Everyone knows what bankruptcy is, but not how it works. Here are some myths cleared up.

• Very few people who file bankruptcy in Canada actually lose their homes. Typically the person filing for bankruptcy makes a settlement on the interest remaining on the property.
• Personal possessions, such as furniture and household goods, are exempt in bankruptcy. This excludes items of extraordinary value such as fine art. 
• You may exempt one car with a net value of $6,600 or less during your bankruptcy. This includes financed or leased vehicles provided you maintain the normal payments.
• You will not lose your job for filing for bankruptcy. It is illegal for an employer to terminate employment for bankruptcy. It is likely your employer wouldn’t even know you filed for bankruptcy unless your wages were garnished.

For more information on bankruptcy myths, click here.