How to Apply For Bankruptcy: Five (5) Basic Steps

Applying for bankruptcy and knowing when to apply are two different things. Well, you could add knowing where to apply to the list as well.

Despite what you may have heard, filing for bankruptcy is not a tedious task as long as you’re at the right place and speaking to the right people. This would help you arrive at better and safer decisions as well as give you the proper information you need and deserve.

We have mapped out five basic steps to be followed when embarking on this journey and they are as follows:

  1. Make an Analysis of Your Debt:

This is actually the first item on the list because it’s very crucial in determining whether or not to apply for bankruptcy. Sometimes you may feel you’re so much in debt and the very next thing to do is make the application.

Well, some of those times, that may not be the right answer.  For you to make a bankruptcy application, you must be sure your personally owned assets, when sold, are not able to clear your debts. This analysis will go a long way to knowing what the next step is to take. 

  1. Ensure You Are Eligible For It:

After the first stage, the next step is for you to confirm whether you have Surplus Income.  The Canadian government issues a chart that sets the maximum amount you can earn before half of your income goes to creditors.  The LIT can review your income to see if you have to make payments if you file bankruptcy.  If you do, it might make more sense to file a Consumer Proposal.

But if not, then bankruptcy can be very helpful. 

  1. Get the Bankruptcy Forms And Fill Them Out:

This is the part where the documentation begins. Here, you would need to meet with the LIT and fill out  some forms.  These forms would contain details of your debts, your assets, your income, and your expenses.  You would also need to answer some simple questions about any sales and transfers of assets.

  1. Submit Your Documents:

This is where the workload eases on you. From here on in, the Licensed Insolvency Trustee will take care of the following steps needed.  Once the application is complete, and you have signed your forms, you may be expected to submit documents such as your profit and loss statements from a business, a copy of your recent tax returns, possibly a recent bank statement, and also a recent pay stub.

  1. 5. Undergo A Course On Credit Counselling:

It is highly recommended, and also a requirement by the Canadian Government,  that anyone who files for bankruptcy must take a course with the LIT about how to be a strong budgeter and how to fix your credit rating as soon as possible.  The LIT will arrange for an appointment at his/her office to review income and expenses and other valuable tools to avoid needing help with debt in the future.

If you would like to get more information or you have further questions you would like to ask, then we are a Licensed Insolvency Trustee that you can trust. We are Reynolds and Associates Inc. and we are committed to providing you the best, most accurate and informative consultation in and around Ontario.

You can reach us through the following numbers in Ontario:

Sudbury: 705-560-HELP (4357)

North Bay: 705-495-HELP (4357)

Espanola: 705-869-HELP (4357)

Sault Ste. Marie: 705-759-HELP (4357)

 

Or via our email address:

Email: [email protected]