What is Personal Bankruptcy?

Bankruptcy is a legal process for eliminating your debts when they cannot be repaid and involves surrendering any non-exempt assets to the Licensed Insolvency Trustee.

It includes a legal declaration of your inability to pay your debts to your creditors, due to insufficient income or assets to meet your debt obligations.

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If you see no other way out of debt, you can consider personal bankruptcy

Why file for Personal Bankruptcy ?

Bankruptcy can be seen as the last option when you have no other way to pay off your debts. A consumer proposal should be considered before filing for bankruptcy.

Considerations

Your credit will be negatively affected for at least 7 years after completed
All credit cards will be cancelled
Non-exempt assets you own such as car, house and investments may need to be given to Trustee
Required to submit monthly income statements and make monthly payments to Trustee
All collection calls and legal action against you will stop

What debts are included?

Most debts are included except for secured assets which are attached to assets like a vehicle or house

Credit cards
Pay day loans
Personal loans
Lines of credit/overdraft
Tax debts
Co-signed debts
Vehicle loans (if vehicle returned to lender)

Do I qualify for Personal Bankruptcy?

You are at least 18 years old
You are insolvent, which means that you are unable to pay your debts and owe at least $1,000 in unsecured debt
You must either reside in, do business, or have property in Canada
You are not able to file a Consumer Proposal or Division 1 Proposal

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What are my Responsibilities?

Surrender all credit cards and non-exempt assets
Send your monthly proof of income statements to the Trustee every month
Monthly payments to the Trustee, depending on your income
Attend two financial counselling sessions, one-on-one with our financial counsellor

How do I Get Started?

Step 1

Fill out our Form - We will contact you for your free, confidential financial consultation

Step 3

Prepare Documents - We will prepare the documents to submit an offer to your creditors. We may ask you for additional documents, such as proof of income and assets.

Step 2

Attend Consultation - We will review your financial situation and explore all debt relief options

Step 4

Review and Sign Bankruptcy Documents - Once signed in person or video call, we file your bankruptcy and send to your creditors

PERSONAL BANKRUPTCY FAQs

How long will Bankruptcy take to Complete This will depend on your income and whether you have filed a prior bankruptcy. For a first-time bankruptcy it will take from 9 months to 21 months depending on if your monthly income is above a certain amount. For a second or third-time bankruptcy it will take from 24 to 36 months, also depending on your monthly income.

How much does Bankruptcy cost? This will depend on how much your monthly income is as you are expected to pay half your income above the surplus income threshold based on the size of your family to the Trustee. Your payments into bankruptcy may go up or down based on income during the bankruptcy period.

What happens to my assets in Bankruptcy? In bankruptcy, you must surrender assets to the LIT for the general benefit of your creditors. However, there are certain exemptions where you can keep certain assets such as a vehicle, personal belongings, tools of trade, furniture and RRSPs, RESPs and RDSPs (except for contributions in the 12 months prior to filing for bankruptcy)

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