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What Is A Trustee And What Is The Trustees Role
A Licensed Insolvency Trustee is the only professional who can administer a bankruptcy or consumer proposal in Canada. This means that you need to engage a Trustee in order to file your bankruptcy.
Licensed Insolvency Trustees are highly qualified professionals and are federally licensed by the Office of The Superintendent of Bankruptcy. Trustee fees are regulated under the Bankruptcy and Insolvency Act.
The federal government requires the Trustee to perform an assessment of your financial situation to determine if bankruptcy is the best option for you.
With your help, the Trustee will examine your financial situation including your assets, income, expenses, and debt level. You may have additional options, which the Trustee will explain and describe. The Trustee will also fully explain the bankruptcy process so you can decide if you should declare bankruptcy.
If you choose to file for bankruptcy or to file a consumer proposal the Trustee will prepare the necessary paperwork, review it with you, and file it with the Office of the Superintendent of Bankruptcy.
Can I File For Bankruptcy On My Own
You can file for bankruptcy on your own, but the process is long and complicated, and you could benefit from the guidance and clarity a bankruptcy attorney can provide. Even the U.S. Courts recommend working with an attorney to help you fully understand your options, exemptions, bankruptcys benefits, and the complexities of the process.
A bankruptcy lawyer will:
- Be familiar with applicable state and federal laws
- Obtain all necessary paperwork and documentation
- Explain files, schedules, and other paperwork
- Represent you at hearings and in court
For many bankruptcy filers, an important benefit of hiring a bankruptcy lawyer is their peace of mind. This comes from knowing each step is being met, and your fresh financial start will be error-free and effective.
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Can I Keep My House And My Car Under Canadian Bankruptcy Rules
Bankruptcy should not impact your secured debts, such as a vehicle lease or a mortgage, as long as you continue to make payments and there is no equity in your secured assets.
In most provinces, you do not lose your house or car when you declare bankruptcy. You can work out arrangements with your trustee and creditors to keep the asset and continue paying the mortgage or loan. Learn more about what assets you can keep in bankruptcy.
Your Responsibilities When A Bankruptcy Order Is Made
- give the official receiver information on your finances
- give the official receiver a full list of your assets
- tell your trustee about any rise in income during your bankruptcy
- tell anyone who offers to loan you over £500 that youre bankrupt
- go to court to explain why you owe money if asked to do so
There are also things you cannot do while bankrupt. These are called restrictions.
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Choose The Right Bankruptcy Filing For You
We are proud to represent our clients in four primary areas of bankruptcy relief. Called chapters, each of these forms of bankruptcy has its own advantages and disadvantages. The four chapters used for filing for bankruptcy, where we help clients find debt relief, include:
- Chapter 7: Straight bankruptcy, where debts are fully forgiven with few exceptions.
- Chapter 11: Complex business bankruptcies with debt reorganizations and restructures.
- Chapter 12: Debt relief and repayment plans for family farmers and family fishermen.
- Chapter 13: Debt relief for income earners that can help stop foreclosures and other looming debt recovery efforts.
When you decide to declare bankruptcy, your lawyer will help you choose the right bankruptcy chapter for your financial situation. Filing for bankruptcy is a complex, time-consuming procedure. Your lawyer can help you understand and navigate the filing process from your initial petition to final discharge.
Advantages Of Chapter 13
Chapter 13 offers individuals a number of advantages over liquidation under chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Nevertheless, they must still make all mortgage payments that come due during the chapter 13 plan on time. Another advantage of chapter 13 is that it allows individuals to reschedule secured debts and extend them over the life of the chapter 13 plan. Doing this may lower the payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on “consumer debts.” This provision may protect co-signers. Finally, chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 trustee who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chapter 13 protection.
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You Cant File Chapter 7 If You Make Too Much Money
If youâre making less than the median income, youâre probably wondering how thatâs even possible. Donât fret this is not about you. This is about folks who have money they can put into savings after paying their main living expenses.
Thatâs called having disposable income and itâs calculated by the means test. Having too much disposable income means youâre not eligible to simply walk away from your debt. But, while you canât file Chapter 7, you can still get a bankruptcy discharge after completing a Chapter 13 repayment plan.
If You’re Overwhelmed By Your Debts Bankruptcy Is Just One Option
If you have large debts that you cant repay, are behind in your mortgage payments and in danger of foreclosure, are being harassed by bill collectorsor all of the abovedeclaring bankruptcy might be your answer. Or it might not be.
Bankruptcy can, in some cases, reduce or eliminate your debts, save your home and keep those bill collectors at bay, but it also has serious consequences, including long-term damage to your . That, in turn, can hamper your ability to borrow in the future, raise the rates you pay for insurance, and even make it difficult to get a job.
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How Does Bankruptcy Affect Assets And Liabilities
Depending on how you choose to declare bankruptcy, your assets and liabilities will be affected in different ways. In a Chapter 7 bankruptcy, many of your assets are up for liquidation to pay your creditors with the proceeds. In Chapter 13, you retain assets while working on a repayment plan for your outstanding debts.
See how bankruptcy affects assets and debts in the following debtee categories.
Small Business Owners
For small business owners with lots of personal debt, bankruptcy may help them continue to stay in business. It’s important to note that business debts aren’t alleviated with Chapter 7 or Chapter 13 unless you’re a sole proprietor and are personally responsible for them.
- Chapter 7: For sole proprietors, business and personal debts can be wiped out in a single bankruptcy case. You’re not obligated to meet income requirements if your business debt exceeds your personal debt.
