incapacitated for any
length of time still makes it difficult or impossible to earn money.
For anyone without sufficient insurance or employee benefits, the
bills can add up in a hurry,and sometimes the only logical solution
is to file for bankruptcy.

10. Leading Cause in America
In the United States, where medical expenses are not covered in
the same way, they are the leading cause of bankruptcy filing.
According to Clear Bankruptcy, the burden of medical expenses
accounts for 42 percent of bankruptcies in the United States, with
job loss and poor spending habits coming in second and third.

11. References
• Killen Landau & Associates Ltd, with over 22 years experience
in this industry, understands the difficulties that honest people
can sometimes find themselves in. For more information on their
services, visit http://killenlandau.ca/. They are located at 2060
Lawrence Avenue East Scarborough, ON M1R 2Z5‎ (416) 285‎-
95‎11.