In Canada, bankruptcies can only be filed through Licensed Insolvency Trustees, who are licensed to administer the bankruptcy process. It is not possible or legal to file bankruptcy by yourself.
The first step in the bankruptcy process would be to book a free initial consultation with a trustee. The trustee will review your assets, debts, income and household budget. They will provide you with options to deal with your debt including bankruptcy and other alternatives and give you information on the steps to filing bankruptcy if this is the option you choose.
Upon choosing bankruptcy, you will sign a few forms. The trustee will then file them with the Office of the Superintendent of Bankruptcy whereby you will be immediately protected from your creditors.
What Happens When You File Bankruptcy?
Upon filing a bankruptcy, a stay of proceedings is automatic. This means your unsecured creditors have no legal recourse against you. Your unsecured creditors cannot commence or continue with any legal proceeding, wage garnishment or contact you for payment.
Can I File Bankruptcy?
To file a bankruptcy, an individual must have resided or carried on business in Canada within the last year and must be insolvent. Insolvent means that you owe at least $1,000 and are not able to pay your debts in full as they become due.
How to Claim Bankruptcy
In Canada, bankruptcies can only be filed through a Licensed Insolvency Trustee. There are various steps to filing bankruptcy and the first step would be to book a free initial consultation with a trustee. The trustee will review your financial situation, provide you with information on the options available to you, and help with bankruptcy if this is the process you choose.
When is it Time to File a Bankruptcy?
If you are struggling with debt and can’t afford to pay your creditors back, it may be time to speak with a professional. For instance, when you file bankruptcy, medical bills and other unsecured debts can be eliminated. However, whether you should file bankruptcy in Ontario or whatever province you live in, will depend on your specific financial situation.
A Licensed Insolvency Trustee will assess your situation and provide you with options to help you with dealing with your debt. Doing nothing and continuing to struggle with pay day loans, credit cards, etc. is not the best option. A free initial consultation with a Licensed Insolvency Trustee will provide you with better alternatives and give you some peace of mind.
How to File Bankruptcy Yourself
Filing a bankruptcy is a legal process and cannot be done on your own. Bankruptcy can only be filed by a Licensed Insolvency Trustee under the Bankruptcy and Insolvency Act (BIA).
Can I File Bankruptcy on Student Loans?
While filing a bankruptcy will eliminate most debts, student loans are subject to special treatment under the Bankruptcy and Insolvency Act. If you have been out of school for seven years or more, filing a bankruptcy will eliminate student loan debt. If, however you have attended school in the last seven years, filing a bankruptcy will not automatically discharge the debt. A Licensed Insolvency Trustee can explain all your options for dealing with student debt.
I Have Filed Bankruptcy Before. How to File Bankruptcy Again?
It is possible to file another bankruptcy, but you need to carefully consider the following implications beforehand:
- A second-time bankrupt is eligible for a discharge in 24 months providing there is no surplus income or opposition;
- A second-time bankrupt with surplus income will be eligible for a discharge in 36 months and providing there is no opposition;
- In rare instances, a third-time bankrupt is not eligible for an automatic discharge. The trustee will need to apply to the Court for an application of discharge hearing;
- A second bankruptcy will remain on your credit report for 14 years; and
- Filing another bankruptcy can be very costly when surplus income applies.
If you are considering claiming bankruptcy for a second time, a Licensed Insolvency Trustee will explain the merits and consequences of filing a second or third bankruptcy and provide you with additional information regarding consumer proposals as an alternative to your financial situation.
The Declare Bankruptcy Consequences
Although there are advantages to filing a bankruptcy, there are also negative consequences to filing. When you file a bankruptcy, credit card debt and other unsecured debts are eliminated, but not all debts are dischargeable in a bankruptcy. This includes child support, alimony, fines and some student loans. You will still need to make these payments.
Bankruptcy will also affect which assets you will lose or be able to keep. A lot of people wonder if it’s possible to file bankruptcy but keep their car, and this will depend on your specific situation. There are options available that will help you keep your vehicle, depending on its value. Losing assets is a possible risk when you file a bankruptcy in Ontario or in any other province. The same is true for your home. If you wish to file bankruptcy but keep your house, it will depend on several factors, including how much equity you have in your home. A trustee will give you all this information before you file and ensure that your exempt assets are protected from creditors.
Filing a bankruptcy will also have a negative impact on your credit report for a minimum of 6 years from the date of discharge.
If you are looking for help with bankruptcy or wish to understand more about the process, speak with a trustee.