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Filing for bankruptcy in Canada
How does filing bankruptcy work? What is involved in the personal bankruptcy process in Canada? The basic steps of the bankruptcy process begin as follows:
How does a person go into bankruptcy?
There are two ways a person can go into bankruptcy.
- The person makes an assignment in bankruptcy, i.e. voluntarily goes into bankruptcy.
- Creditors ask the Court to make an Order that the person is bankrupt (rarely used).
In both these cases a Trustee in Bankruptcy is required to administer the bankruptcy.
How do I claim bankruptcy?
- First, you must recognize that you are having financial problems, and you don’t believe you can work them out on your own.
- You contact a licensed trustee to review your situation. Your situation is assessed briefly by phone, and you are given an initial, no-charge appointment. You will be asked to bring some specific details of your financial situation, including your income and expenses, assets and debts.
- At your first meeting, a professional will review your financial details, and outline the alternatives to bankruptcy that could be chosen in your case, including the bankruptcy process. You will then be given as much information and time as you need, to make the decision whether to go bankrupt or choose another solution.
- Once you understand your options, you will decide whether or not to file for personal bankruptcy. The decision is up to you, but your trustee will provide advice as needed. If you decide to go bankrupt, your trustee will give you an information form to complete. The trustee needs your personal information (name, address, birth date), a list of your creditors (who you owe money to), and a list of your assets (what you own).
- Once your application form is completed, the trustee will prepare the initial bankruptcy paperwork.
- At a second appointment, you will review the paperwork and the bankruptcy process with the trustee. When you are ready, you sign the papers and your bankruptcy starts.
Who Will Know?
In most cases, only your creditors will know you have filed for bankruptcy. Other people could find out from the public bankruptcy records, but they rarely do.
What happens next?
During your bankruptcy, you and your bankruptcy trustee each have some duties and responsibilities to fulfill. How long you will be bankrupt will depend on various factors, but it will be at least nine months. If you are now ready to file for bankruptcy, or need advice on the best solution to your money problems, contact us today.