Personal bankruptcy is a legal process under theBankruptcy & Insolvency Act of Canada.
Where debtors are facing insolvency, bankruptcy gives financial relief by stopping all debt payments, legal collection to collect debts, and garnishments.
You might consider filing for bankruptcy where you’re:
Where you’re unable to pay bills, debts take up a large amount of your pay and you see no way of paying, you should consider speaking to one of our trustees about debt solutions.
Wage Garnishments: How bankruptcy stops wage garnishments
Bankruptcy Advantages: The benefits & disadvantages of bankruptcies
Bankruptcy FAQs: Questions answered about filing for bankruptcy
Bankruptcy law allows for debt relief and financial counseling of a person or business while treating creditors fairly.
Where an individual files for bankruptcy, all unsecured debts including any outstanding credit card debt is eliminated.
You will have to surrender all credit cards to the trustee, which will be canceled.
During the bankruptcy most people will be unable to have or use a credit card, except for prepaid cards.
After the bankruptcy is filed the trustee is responsible to notify all creditors.
Creditors are not allowed to contact you, pursue collections or even accept payments from you after a bankruptcy is filed.
Should you be contacted after the filing, we advise our clients to tell the creditors that you have filed for bankruptcy and give them our name to contact.
The bankruptcy trustee will deal with the creditors advising them of the circumstances and provide them with any documentation.
Payday loans are considered unsecured credit. In Bankruptcy all unsecured debt is eliminated.
There are two types of lines of credit:
In bankruptcy all unsecured debt is eliminated, including unsecured lines of credit.
Where you have debt in a secured line of credit, the debt is secured by some tangible asset, usually a home.
Where there is secured credit, the debt must be paid back, usually by selling the home, or where the security is a car by returning the vehicle.
When a bankruptcy is filed:
Where taxes are owing to the government, the Canada Revenue Agency (CRA) has the authority to:
The CRA can even register a lien against your home for taxes owed.
Unlike other creditors, the CRA many times does not need a court order to seize your property or money.
In Canada a garnishment usually means a wage garnishment.
Garnishments are the legal process to collect money (for a debt or judgement) by a creditor, against a person who owes money.
Where a creditor is trying to take a portion your wages, filing a consumer proposal or filing for bankruptcy stops the garnishment.
You cannot stop a wage garnishment yourself, consumer proposals or filing for bankruptcy must be done through a licensed insolvency trustee.
In bankruptcy, you keep most personal possessions including:
The exceptions and the rules can change within the Execution Act from time to time.
When you file for bankruptcy, the law requires that you surrender all your assets to the trustee.
The trustee sells the assets, and distributes the funds to any creditors.
In bankruptcy you must surrender:
Most people considering bankruptcy have depleted any cash they may have. The effect on cash accounts is minimal and they keep most of their personal belongings.
Considering bankruptcy may leave you feeling overwhelmed, but there are many benefits:
The benefits can be immediate, with long term implications to you and your family. The stress in your life will be reduced as you’re now doing something about your debts and financial issues.
In a personal bankruptcy the trustee looks at all of your assets.
Where you own a home the trustee will consider the value of the property, minus any mortgages or lines of credit owing. If there is equity in the property (value of home – amounts owing = equity), this will be considered an asset.
No Equity in home = no assets. Trustee will not consider in bankruptcy
Equity in home = asset. Trustee must consider in bankruptcy
Where there is equity in the property, this amount of money is considered an asset to be included in bankruptcy.
Many people who have equity in their home will consider a consumer proposal, where no assets are surrendered and they keep their home.
We invite you to call us to discuss your situation to provide you with a more complete answer at 905-721-7506.
Personal bankruptcy is a financial option to most people in Canada.
Certain professionals however should be aware of the rules of their profession to determine the any implications before filing.
Professionals such as Lawyers, Real Estate agents, insurance professionals, and accountants, must notify their licensing body upon filing. A bankruptcy may affect the ability to work or operate.
Many professionals with debt issues maybe better suited to consider a consumer proposals vs bankruptcy. Where you’re a professional we invite you to give us a call, discuss your issues and get professional advice.
Where you are considering bankruptcy you must:
These requirements are called an solvency test. To be eligible for bankruptcy you must be insolvent.
The bankruptcy benefits can be immediate with long term implications to you and your family.
The first benefit to filing for bankruptcy is that the stress in your life will be reduced as your now doing something about your debts, financial issues and:
Bankruptcy in Canada falls under the office of the Superintendent of Bankruptcy.
The office of the Superintendent of Bankruptcy, then authorises Licensed Insolvency Trustees to administer bankruptcies to individuals and businesses.
Where an individual or business wishes to file for bankruptcy, they must do so through a trustee.
The trustee acts on behalf of the government, administering the bankruptcy, dealing with creditors, assets and providing counseling to the bankrupt.
The cost to file for bankruptcy in Ontario for most people is approx $200 per month over 9 months.
Although the cost of bankruptcy of $1800 dollars may seem expensive, all other debts and loans are discharged (dropped). During this time, all bills, unsecured debt, interest charges, collection calls and garnishees will be canceled.
After the bankruptcy is discharged you will have no other payments.
In bankruptcy there are two different costs for everyone;
Some people may incur additional costs in bankruptcy called “Surplus Income Payments”.
