Who Can File Bankruptcy
To go into personal bankruptcy in Canada, a person must have lived or done business in Canada within the last year or, have the majority of their property in Canada, and must be insolvent.
To be insolvent essentially means:
Consolidation & Debt Repayment Plans
Consolidation means a lot of things, and while most people think that they need a loan to consolidate their bills and debts, thats not always possible. If youve got a good household budget, a loan might work for you. However, if youve been , consolidating only your monthly payments might make more sense.
Consolidating payments doesnt involve borrowing more money, so theres never a problem with bad credit. Thats how a debt management program and plan with a non-profit credit counselling organization works. Creditors help by lowering or waiving interest charges while youre making your payments. This lets you pay off your debts and saves you thousands in interest and fees. What you pay each month is based on what you can afford after youve had help to create a realistic budget.
Should I File Bankruptcy In Manitoba
When you schedule a confidential evaluation meeting with a Manitoba bankruptcy expert, they will help you examine whether any of the bankruptcy alternatives that are available to Manitoba debtors could help you get out of debt.
All Manitoba bankruptcy experts must follow a strict code of professional ethics.
This means that the Trustee will always give you their best advice, even if that means the Trustee tells you how to avoid using their services but still get out of debt.
The Trustee will help you determine what is the best choice for getting out of debt.
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Northwest Territories / Nunavut / Yukon Exempt Property
The above exemptions for the territories do not apply if:
- You are behind on child or spousal support payments.
- You have absconded or are about to abscond from the territories, leaving no spouse or family behind.
Statute: Read the Yukon Exemptions Act , NWT Exemptions Act , and Nunavut Consolidation of Exemptions Act .
A Licensed Insolvency Trustees is your trusted resource for current information on insolvency solutions, and factors that may affect your specific situation. Contact a Licensed Trustee today. Your first appointment is free, and your discussion is confidential.
Find a local trustee that you can rely on. We have trustees everywhere from British Columbia to Ontarioand more.
Does Bankruptcy Take Care Of Any Tax Money I Owe To The Canadian Revenue Agency
Many people assume that income tax debt is not dischargeable in bankruptcy. However, in a bankruptcy, your debt to the CRA is treated the same as any other unsecured debt, such as credit cards or lines of credit. After filing for bankruptcy, all interest and collection activity by the CRA will stop. Additionally, your trustee will communicate directly with the CRA on your behalf.
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Can You Keep Your Car If You File For Bankruptcy
Most provincial regulations include an exemption for some or all of the value of your car, especially if it is needed for your occupation. If you are making payments on your car, retaining the car will depend partly on whether you can continue the payments. A Licensed Insolvency Trustee can explain how the regulations will apply to your specific situation.
Provincial exemptions for homes and cars can be confusing, especially when considering mortgages and leases. A Licensed Insolvency Trustee will gladly help you learn how these assets would be affected in a bankruptcy. Your conversation is confidential and you are under no obligation. Contact a Trustee today!
Bankruptcy Exemptions by Province and Territory
CAUTIONS:
- The exemption lists we provide below are simplified summaries of the law
- Even where there is no dollar limit, exemptions are limited to what you and your dependants really need
- The provinces often adjust the exemptions for various reasons, such as inflation
For interpretation of the rules in your case, we strongly recommend that you contact a Licensed Insolvency Trustee to review your situation and determine which of your assets will be exempt if you file for bankruptcy. You should be completely clear on what you can keep if you go bankrupt in Canada, versus what you may lose.
Please choose your province or territory:
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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Lottery Winnings Or Inheritances
If you win the lottery or receive an inheritance after youve filed, but before youve been discharged from bankruptcy, that money must be given to the LIT, who will distribute it to your creditors. If the amount youve received is greater than the debts you owed, you can keep whats left after your creditors have been paid off.
How Do My Creditors Learn Of My Bankruptcy
The Licensed Insolvency Trustee in an individuals consumer bankruptcy mails a notice of bankruptcy to each of the individuals creditors. Creditors of a bankrupt individual record the bankruptcy when they receive this notice.
If you are applying for new credit while your bankruptcy remains on your credit bureau records, the companies considering granting credit to you may record the bankruptcy when they check your record at a credit bureau.
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Will My Tax Refund Be Affected If I File For Bankruptcy
If you file for bankruptcy, your income tax refund will be affected. The date of the bankruptcy creates a new income tax year end for Winnipeg residents, and all other Canadians. Any tax refunds that you would become entitled to in the year of bankruptcy will flow to your bankrupt estate. There are two tax periods in the year of bankruptcy. The period from January 1st to the date of bankruptcy, known as the Pre-Bankruptcy period, and from the date of bankruptcy to the end of the year, known as the Post-Bankruptcy Period.
Your Creditors May Hold A Meeting
Sometimes, a meeting of creditors is required or requested. The purpose of this meeting is to
- allow creditors to obtain information about the bankruptcy
- confirm the appointment of the LIT
- appoint up to five inspectors to supervise the administration of your estate and
- allow creditors to give direction to the LIT.
If a meeting is called, you will be required to attend.
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When Is The House Liable For Seizure
Determining whether the house has equity is not enough to decide whether it will be liable for seizure.
In Ontario, the Execution Act rules clearly on the issue. Under subsections 2 and 2, any principal residence with equity $10,000 or less may not be seized. Conversely, a person declaring bankruptcy cannot keep their house if the equity exceeds $10,000.
