Will the cost of being bankrupt be more than I can pay?
The answer depends on how much you own and earn, and your family size.
How much you own
You will lose all your money and possessions, except for the assets that are exempt in your province. For the assets you can keep, see bankruptcy exemptions.
How much you earn and your family size
You will lose part of any earnings which are considered “surplus income” – that is, anything over a limit set by law. The limit depends on your earnings level and your family size, according to a complex formula. When you see your trustee, bring your latest pay stubs, to allow the trustee to estimate how much you must pay based on surplus income.
Costs of the bankruptcy process
Bankruptcy involves administrative costs, including court fees, mailing costs, and government-set fees for filing. You will probably be required by your trustee to pay these costs.
Taxes work differently in a bankruptcy, and your trustee will give you any details that apply to you. For example, any GST credits or tax refunds that would normally come to you while bankrupt will be lost to your bankrupt estate.
You will also lose any “windfalls” you receive or become entitled to while bankrupt. “Windfalls” are amounts you get by luck, such as inheritance or lottery winnings.
Cost of bankruptcy in your case
More than you can pay? You will need a bankruptcy trustee to determine exactly how much it will cost you to go bankrupt in Canada and what alternatives to bankruptcy would make sense in your case. Contact a Canada bankruptcy trustee today.