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How To Claim Bankruptcies In Canada

Which Types Of Debt Are Not Subject To The Statute Of Limitations


Under the Ontario Limitations Act, the statute of limitations on most debts expires after two years from the date the account originally became delinquent. However, some amounts you owe are not subject to the statute of limitations, including:

  • Government-guaranteed student loans
  • Taxes
  • Court-ordered debts, such as child support and fines

Its important to note that you cannot discharge some of these debts during bankruptcy. For example, court-ordered obligations are not typically eligible for discharge. You can discharge tax debt unless the Canada Revenue Agency placed a lien on your property. Finally, you can only discharge student loans if more than seven years have passed since you were a student.

How Much Does It Cost To File For Bankruptcy

Initially, there is no upfront cost in filing for bankruptcy. Your initial consultation with a Licensed Insolvency Trustee is free. The Trustee will evaluate your finances and make a recommendation on filing a consumer proposal or bankruptcy free of charge.

If you decide to proceed and file based on the Trustees recommendation, then you will begin to incur costs.

Special Situations Of Personal Bankruptcy

Situations That Affect if You Qualify or The Filing Process Your ability to file for bankruptcy, the cost of the bankruptcy, and the length of time you will be bankrupt, depends largely on your personal circumstances. There are some special situations that should be considered when filing for bankruptcy or debt consolidation in Canada. Separated

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What Is The Cost Of Bankruptcy In Canada

As you consider various debt relief options available to you, its important to factor in the cost associated with each of them. For example, it can be easy to think that there would be no cost to filing for personal bankruptcy because its designed to release you from your financial obligations. Why would you be required to pay for a solution that youre using because you cant afford to pay your bills?

In reality, there is a range of costs associated with going bankrupt. Its critical to understand the total cost of bankruptcy before you decide to file.

Can I Get A Credit Card If I Declare Bankruptcy In Canada

What You Keep Or Lose In Bankruptcy in Canada: Infographic ...

No. Once you file for bankruptcy, you must hand over your credit cards to your trustee so they can be cancelled. Additionally, your credit rating will be negatively affected by your bankruptcy and Canadian credit bureaus will keep a note about your bankruptcy on your credit report for up to 7 years, depending on your province.

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What Happens After You File For Bankruptcy

Your bankruptcy is complete when you receive your Notice of Discharge from your Trustee. At that point, you will be free of the unsecured debts that were included in your bankruptcy. You can begin to rebuild your credit.

A notation about your bankruptcy will remain on your credit bureau report after the date of discharge. This is usually removed automatically after six years. Even while the bankruptcy is still noted on your report, you may be able to get credit from certain lenders. You can help this along by taking active steps to rebuild your credit. Your Trustee can give you advice on getting a new start.

Dont waste any more time. Contact a Licensed Trustee near you. We have trustees everywhere from Toronto to Ottawa and everywhere in between. Get the help you need today!

Every Situation Is Different

Bankruptcy is sometimes referred to as an insolvency solution. Insolvency is defined as the inability to pay your bills as they become due, because of lack of funds. There are many insolvency solutions in Canada, including bankruptcy, consumer proposal, and .

As an example, a person with a high income may be able to service $100,000 in debts without any problems. Their income is preventing them from becoming insolvent, despite the high payments they must make on their debts.

Another person, this one with a lower income and higher expenses, perhaps due to a larger family, may have great difficulty servicing a mere $10,000 in debts. The bills are comparatively small, but they are piling up unpaid, and creditors may be calling.

This second individual, with the lower debts, may be a candidate for bankruptcy and the protection it offers, while the person with higher debts may be able to service them on their own.

So, the qualification for bankruptcy depends on a lot more than the mere amount of debt.

Conversely, even if the amount you owe is equal or greater than the minimum amount of debt required by the law for filing bankruptcy in Canada, and you are having difficulty paying your bills, that does not necessarily mean that you are facing bankruptcy.

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Discharge Of Your Debts

Your trustee will guide you through the process until the discharge of your debts, which will occur automatically or following a court judgment.

If this is your first bankruptcy and it has not been opposed, your debts will be discharged 9 months after the start of the process .

This step marks the end of the bankruptcy process.

How Much Will It Cost Me To Declare Bankruptcy In Canada

Claim Bankruptcy = No More Mortgage Canada


Debt is something that most people will encounter and have to deal with at some point in their lives. Whether you are getting student loans for university, need a car loan for a new vehicle, or need to secure a mortgage to get your first home, having debt is inevitable.

Most of the time, having debt is no big deal as long as you are aware of the cost, can handle the debt, and make timely payments. However, there are times where debt can get the better of us and we find ourselves drowning in it. In some extreme cases, debt coupled with various financial issues might be too difficult to handle alone and you might need to look for assistance.

