What is Bankruptcy?
A Bankruptcy is another debt relief option that can help individuals deal with their financial problems. If the value of your debts
exceeds the value of your assets, then Bankruptcy could be the best way to effectively eliminate your debt.
Am I eligible to file a bankruptcy?
If you owe at least $1,000 and are struggling to maintain your monthly expenses you could be eligible to file a bankruptcy.
What happens to my house, vehicle, RRSPs, RESPs ?
Once you file for bankruptcy, your assets are put in the hands of your Licensed Insolvency Trustee. While certain assets are protected by law there are some assets that may need to be surrendered or repurchased. In most cases we are able to work with you so that you can maintain the assets that are important to you and your family.
How will it help me?
Once you file for bankruptcy all interest charges, collection calls, wage garnishments and any legal action will stop. Since a Licensed Insolvency Trustee will act on your behalf, you do not need to contact or deal with your unsecured creditors directly.
Are all my debts eliminated when I file?
In most cases all unsecured debt will be eliminated by a bankruptcy, including Canada Revenue Agency debt. However, there are various debts that would not be eliminated and you would be responsible to maintain the payments. These debts would normally be any fine, penalty or restitution order made by the court, parking or speeding tickets, spousal or child support, any award for damages in respect of an assault, and student loans that are less than seven years old since your last study date.
What are my duties when filing a bankruptcy?
- Attend two mandatory counselling sessions within the required time frame;
- Provide monthly income and expense statements, this will allow the Licensed Insolvency Trustee to determine if you are required to pay any surplus income;
- Provide income tax information for the year in which you filed the bankruptcy;
- Keep your Licensed Insolvency Trustee informed of your current address and other contact information.
How long will I be in the bankruptcy process?
The length of time is determined based on whether this is your first or second bankruptcy and whether you are required to make monthly surplus income payments. The surplus income payment is an amount paid monthly into a bankruptcy and is based upon your income and personal family situation. The amount is calculated according to a government index/threshold.
- For a first time bankrupt with low income (no surplus) the length of bankruptcy would be 9 months;
- For a first time bankrupt with high income (with surplus) the length of bankruptcy would be 21 months;
- For a second time bankrupt with low income (no surplus) the length of bankruptcy would be 24 months;
- For a second time bankrupt with high income (with surplus) the length of bankruptcy would be 36 months.
What will happen to my credit rating?
For a first time bankrupt, the bankruptcy will be on your credit report for seven years after your discharge. For a second time bankrupt, the bankruptcy will be on your credit report for fourteen years after your discharge. Even though it is on your credit report, our qualified counsellors will discuss with you the necessary steps to take in order for you to rebuild your credit history.
The bankruptcy ends (you receive a discharge) once the time frame has lapsed and you have completed your required duties. Once discharged, you will be released from the legal obligation to repay the debts that were included in the bankruptcy.
How do I get started?
Contact us to book an initial meeting to review your monthly income and expenses, your debt load and your assets. We will explain all of your duties and responsibilities. We are here for you throughout the entire process.
We pride ourselves in being committed to making sure that each individual client understands the bankruptcy process. We want you to ask all the questions that are concerning you.
Paving the Road to Debt Freedom
Reduce Your Debt
A consumer proposal is a debt relief option which allows individual to consolidate their debts into one monthly interest free payment. It is a legal binding process between you and your creditors to repay a portion of what is owed. A Licensed Insolvency Trustee will negotiate with the creditors on your behalf to reduce the amount of debt owed. The amount of debt to be repaid is based on your income, assets and total debt load.
Restructure Your Debts
The debt consolidation loan option allows you to combine your debts into one loan with a lower interest rate. This option is available through a bank or a financial institution. In this option you would pay off the amount owing to your creditors in full while getting a new single monthly loan payment. Debt consolidation however will only reduce your interest payment and your overall amount owing is not reduced or eliminated.
Eliminate Your Debt
A Bankruptcy is a legal process that can be filed through a Licensed Insolvency Trustee. It is another debt relief option that can help individuals deal with their financial problems. In general, if you debt load is very high, your income is limited and you have no assets or minimal assets, then the bankruptcy option is likely the best course of action to follow.
Credit counselling is an option where you would be able to meet with one of our certified credit counsellors to discuss your fixed living expenses and required monthly bill payments. We would discuss strategies and techniques to help you better manage your monthly financial plan. This option does not reduce or eliminate your debt.
A corporation becomes insolvent when it’s unable to pay its debts; these can include suppliers, financial institutions, lease payments. The corporation can file for bankruptcy or make a proposal to its creditors. The business may continue, be sold, or sometimes would have to be closed. A Licensed Insolvency Trustee can evaluate what is the best way to take care of the business debts as often they are personally guaranteed.
Over 10,000 Clients Helped