Who Will Know Of My Filing
In a bankruptcy where there are significant assets, a notice is placed in the Legal Notices section of the newspaper, notifying creditors of the date of the meeting of creditors.
Any legal filing of a bankruptcy is a public document which the general public has access to.
From this documentation, the credit bureau is notified and the bankruptcy is recorded and will remain on your credit record for six years after your discharge date.
You Will Be Discharged From Bankruptcy
A discharge releases you from the legal obligation to repay the debts you had as of the date you filed for bankruptcy, except for specific types of debts that are excluded by law. These include alimony and child support payments, student loans , court-ordered fines or penalties, and debts arising from fraud.
The timing of your discharge depends on a number of factors, including whether this is your first bankruptcy, and whether you are required to make surplus income payments.
Timing of your discharge from bankruptcy
If this is your first bankruptcy and you are not required to make surplus income payments , you will be eligible for an automatic discharge from bankruptcy in nine months. If your surplus income is higher, your bankruptcy will be extended to 21 months and you will be required to make payments from your surplus income.
Your discharge from bankruptcy will happen automatically if
- the discharge is not opposed by the LIT, a creditor or the Office of the Superintendent of Bankruptcy
- you have attended the mandatory financial counselling sessions and
- this is your first or second bankruptcy.
To ensure that a greater percentage of debts is repaid to creditors, the following standards set out when an automatic discharge will occur.Timing of your discharge from bankruptcy , First Bankruptcy
|Surplus income is greater than $200 per month||36 months after filing|
Corporate Bankruptcy In Canada
The Bankruptcy and Insolvency Act treats individuals, businesses, and corporations basically the same in terms of the options available. Individuals owing less than $250,000 can file a consumer proposal to reorganize their debts and pay them off over a set period of time.
Individuals, businesses, and corporations owing more than $250,000 can file a Division 1 Proposal to reorganize. This option can avoid director liabilities and other downfalls of bankruptcy. Alternately, businesses owing $5 million or more can reorganize under the Companies Creditors Arrangement Act .
If financial matters are so dire that a reorganization is not viable, then full bankruptcy is the remaining option, which results in the liquidation of assets to satisfy debt as much as possible. The difference here is that individuals have assets that are protected as exempt â car, home, furnishings, and so on â but a corporate bankruptcy involves the liquidation of all assets. Also, while individuals can retain some income, a corporation must relinquish all of its income.
While individuals can emerge from bankruptcy with a discharge, corporations can never be discharged from bankruptcy unless they repay all of their creditors in full.
A corporation is considered insolvent if:
It is unable to meet its obligations as they come due
It has already ceased paying its obligations as they come due
Its assets, at fair market valuation, are insufficient to meet all obligations
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It Gives You A Fresh Start
When you declare personal bankruptcy in Canada you will receive an Automatic Stay of Proceedings which prevents your creditors from taking collection action to collect their debts.
Collection agencies will stop calling.
Wage garnishments will stop and interest of your debts stop accruing.
When you receive your bankruptcy discharge all your eligible debts will be erased.
As a legal process under the BIA, personal bankruptcy will eliminate most of your debts and the bankruptcy process will give you a fresh start and allow you to rebuild your credit.
Types Of Personal Bankruptcy
Bankruptcy is a legal proceeding that relieves an insolvent person or debtor of his or her financial debts.
In Canada, personal bankruptcies are governed by the Bankruptcy and Insolvency Act, which allows for two types of bankruptcies:
Summary Administration Bankruptcy
A summary administration bankruptcy deals with consumer bankruptcies where the realizable assets of the bankrupt, after the claims of secured creditors are deducted, will not exceed $10,000.
The vast majority of personal bankruptcies are summary administration bankruptcies.
A summary administration bankruptcy has streamlined procedures that attempt to reduce the expenses related to the bankruptcy.
These include the following:
* Notice of the bankruptcy is not required to be published in a local newspaper
* All notices, statements, and other documents are sent by ordinary mail
* A first meeting of creditors is required to be called by the trustee within 30 days after the date of the bankruptcy only if it is requested by the official receiver or by creditors who have in the aggregate at least 25 percent in value of the proven claims
* There are no inspectors unless the creditors decide to appoint them. If no inspectors are appointed, the trustee administers the bankruptcy
* Court attendance is kept to a minimum
* The trustees fees are set by a tariff and capped.
Ordinary Administration Bankruptcy
In an ordinary administration bankruptcy, the individuals assets will exceed $10,000.
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Common Bankruptcy Myths Explained: Are The Stories You Heard About Bankruptcy True Learn The Facts Here
Unfortunately, many people are misled by the myths that they are told by the media or their well-meaning, but misinformed friends, or family members.
Here you can get the truth because we have heard every myth about bankruptcy and have outlined some of the common myths and the truth to the myth to help people make an informed decision about seeing a trustee:
Myth:I will lose everything when I go bankrupt.
Reality:Most people that go bankrupt with our team of trustees are able to keep all of their assets because the bankruptcy exemptions in their province protect everything they own.
