Bankruptcy 101: How to Be Fully Prepared When Filing Bankruptcy in Canada
Filing Bankruptcy in Canada: Understanding the Process
Filing Bankruptcy in Canadais a process that can be confusing for some people. Regardless, from the start to finish, a Licensed Insolvency Trustee (LIT) can guide you through the process. They will make it easier for you to get your life, and your finances, back on track.
If you have weighed all of your options, and decided thatfiling for bankruptcyis the best solution, then the first thing you will need to do is contact a licensed insolvency trustee. The Trustee will be able to help you determine if bankruptcy is in fact your best option. They will also provide you with the knowledge you require in order to make a sound decision.
You can only file an assignment in bankruptcy in Canada through a Licensed Insolvency Trustee (LIT).
What to Expect Before You File For Bankruptcy
It’s hard to know where to start when you have to file for bankruptcy. It’s especially hard if this is your first time .
While your licensed insolvency trustee willguide you through the process, it helps to be aware of what the process entails ahead of time.You won’t necessarily lose everything you own.
However,you may have to make some sacrifices in terms of assets or amountsyou will have to repay throughout the process. You may have to make surplus income payments to the Trustee (depending on income levels) and you may lose certain tax refunds as well as some GST/HST credits.
Going bankrupt will, however,protect you from creditors continuing any actions against you. This could be actions such as garnishing your wages or seizing your property or bank account(s).
Once you have proceeded you won’t be able to reverse filing for bankruptcy without bringing the issue to court and settling before a judge.
How the Bankruptcy Process Works
To file for bankruptcy you are going to be required to execute several documents. One of these documents is theassignment. This implies that you areassigning all of your property to the trusteefor the benefit of your creditors.
All of your property does not include exempt assets. One of the other of many documents is thestatement of affairs, which contains a list of your assets, liabilities, family income and expenses.
This is also referred to as a disclosure. The Trustee will furnish you with copies of these documents. Make sure you keep copies of these papers for your records permanently.
When you start the bankruptcy process, the Trustee will prepare the aforementioned documents. Then they will file them with the Division Office of the Office of the Superintendent of Bankruptcy. Once it’s filed you will officially be bankrupt.
Within 5 days of filing your assignment, your creditors will be notified and most creditors will file a proof of claim stating how much you owe them. In some cases there can be creditor meetings, where you physically sit down with your creditors to discuss the affairs of your bankruptcy.
These meetings are usually not necessary forconsumer bankruptcyunless your asset base is in excess of a certain amount, or if one is requested by the creditors of the Office of the Office of the Superintendent of Bankruptcy.
Being Discharged From Bankruptcy
You may beeligible for a discharge after just 9 months. This happens if you comply with all of your obligations under the bankruptcy administration and as prescribed under the Act.
You could also be eligible if it’s your first time declaring bankruptcy.
If the Trustee, Office of the Office of the Superintendent of Bankruptcy or a creditor opposes or objects to your discharge, you will have to go to court for a discharge hearing.
There are basically four common types of discharge that can result from your discharge hearing. The Court can make an absolute discharge, a conditional discharge, a suspended discharge, or a refused discharge.
An absolute dischargereleases you from your debts completely. A conditional discharge sets certain terms that must be met before you can obtain an absolute discharge.
Usually the terms of conditional order involve amounts you will be required to pay to your estate or duties that must be complete.
A suspended discharge is simply an order that postpones your discharge from bankruptcy to a later (future) date.
Life After Bankruptcy: What Happens Now?
You will also have to attend2 financial counselling sessions. These are intended to help you prepare for the next part of your life. They will also help you learn about budgeting for your future.
They are also a great resource to prevent you from falling back into financial difficulty in the future. Bankruptcy will affect your credit score and remain on your credit bureau forsix years. The upside is that you will get the fresh start you need to carry on with your life and eliminate your stress.
A Licensed Insolvency Trustee Will Help You Prepare for Bankruptcy
Choosing Crawford, Smith & Swallow means you are putting your financial recovery in the hands of professional you can trust. We haveover 70 years of experiencein the Niagara region, helping both consumers and businesses to get back to financial stability.
If you are experiencing financial difficulty, don’t hesitate to book a free consultation with us today. We’ll help you learn more about your options.