In Quebec, the law is not as specific. Each situation must be analyzed individually.
It is up to the LIT to make a decision. They must determine whether selling the house will result in a profit for the benefit of creditors.
The LIT must therefore anticipate the costs associated with selling the house, such as
- Mortgage payments
- Other maintenance costs
- Etc.
Having made the calculations, the LIT will seize the house if they deem there are profits to be made by selling it. Otherwise, the owner can keep the house, as long as they continue to make payments.
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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!
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What Are The Disadvantages Of Bankruptcy
- You could possible lose some of your assets
- Your credit will be negatively impacted
- You cannot serve on the board of directors of an incorporated company
- Bankruptcy will remain on your credit report for some years, although you can still rebuild a good credit score
- A bankrupt must disclose that they are an undischarged bankrupt when attempting to borrow more than $1,000.
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.
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The Cost Of Filing For Bankruptcy A Second Time In Canada
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When you are in a dire financial situation, sometimes there is no other choice but to file for bankruptcy. Bankruptcy is meant to give you a fresh start and teach you a lesson about financial literacy to ensure you are better with finances going forward.
Check out our video explaining personal bankruptcy.
However, the lesson doesnt always work. For one reason or another, people might find themselves in a rough spot financially again. Whether it is a costly emergency, low savings or that they simply didnt learn their lesson, people sometimes need to file bankruptcy a second time.
It is uncommon, but there are those out there who file for bankruptcy more than once. About 15% of people who file for one bankruptcy end up having to file a second time. While you might think a second bankruptcy is almost exactly like the first, that isnt really the case. In fact, there are some very different rules and costs associated with a first bankruptcy vs. a second.
To learn how much filing for bankruptcy will cost you the first time, read this.
With that in mind, this article will cover the costs, as well as other important information associated with filing for bankruptcy a second time 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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Exemptions In British Columbia:
- No limit on clothing for you or your dependents all clothing is exempt from bankruptcy
- Household furnishings and appliances up to $4,000
- One motor vehicle up to $5,000 unless you are behind on child support payments, in which case the limit is $2,000
- Work tools and work-related property up to $10,000
- No limit on medical and dental aids for you or your dependents
Northwest Territories Bankruptcy Exemptions
In the Northwest Territories, property exempt from seizure in bankruptcy is set out in the Exemptions Act and applies to the equity in an asset. Equity is the difference between the value of the asset and what you owe on the asset.
Example: If you have household furniture and equipment in your home worth $5,000 and you do not owe any outstanding loans on these items, the equity you have is $5,000. In the Northwest Territories, the exemption for the total of these items is $5,000. In this case, you would be entitled to keep these possessions and your creditors cannot take them from you.
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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.
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Your Responsibilities During Personal Bankruptcy
During your bankruptcy you are required to:
- Provide monthly income statements.
- Make monthly payments to your LIT, based on your ability to pay according to national guidelines from the Superintendent of Bankruptcy.
- Attend two credit counseling sessions with your Trustee.
And thats it in all likelihood, if this is a first-time bankruptcy, in nine months you will receive a discharge from your bankruptcy. The discharge is the point at which your debts are eliminated and you are released from the duties required of an undischarged bankrupt.
One thing to bear in mind filing bankruptcy in Manitoba will have reduced your to R9, which is the lowest rating possible.
The good news is that your Licensed Insolvency Trustee can advise you of ways to rebuild your credit rating as quickly as possible.
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Bankruptcy Laws Are Written To Allow Individuals Who Are Buried With Debt To Receive A Discharge From Their Debts In A Fair Honest And Legal Manner
If you are thinking about filing for bankruptcy you have come to the right place.
You can find all the information you need about bankruptcy on our website, and when you are ready to contact a bankruptcy trustee you can find a list of professional trustees on our site.
When you are ready to learn more about bankruptcy, one of our trustees will provide you with a free bankruptcy evaluation consultation.
Bankruptcy trustees can also help you with making a consumer proposal to your creditors.
A consumer proposal will involve repaying a portion of your debts over a three to five year period.
If you file for bankruptcy you can receive a discharge of your eligible debts within 9 months.
A Manitoba bankruptcy filing can provide you with a quick and simple fresh start.
You can read our FAQ page to get the answers to some of the more common bankruptcy questions, but if you still have bankruptcy questions after viewing our site you can schedule a free appointment with a licensed trustee in your city.
Many people are worried about getting credit after bankruptcy and getting a credit card again, however once you have been discharged from bankruptcy you can begin rebuilding your credit, including getting a credit card.
People are also worried about losing their belongings and property when they file bankruptcy because they have heard a misconception.
To see what assets you can keep when filing bankruptcy visit our Manitoba bankruptcy exemptions page.
What Are The Benefits Of Filing Bankruptcy
- Filing bankruptcy will stop all collection calls, wage garnishments and lawsuits against you
- Your creditors cannot take all of your assets, as certain assets are protected by the bankruptcy exemptions
- You will receive financial counselling, which gives you the knowledge and information to help you stay out of debt and manage your finances in a responsible manner once you are out of bankruptcy
- Bankruptcy gives you a fresh financial start
- All of your unsecured debts
- Bankruptcy allows you to eliminate government debt such as income tax debt and student loan debt
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