If your assets value exceeds the value that the exemptions allow you can buy back the equity from the trustee in the asset, whether it is a boat, car, motorcycle or any other asset, if you can afford to buy the asset.
In most cases though, debtors considering bankruptcy, will have all of their belongings protected.
You may also retain non-exempt assets by maintaining the monthly payments that are required.
Myth:Bankruptcy lasts for 7 years.
Reality:Bankruptcy lasts for 9 months, at the cost of $1,800 / $200 a month for the vast majority of filers and provides a much quicker way to get out of debt than most other methods for getting your debt under control.
The maximum amount of time a bankruptcy can last is 3 years, but only for a person declaring bankruptcy for a second or subsequent time, who also has excess income.
Your GST / Income tax debt will be wiped out upon your discharge.
Our Licensed Insolvency Trustees
Paving the road to debt freedom has been our commitment for over 20 years. We take pride in finding the best debt relief solutions for each individual client, while considering their personal and financial circumstances. Our goal is to help each client find the most efficient and cost effective option to reduce or eliminate their debts. When you require a trusted licensed insolvency trustee in Toronto or throughout southern Ontario were here to help.
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Debt Relief Toronto And Declaring Bankruptcy In Toronto
Debtit hangs over you like a dark cloud and often residents seek debt relief in the form of . We know that debt can affect your health, it can make you sick from worry, it can affect your sleep, and it can even be a relationship breaker. But before you start experiencing these kinds of problems, there is help.
Debt Relief- Declaring Bankruptcy
The Bankruptcy process was put in place to give individuals or debtor a chance for a fresh start. It also provides measures to counsel the debtor on financial management to prevent the debtor from repeating the process. Lastly it protects the creditors from competing with each other and easing the pressure placed on the debtor.
The benefits to the individual is that he or she would be discharged from all or a portion of the existing debt. In addition, all collection calls would stop by law. The person declaring bankruptcy may be able to keep certain property exempt from creditors.
The downside is that a bankruptcy will be shown on your credit rating for up to seven years. Any surplus income may be collected and distributed to creditors.
Debt Relief Consumer Proposals
In 2013 there were more consumer proposals in Ontario than bankruptcies . This seems to be a growing trend across Ontario. The reason is that a proposal carries many of the same benefits compared to a bankruptcy, however, it has fewer restrictions on the Debtor and their assets. In addition, proposals do not have the same negative stigma attached to them.
Impact On Your Credit Rating
One of the first considerations to make when asking yourself Is it good to file bankruptcy or not? is the impact it will have on your credit. While most people considering bankruptcy already have bad credit, its often not irreparable.
Declaring bankruptcy, however, will drop it to a 9 the lowest rating there is for the duration of the bankruptcy period plus an additional six years following the bankruptcy discharge .
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What Happens To My Debt If I Declare Bankruptcy In Canada
Bankruptcy will eliminate most of your debts, such as unsecured debts including credit card bills, medical bills, and payday loans. You may still be required to pay your secured debts, such as your mortgage or motor vehicle loan.
Some debts cannot be eliminated by your bankruptcy. Those include:
- Court-imposed fines
- Debt incurred by misrepresentation
- Alimony or maintenance payments
- Debt for damages imposed by Civil Court for intentional bodily harm, sexual assault, or wrongful death
- Student loans, if bankruptcy occurs within 7 years of ceasing full- or part-time studies
Meet With Your Trustee
This will occur at your trustees office or online during the pandemic. The trustee will explain all options available to you. He or she will ask about your income, your assets, how much you owe, and what your expenses are.
You should also ask questions as well, including how to start, what the costs are, when to make payments, what assets you may have that would qualify for exemption and any other questions you have.
At the end of the meeting, if you decide to move forward, the trustee will file the bankruptcy application and all the necessary paperwork with the Office of the Superintendent of Bankruptcy Canada.
Once it is filed, the trustee will begin overseeing the legal obligations for your bankruptcy. You will stop making payments and any legal action against you, including wage garnishment, will end. Unless a meeting of creditors is requested, you will skip to Step 5.
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The Corporate Bankruptcy Process
As stated above, the process for corporate bankruptcy is virtually the same as that for an individual or small business. The key figure in any proposal or bankruptcy is known as the Licensed Insolvency Trustee , who is empowered as an officer of the court by the Office of the Superintendent of Bankruptcy .
The LITâs responsibilities are to receive and administer proposals and bankruptcies, protect the rights of creditors, investigate the affairs of the debtor, and ensure the rights of the debtor are not abused.
The path to filing for corporate bankruptcy involves these steps:
Find and meet with a Licensed Insolvency Trustee
File the necessary bankruptcy papers with the LIT, who will advise creditors of your action
Turn over corporate assets and management of day-to-day operations to the LIT
The LIT will then oversee the sale of corporate assets and distribute the proceeds to creditors
The LIT will also pay employees under terms of the Wage Earner Protection Program Act
The corporation will remain in bankruptcy and not be discharged unless all debts are paid in full
What Does Discharged Mean
Discharged means your bankruptcy has ended you no longer have to pay your debts and you are able to apply for credit. However, if you do not complete your duties during bankruptcy, you will not get discharged, your trustee will close your file, and creditors can resume collection efforts against you. To learn more about how to get out of bankruptcy, read about how long bankruptcy lasts in Canada.
