A lot of us are familiar with the term “bankruptcy” but don’t fully understand how bankruptcy works and what the long-term implications are.
Our intention is to help you know the bankruptcy process in Canada.
What is Bankruptcy?
Simply put bankruptcy is a legal resolution for debts. It falls under the bankruptcy and insolvency act and only becomes an option where a person cannot pay the debts.
As a Canadian make sure you keep away from American bankruptcy terms like chapter 7, 11, and 13 when looking for bankruptcy information.
What Are the Steps Involved in Declaring Bankruptcy?
Get a licensed insolvency or bankruptcy trustee in Ontario. Don’t do it alone. There are processes they will follow.
Filing for Bankruptcy
The paper work is prepared by your trustee based on the information you give him. Some of the information are: assets, income, debts etc. Then he will file it with the Superintendent of Bankruptcy.
If the Superintendent accepts your bankruptcy application your creditors will stop pursuing you for their money, no legal action can be taken against you and they can’t garnish your wages.
What Happens to Your Debts and Assets When You Go Bankrupt?
This depends on your province. There are exempt assets you’re allowed to keep when you go bankrupt. If you have more than the exempt amount, assets will be sold to pay your debts. You should also know that some unsecured debts cannot be included in the bankruptcy. Some of these are family support payments, student loans newer than seven years, and other court fines.
Obtaining Discharge and Getting Back on Track
You should keep in contact with your trustee throughout the process to obtain your discharge. The burden of collection calls and steep minimum payments on your credit cards may be over but you now have other responsibilities.
If you need help with your bankruptcy process we are glad to help. Just contact us now. We also help in credit counselling in Ontario.