As well as the initial cost of the bankruptcy, in bankruptcy the government sets limits on what you can earn. Where the income goes over this amount, the government believes the bankrupt should pay as “surplus payments in bankruptcy”. Surplus payments are based upon how many family members are being supported by your income minus any exemptions.
Where the income goes over the set amount, the Bankruptcy Act requires the bankrupt to make surplus payments of fifty percent (50%) over the base amount. For example, if there are two adults and two children, the family would be allowed to earn 47,976 per year excluding any allowable expenses after taxes and allowable expenses. Surplus income is based upon the whole income for the family.
Read more about bankruptcy costs & surplus payments >
★★★★★ We had one financial set back after another, and the bills were more than I make in years. I needed help and Yanchdey were local to me. I phoned the office and spoke to Kelly who explained everything, it was great to talk to someone who understood what I was going through. We filed the bankruptcy, the collection calls stopped and I can sleep now. Its a process, but I’m happy I did it. Michael Dumas, Oshawa
Where you’ve decided that bankruptcy is right for you, we invite you to phone or visit our office.
Filing for bankruptcy is done through a licensed Insolvency Trustee.
When you contact us you’ll speak to a trustee who will listen to your situation. The trustee explain to you the options that they feel will best help you with your debt including:
Where you and the trustee agree that personal bankruptcy is the best option, the trustee will:
The meeting with the trustee is a free opportunity to discuss your finances. You’ll be able to ask any questions and to learn about the help available for your consumer debt problems.
When you file for personal bankruptcy you give your assets (the things you own) to an insolvency trustee.
The trustee then makes a legal application under the Bankruptcy Act and Insolvency Act and liquidates your property (sells the assets). Any money received is applied towards your debts.
The balance of your debts and credit obligations are then eliminated.
You are required to pay 200 dollars per month for the bankruptcy plus 50% of any surplus income that is assessed to you, and have two sessions for counselling on debt.
At the end of 9 months a bankruptcy discharge is issued and your debts are canceled.
When you file for bankruptcy:
The Bankruptcy and Insolvency Act is set up to allow individuals with no reasonable prospect of getting out of debt to start over with conditions.
Filing for bankruptcy maybe the right choice for you if you answer yes to any of these questions;
If you answered yes to one or more of these situations, you should speak to our insolvency trustees and learn about getting out of debt.
Call us now at 905‑721‑7506 for a free consultation or contact our offices >
If your considering a bankruptcy, let’s have a discussion about your finances first. We can review your debts and maybe offer alternatives such as:
Many times people approach our offices feeling that a bankruptcy is the only option.
After speaking with us they learn that there are alternatives like consumer proposals that are cheaper, less invasive and allows them to keep their assets instead of losing them in bankruptcy.
When you meet or call our offices we can explain all of your options.
We’re here to help, give us a call today at 905‑427‑6647 it’s free to call without obligation.
Read more about alternatives to bankruptcy >
Personal bankruptcy has short term disadvantages, but the long term advantages are life changing.
In bankruptcy you surrender your assets and will have to go without credit. The advantages are,
During the bankruptcy you are also required to receive counselling about your finances.
As many of us received no formal education about money, the opportunity to learn about money management is often a very positive.
After the bankruptcy is discharged (usually in 9 months) you can start building your credit and putting the bankruptcy behind you.
As time goes on, most people feel a dramatic reduction in stress by learning the responsible use of credit and money management.
We offer a free meeting to discuss your finances. We can give you answers about;
As required by the law, the insolvency trustee is there to help you get out of debt and help you manage your finances for the future.
The Canadian government realizes that it is in the public interest and good for society as a whole.
The government believes helping individuals through insolvency trustees is better than to have people and families suffer through continued hardship with financial issues.
Call us today to make an appointment to discuss your financial health.
Personal Bankruptcy
R. Mitchell
6 days ago
★★★★★ Kelly and her staff made the bankruptcy process very easy. It was a relief to my wife and I to have professionals such as these, very supportive. Thanks again
D. Ganguli
2 weeks ago
★★★★★ Some bad financial decisions including being laid off resulted in huge credit card debt and other loans we were never going to be able to pay off. After I finally got fed up with the collection calls and bills my husband and I decided to get some help. We decided on bankruptcy giving up many things we didn’t really need, and the counseling was great for us at our age. It wasn’t easy, but we are much happier and debt free. Thanks Again, would recommend.
Jo-anne Lee
1 month ago
★★★★★ I needed to get out of debt. I still had a student loans of $14,000, credit card debt and had just received a letter of garnishment. A credit counselor recommended I look into filing for bankruptcy. The bankruptcy trustee was easy to speak with and listened to me. Together we discussed the pros and cons and options available. The bankruptcy will pass, but I’m much happier without the burden of debt in my life. I should have gotten the financial counseling years ago.
Christia McIntyre
4 weeks ago
★★★★★ .Professional and friendly, on their advice I did a consumer proposal vs bankruptcy and will be completely out of debt in 2.5 years!! Debt Free! Many thanks
S. Lee
1 month ago
★★★★★ They were completely upfront about what my options were, and gave me a clear cut plan about how I could stop the calls, bill collectors, and credit card bills that just kept getting bigger and bigger. Filing for bankruptcy was not an easy decision but the trustee was there for me all the way. Thanks Again!
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