There are many different types of debt relief options available, each with its own benefits and drawbacks. But, sometimes, if your situation calls for it, filing for bankruptcy is the best option for you, so it is important you are aware of how it works.

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Proof Of Claim Bankruptcy Canada: Are Claims Being Made Against You Or Your Company

Are you or your company experiencing financial difficulties? If yes, call the Ira Smith Team. Our approach for each file is to create an end result where Starting Over, Starting Now takes place. This starts the minute you are in the door.

The earlier you contact us, the more options we will have to implement. Whether it is a corporate restructuring or personal debt settlement through a consumer proposal, the goal is to avoid bankruptcy. However, if bankruptcy turns out to be the best option, we can assist there too.

Youre simply one phone call away from taking the necessary steps to get back to leading a healthy, balanced hassle-free life, recover your money and move on to the next investment opportunity.

Requirements For Personal Bankruptcy

To go bankrupt, a person must be insolvent. This means that the person is in this situation:

  • has $1,000 or more of debts
  • lives or owns property in Canada
  • not already bankrupt
  • is in one of these situations:
  • be unable, for one reason or another, to pay his debts as they become dueOR
  • have stopped paying debts or monthly bills OR
  • value of all his property is less than the value of all his debts

If youre in this situation, you can make an appointment to see a trustee in bankruptcy to find out whether bankruptcy is the right solution for you.

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How Funds Are Recovered And Distributed

To help creditors recover some of what they are owed, non-exempt property owned by the bankrupt as of the date of the bankruptcy, or acquired prior to the bankruptcy discharge, may be seized and sold by the LIT. Exempt property includes property protected by applicable provincial and federal laws , property held by the bankrupt in trust for another and, in some cases, goods and services tax payments.

In addition, the LIT determines the bankrupt’s “surplus” income, i.e., the amount beyond what the bankrupt requires to maintain a reasonable standard of living. The bankrupt must pay this amount to the estate for distribution to the creditors after the costs of administration are deducted.

After the LIT has sold all of the bankrupt’s property, he or she must prepare a final statement of receipts and disbursements and a dividend sheet. The dividend sheet contains a list of creditors who will receive dividends and the amount to which they are entitled. You will be paid the dividends to which you are entitled before the bankruptcy file is closed, which is before the discharge of the LIT.

Once the secured claims have been settled, the dividends are distributed in the order set out in section 136 of the

These prior claims are subject to certain conditions and this list is not exhaustive.

The law gives priority to the claims of preferred creditors over those of other unsecured creditors.

Understanding Surplus Income In Bankruptcy

How to Claim Bankruptcy and Keep Your Car

Surplus income is any income you make over the amount that the Canadian Government claims an individual or family needs to live. According to the Office of the Superintendent of Bankruptcy Canada , the current income standards in 2021 are:

  • $2,248 for a single-person household
  • $2,799 for a two-person household
  • $3,441 for a three-person household
  • $4,178 for a four-person household
  • $4,739 for a five-person household
  • $5,345 for a six-person household
  • $5,950 for a seven-person or more household

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Will My Canadian Student Loans Go Away If I Declare Bankruptcy

If you were a student, either part-time or full-time, less than seven years from the date that you declared bankruptcy, you will have to repay your student loan debt, including the interest charges. Check with Canada Student Loans to learn what they consider to be the last official date you were in school.

If your official last day is under seven years ago, you may still be able to get your student loan debts discharged. You can retain a lawyer and make an application to the court.

You must meet the following requirements:

  • You have been out of school for a minimum of five years
  • You acted in good faith with regard to the liabilities under the loan
  • You have and will continue to experience financial difficulty to such an extent that you will be unable to pay the liabilities under the loan

Are You Getting A Refund

Refunds that are issued as a result of returns for years prior to the year of bankruptcy are considered to be the property of the estate in bankruptcy. As a result, these refunds will be sent to the trustee. Any refunds issued in relation to returns for years subsequent to the year of bankruptcy will be sent to you, unless the trustee has obtained a court order.

For the year of bankruptcy, any issued refund related to the pre-bankruptcy return will be sent to the trustee. Issued refunds related to the post-bankruptcy return will also be sent to the trustee if your bankruptcy assignment date is July 7, 2008, or later. Post-bankruptcy refunds that are issued for bankruptcies with an assignment date prior to that will be sent to you, unless the trustee has obtained a court order or has provided us with an Authorization and Direction letter.

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What Happens When You File For Bankruptcy A Second Time

Legally speaking, a person can file for bankruptcies as many times as they want. However, the process becomes more restrictive.

With a second bankruptcy, you will not qualify for an automatic bankruptcy discharge in nine months. Bankruptcy will last from 24-36 months, depending on whether or not you have surplus income.

A trustee will ask the court to hear your application for discharge. The court will decide the terms of your discharge, including how long you will be in bankruptcy and whether you are required to continue making payments into bankruptcy. A creditor can also oppose your bankruptcy discharge which could result in your bankruptcy lasting longer and possibly costing more.

