Bankruptcy
Bankruptcy is the legal process by which an individual declares themselves or their business incapable of paying outstanding debts. The bankruptcy process is established and regulated by its own specific legislation, which aims to give the bankrupt individual a chance to free themselves from the burden of debt and start anew.
In order to successfully declare bankruptcy in Canada, an individual must have a minimum of $1,000 in debt and prove insolvency, which is the inability to pay off their debts as they become due. First-time bankruptcy in Canada requires a nine-month period of credit counselling, budgeting, monthly payments and other related follow-up. The cost of filing for bankruptcy varies based on the filer’s assets and income. In cases where the person filing for bankruptcy has no surplus income to pay creditors, they will still be required to pay the trustee a nominal monthly fee of less than $200 over the nine-month period to administrate the bankruptcy.
Spotlight on Bankruptcy
Bankruptcy Canada Answers Filers’ Questions
If you find yourself with more questions than answers about personal bankruptcy in Canada, one of the best resources you can turn to is the Bankruptcy Canada website, where you will find a breakdown of bankruptcy law, new bankruptcy requirements and details of the overall process in a simple onli... Continue Reading »
Before Filing for Bankruptcy
Many people feel overwhelmed with debt and do not think there is any other way to eliminate the bills except to file for bankruptcy. Before filing for bankruptcy, there are steps you can take to help lo...
Bankruptcy Canada Answers Filers’ Questions
If you find yourself with more questions than answers about personal bankruptcy in Canada, one of the best resources you can turn to is the Bankruptcy Canada website, where you will find a breakdown of ...
How Bankruptcy Affects Your Student Loans
Many people have attended college at some point and owe on student loans. Canadians have a large set of rules that help them when it comes to filing bankruptcy and managing old student loans. These rule...
About Bankruptcy
An individual can go into bankruptcy in the following two ways. First is the common way of making an assignment in bankruptcy, which means voluntarily going into bankruptcy. The second is rarely used and involves creditors petitioning the bankruptcy court to make an Order that the individual is bankrupt. Filing bankruptcy automatically means that your creditors must cease harassing you for any debts owed. This is because all actions against you must stop once you file these documents. However, this does not exempt secured creditors such as banks which hold say a lien on your car, from claiming their debts.
During bankruptcy, a trustee is appointed to administer proposals and bankruptcies, as well as manage assets held in trust. In the event that the trustee believes that the individual requires the protection of independent legal advice, they may refer them to an insolvency attorney. During bankruptcy, the bankrupt individual must keep their trustee informed at all times as to their place of residence, as well as respond to any requests for assistance or information made by the trustee. Information requested may include reports detailing their earnings and living expenses, as well as any changes in the bankruptís family situation.
Under Canadian bankruptcy law, most debts will be erased by your discharge. However, debts that will not be erased include fines which are imposed by a court of law, money owed for stolen property, goods obtained through misrepresentation, alimony or maintenance payments, damages awarded by a court for the intentional infliction of bodily harm or sexual assault, as well as student loans in the event that the bankruptcy is filed prior to or within seven years after the end of the studies.