Financial advisors can also help you understand the impact of bankruptcy and debt contracts. What is important is that there is no risk, that you will not be able to make your refunds and go back to where you started. If you are bankrupt, you will not have to pay most of the debt you owe. Collection companies stop contacting you. But this can greatly affect your chances of borrowing money in the future. Debt contracts are a formal alternative to bankruptcy under the Bankruptcy Act for insolvent individuals (unable to pay their debts when they mature). As part of a debt agreement, your unsecured creditors agree to accept less than the total amount of debts due in return for a commitment you made to make regular repayments for an agreed period. As of June 27, 2019, debt contracts are limited to a maximum of 3 years or 5 years during which you own or pay your home. Sometimes the person who promotes the debt contract is not a debtor, but another person who acts as a broker. This person usually receives a fee from you or some of what you pay to the administrator of the debtor agreement. Be especially careful with these people as they are not regulated by AFSA.

If you look at your employment contract, you can inform your union representative or staff department (HR) of whether reducing debt payments or seizing a debt solution can affect your job. Your human resources department should keep your request confidential so you can know where you were without affecting your work. Before you opt for a bankruptcy application or a debt contract, talk to a financial advisor. Bankruptcy is the formal process that they are declared unable to pay your debts. If you are independent, you can usually continue to act while you are in an IVA. Autonomous IVAs allow you to keep control of your corporate finances while recovering your debts – a factor that has made it a preferred option compared to bankruptcy. PayPlan will not contact your current employer to inform them of your IVA. The employer will just determine if he is making financial cheques that you need to approve, or by searching the public bankruptcy registry.

However, it is not common for current employers to check the bankruptcy registry, so you don`t have to worry too much about it. This is only a short guide and it is recommended that you consult a financial advisor to discuss the best option for you in your circumstances. See fact sheet: Broker for debt agreements and fact sheet: Get help for a list of additional resources. When it comes to the solutions we propose, the one that could potentially have an impact on a person`s work is bankruptcy.