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Filing For Bankruptcy In Etobicoke Ontario
Considering declaring bankruptcy in Etobicoke? No matter how bad or overwhelming your debt might seem, there are always solutions – and your MNP LTD Licensed Insolvency Trustee can help. We help thousands of Canadians overcome all types of financial difficulties, and we’re here to help you too.
When you turn to your local MNP LTD office in Toronto , you’ll discover a staff of dedicated, skilled and experienced professionals from the same community as you. Dont allow debt to consume your life. There are options — discover them with MNP LTD now.
Get Out Of Debt Take The First Step Today
You dont have to fight this battle alone. If youre overwhelmed by debt and cant find a way out, its time to talk with a bankruptcy attorney. The solution to your financial problems may be right in front of you.
Is Chapter 7 Bankruptcy the Right Answer for You?
Chapter 7 bankruptcy offers a fresh start for many people who feel buried in credit card debt, medical bills and other unsecured debt.
In most Chapter 7 cases, an automatic stay takes effect as soon as the case is filed. That stay freezes collection action immediately: repossession, foreclosure, wage garnishment, lawsuits, even threatening letters and telephone calls.
When a discharge order is entered in a Chapter 7 case often just four to five months after filing most unsecured debt is eliminated. That means creditors and collection agencies are violating a court order if they ever try to collect that money again.
What would waking up debt free do for you? Are you ready to find out?
The Chapter 13 Alternative
Of course, Chapter 7 isnt a one-size-fits-all solution. For people with high income, high-value assets that may not be exempt in bankruptcy, or a lot of secured debt, Chapter 13 often provides relief.
The core of a Chapter 13 case is a three to five year repayment plan that allows time to catch up on past due balances without the constant pressure of collection actions, mounting late fees and the ongoing threat of repossession or foreclosure.
Take the first step right now and breathe easier tonight.
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Bankruptcy Exemptions: What You Keep
Under Ontario law, certain assets are exempt from seizure by a bankruptcy trustee in an Ontario bankruptcy. The rules regulating bankruptcy exemptions in Ontario say that in an event of a personal bankruptcy you are permitted to keep the following:
- unlimited clothing
- $7,117 for a motor vehicle
- $14,180 worth of furnishings and appliances
- $14,405 worth of tools of the trade
- Most pension plans, certain types of life insurance policies, and RRSPs .
At Hoyes, Michalos & Associates Inc., prior to filing your Bankruptcy we will ask you to make a list of all items in your house, and to assign a fair value to each item.
We define fair value as the amount you would get if you were to sell that item at a garage sale. Therefore, even though you may have paid $300 for your television, if it is a few years old it is probably not worth more than $50 or $100 at a garage sale. This helps us determine your exempt assets and non-exempt assets.
In truth, most people keep all of their assets in bankruptcy. There are alternatives to bankruptcy like a consumer proposal if you have property valued above the exemption limits that must be realized by your licensed insolvency trustee during bankruptcy.
Rack Up Debt Declare Bankruptcy Repeat And Repeat Again How Thousands Of Canadians Are Doing It And Costing The Rest Of Us
Kenneth Nantel seemed unbothered by his bankruptcy.
It was his fourth in 10 years, during which time he had relied on Canadas insolvency system to rid him of more than $100,000 in debts.
This time, the buck was going to stop. The judge overseeing the case had had enough. Nantel, she ruled, did not deserve yet another fresh start.
Hes shown no reluctance of using bankruptcy to be freed from his debts, the judge, known as a registrar, wrote in a 2012 decision. His past conduct demonstrates a contempt for the rights of his creditors.
Discharging Nantel of his fourth bankruptcy liberating him of the debt that led him into insolvency would undermine the integrity of Canadas bankruptcy system, the registrar said. She denied his application.
Nantel, who refused to comment for this article, persisted.
Four years after the 2012 ruling, Nantel, now working as a mechanic and living 120 kilometres east of Montreal, went before a different registrar and received a discharge from that same bankruptcy.
And eight days after that, he declared bankruptcy for a fifth time, owing more than $37,000 in new debts.
Nantel is one of a staggering number of Canadians who are washing themselves of their debt by re-using a bankruptcy system meant to rehabilitate honest but unfortunate debtors, a joint investigation by the Toronto Star and La Presse has found.
Last year alone, 20 Canadians filed their fifth bankruptcies.
It shows that the bankrupt has not received the message.
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Dip Into Retirement Funds
Planning for your retirement is important, but if borrowing some funds now can significantly benefit your situation, its worth speaking to a professional about it. Using retirement investments can help you avoid the consequences of filing bankruptcy, but its important to weigh the pros and cons of dipping into your retirement funds to pay off your current debts though the rate of return on many investments is often much lower than the interest on credit card debt.