What Happens When You Need To Declare Bankruptcy In Canada


The reasons for declaring bankruptcy in Canada vary by household. Job loss, divorce, economic fallout from the pandemic, and simply not following a budget can all lead to bankruptcy. Bad things happen to good people, and events during the past two years have certainly been challenging.

While there was a sharp drop in filings for bankruptcy in 2020, there were still nearly 33,000 bankruptcies last year. Expect This number to rise again after COVID, as 2021 filings are slowly returning to higher levels, according to Bloomberg news.

This guide can help you understand how bankruptcy works in Canada, what you can expect when you file, and what will happen once your filing is complete. In this guide, well focus on personal bankruptcy, however, there are other types of bankruptcies for small businesses and corporations.

  • Before You File
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    Select A Licensed Insolvency Trustee To Help You Understand Canada’s Debt Regulations

    Licensed Insolvency Trustees are the only people licensed by the Canadian Superintendent of Bankruptcy to administer consumer proposals and bankruptcies.

    In order to declare bankruptcy or file a consumer proposal vou must work with a Licensed Insolvency Trustee.

    Your trustee will provide information about consumer proposals, the process for filing bankruptcy, and about other debt relief options. Also, during the bankruptcy or proposal process your trustee will ensure your rights are respected.

    When selecting your trustee, you should keep the following in mind:

    • Your trustee should be local or at least easy to access.
    • You should feel comfortable with your trustee. Ask them questions about your situation and make sure you understand their answers.
    • Confirm they are licensed by the Superintendent of Bankruptcy .

    must work with a Licensed Insolvency Trustee when filing bankruptcy in Canada.

    Here on Bankruptcy-Canada you can find and connect with one of the top Licensed Insolvency Trustees that is local to you. We list only Trustees who have shown a long standing ability to help people find debt relief.

    Learn More

    Contact A Licensed Insolvency Trustee Today

    If youre wondering whether a Manitoba bankruptcy is the right next step for you or your family, contact us today. Remember, the sooner you reach out for professional help, the more debt relief options you may have available to you. Bankruptcy may not be inevitable. So get started on the fresh financial start you deserve, and contact us today.

    If you need a little more information on how to file for bankruptcy in Manitoba, give us a call or set up an appointment to come in to see us. We will do an in-depth review of your situation and help you find a solution that works for you a solution that gets you back on your feet, financially.

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    S To Filing Bankruptcy In Canada

    There are 5 basic steps to filing bankruptcy with a Licensed Insolvency Trustee in Canada:

  • Get a free debt assessment,
  • Sign the paperwork to declare bankruptcy,
  • The trustee files these documents with the government starting your creditor protection,
  • Complete your bankruptcy duties, then
  • Obtain your Certificate of Discharge which eliminates your debts.
  • Proof Of Claim Bankruptcy Canada: The Settlement Requires Court Approval

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    The USTP participated in a nationwide negotiation arrangement with Citibank N.A. , Department Stores National Bank , as well as FDS Bank. Citi will pay $5 million to remediate robo-signed evidence of proofs of claim submitted in more than 71,000 consumer bankruptcy files involving Macys charge card accounts.Moreover, the suggested agreement has been submitted to the U.S. Bankruptcy Court for the Northern District of Georgia, where it is subject to court authorization. FDS Bank serviced the accounts and retained certain bankruptcy-related services to outside vendors.

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    Bankruptcy And Insolvency In Canada Advantages And Disadvantages

    Filing for bankruptcy is stressful on an individual. There is a lot to know. However, if you have spoken to a Licensed Insolvency Trustee about your options, and have more unsecured debt that you can afford to pay on a monthly basis, chances are Bankruptcy is the best option to eliminate your debt and relieve your stress.

    We have compiled a list of Advantages and Disadvantages of Filing for Bankruptcy in Canada:

    It Does Not Mean You Lose Everything

    Many people are under the misconception that if they declare personal bankruptcy they will not be able to keep anything they own and that they will lose everything in a bankruptcy.

    Fortunately, this simply is not true.

    Each province sets a list of assets that you are allowed to keep when going bankrupt and in fact most debtors filing for personal bankruptcy are able to keep all of their assets.

    Bankrupt debtors can even keep their car and house when .

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    What Are The Causes

    People file bankruptcy for many different reasons although there are certain causes of personal bankruptcy that are more common than others.

    The most common causes of money problems that lead to bankruptcy are:

    * Loss of a job * Personal business failure * Medical bills and/or loss of income from being out of work.

    Personal bankruptcy is available for honest but unfortunate debtors who overwhelming debt and need a fresh financial start.

    Many people only turn to filing personal bankruptcy after struggling to repay their debts sometimes for years.


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