there’s a cost for filing bankruptcy?
We live in Ontario, my brother is only 20 years old and he has managed to get himself approximatly 15,000 dollars in credit card debt. I was under the impression that filing bankruptcy was a process undergone that doesnt require any payments, however an R9 on your credit report for 7 years. Is this not the case?
The impact on credit is definitely one of the ramifications, but there is a cost to file a bankruptcy in Canada This cost depends on a number of factors.
First, you will be required you to make a minimum contribution each month for as long as you are bankrupt; the minimum bankruptcy period is nine months.
Second, you are required to make an additional payment based on your take home pay each month, and the size of your family. The more you earn, the more you are required to pay each month. You will be required to send the trustee copies of your pay stubs and other income each month, and each month the trustee would calculate the surplus income payment.
Third, you would lose any tax refunds or GST credits you are otherwise eligible for during the bankruptcy period.
Fourth, you lose certain assets (certain RRSPs, valuable cars. etc) that you own when you go bankrupt.
As you can see, the cost of a bankruptcy depends on a number of factors. To get an idea of what you can expect your brother would pay if he were to file a bankruptcy you should contact licensed trustee in your area and he will be able to examine things and provide you an with an expectation of what would be required.