Filing for Bankruptcy in Ontario
If you are having debt issues and unable to pay your bills as they become due, filing for bankruptcy may be an option for you. Bankruptcy is a legal process that allows those who cannot pay their unsecured debts to eliminate those debts and receive a fresh start and an opportunity to rebuild their financial lives. If you are wondering how to file for bankruptcy in Ontario, you will want to speak with a licensed trustee in bankruptcy.
A Licensed Insolvency Trustee (also known as a Bankruptcy Trustee) is an individual who has been registered and licensed by the federal government to review financial situations and administer bankruptcies and consumer proposals. Filing for bankruptcy must be done through an Insolvency Trustee.
Insolvency Trustees receive years of training and are bound by a strict code of ethics. Therefore, not only are they are experienced and knowledgeable on the different financial options that are available, but they are required to explain all options to you after reviewing your situation. This means that, when you meet with a trustee, you won’t just be given information on the services they provide. Instead, you will be provided with details on all available options that can help you improve your financial life.
Options Other Than Bankruptcy
For most people, there are other possible options other than filing for bankruptcy in Ontario. In the majority of cases, bankruptcy is considered as a “last resort,” after all other options have been considered.
You will find out information on the options available to you in the initial consultation with the trustee. This consultation is typically offered at no charge. During this consultation, the trustee will examine your situation and inform you of the possible options. These options may include:
- Credit counselling
- Debt settlement
- Debt consolidation
- Consumer proposal
Each of these options has its own advantages and disadvantages and not all possibilities will apply to every individual situation. Each financial situation is unique. Your trustee will let you know which options could work for you so that you can make an informed decision regarding your financial future.
Information on How to File for Bankruptcy in Ontario
If bankruptcy is an option for you and one that you decide to proceed with, your trustee will assist you in completing all of the necessary forms and submitting them as required. This can be done electronically.
Once you file, your debt is frozen. This means that no additional interest will be charged. In addition, all communication with your unsecured creditors from this point is done through your trustee. Your creditors are not able to contact you directly or take any steps to collect their debts. They cannot send collection agencies after you and all debt collection from unsecured creditors calls will stop. Any legal action that your unsecured creditors have taken against you as well as any wage garnishments that are in place will also stop with some exceptions like child support payments. This is a big relief to many people as collection calls, legal action and wage garnishment can be very stressful.
Your Duties During Bankruptcy
There are certain duties that you will be expected to complete during the bankruptcy process. One of these duties is to provide your trustee with detailed information on your income and expenses each month. This information will be used to determine the cost of your bankruptcy as well as how long the bankruptcy process will be. The government of Canada sets limits for how much the average family of specific sizes needs in order to live. Your trustee will look at your family size and your income each month. If your income is greater than the amount listed by the federal government for your family size, you may be required to make surplus income payments.
You will also be required to attend two financial counselling sessions as a part of your bankruptcy. These sessions will give you important information on budgeting, money management and other tips that will help you rebuild your financial situation. Each session is typically between 30-60 minutes long.
You will also be required to provide your trustee with updated contact information. If you move, change jobs or get a new phone number, your trustee must be provided with this information.
The process of how to file for bankruptcy in Ontario can seem complicated and confusing, but that does not have to be the case. By working with a licensed trustee, you can learn more about the process and you can use this information to determine if this is how you would like to proceed.