- Chapter 13: Your business assets aren’t liquidated, but only your personal liability for business debts can be wiped out. The business remains responsible for its debts.
Some business assets can be exempt from Chapter 7 bankruptcy filings. For instance, if your business is service-based and doesn’t maintain equipment or significant inventory, you can likely continue to run your business after discharging business debts through bankruptcy.
Student Loan Holders
I Made An Advance Payment To A Company That Has Declared Bankruptcy What Can I Do
If you pre-paid for a service, you become a creditor and the LIT will send you a Proof of Claim form with your creditor’s package. Follow the instructions on the form and in the package, and make sure you have all of the required documentation proving that the debtor owes you money.
To be recognized as a creditor and to be eligible to share in the distribution of dividends, if any, you must provide the LIT with a completed Proof of Claim.
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Who Can Be Made Bankrupt
A bankruptcy order can be made for one of three reasons:
- you cant pay what you owe and want to declare yourself bankrupt
- your creditors apply to make you bankrupt because you owe them £5000 or more
- an insolvency practitioner makes you bankrupt because youve broken the terms of an individual voluntary arrangement
What Does It Mean When A Company Files For Bankruptcy
4 minute read
After the World Health Organization declared COVID-19 a pandemic, many states imposed lockdowns, ordering non-essential businesses to close and limiting public interaction. Lockdowns severely curtailed shopping and travel, which caused many businesses â especially in the restaurant, hospitality, and leisure industries â to struggle economically.
Thousands of companies have declared bankruptcy, including big names such as Neiman Marcus, Hertz, J. Crew, and Brooks Brothers. But these familiar businesses are not necessarily gone for good. Bankruptcy can allow a company to reorganize its debt and try again.
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What Happens When Declaring Bankruptcy
If you’re struggling financially, bankruptcy gives you the opportunity to pay down a portion of your debts over time or have some of them eliminated entirely.
Either way, declaring bankruptcy grants what’s called an automatic stay, which is essentially a block on your debt to keep creditors from trying to collect. They can’t deduct money from your bank account, garnish your wages or go after any of your other assets.
You’ll then have time to work with the court and your creditors to determine the next steps.
Do You Get Out Of All Your Debts If You File For Bankruptcy
Bankruptcy can renegotiate or erase many types of unsecured debts, such as on credit cards or personal loans. Other debts cannot be discharged in a bankruptcy, including:
The U.S. Bankruptcy Code lists 19 different categories of debts that cannot be discharged in:
- Alimony and child support
- Certain unpaid taxes, such as tax liens. However, some federal, state, and local taxes may be eligible for discharge if they date back several years
- Debts for willful and malicious injury to another person or property
- Debts for death or personal injury caused by the debtorâs operation of a motor vehicle while intoxicated from alcohol or impaired by other substances
- Debts that you failed to list in your bankruptcy filing
- Common/maintenance fees for condo association
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Have Questions About Student Loans And Bankruptcy Wagner Law Office Pc Can Help
If you have questions about student loan forgiveness and how it may affect your bankruptcy case, Wagner Law Office, P.C. can provide guidance. Contact us today to set up a consultation and explore your options for managing student loan debt.
Contact us at 536-5124 or through our online contact form.
The Role Of An Examiner
The appointment of an examiner in a chapter 11 case is rare. The role of an examiner is generally more limited than that of a trustee. The examiner is authorized to perform the investigatory functions of the trustee and is required to file a statement of any investigation conducted. If ordered to do so by the court, however, an examiner may carry out any other duties of a trustee that the court orders the debtor in possession not to perform. 11 U.S.C. § 1106. Each court has the authority to determine the duties of an examiner in each particular case. In some cases, the examiner may file a plan of reorganization, negotiate or help the parties negotiate, or review the debtor’s schedules to determine whether some of the claims are improperly categorized. Sometimes, the examiner may be directed to determine if objections to any proofs of claim should be filed or whether causes of action have sufficient merit so that further legal action should be taken. The examiner may not subsequently serve as a trustee in the case. 11 U.S.C. § 321.
Examiners may not be appointed in subchapter V cases. 11 U.S.C. § 1181 .
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You Can Discharge Debt Through Bankruptcy
When you file for bankruptcy protection, a discharge from the court will relieve you of your obligation to repay your creditors for certain debts. As noted, once your debt is discharged, your creditors cannot contact you or attempt to collect the debt in any way. A discharge of your debt is also permanent and final for all unsecured debt you include in your bankruptcy filing.
The timing of your discharge will vary according to the type of bankruptcy you filed. A Chapter 7 bankruptcy discharge order can take as little as four months, while a Chapter 13 bankruptcy discharge can take three to five years.
If you are represented by a lawyer in your bankruptcy filing, you and your lawyer will each receive a copy of your debt discharge order. Your lawyer will help you understand what happens if you declare bankruptcy and which debts were discharged by your bankruptcy filing, as well as those you might still be obligated to pay.
A Fresh Start After Bankruptcy
Mei Ling and Matt are a married couple who rent a flat in Gosford NSW. Both worked full time until two years ago when Matt lost his job. Mei Ling now works part time earning less than $40,000 per year.
For two years they tried to survive on Mei Lings wage, struggling to make repayments on their overdue credit cards and loans. They ended up with unsecured debts of over $65,000.
The only assets they owned were a car worth $5,000 and general household goods .
The pressure from their creditors became too much to handle. Debt collectors and process servers were constantly calling on them. Their electricity was turned off a few times and they stopped answering phone calls because it always seemed to be bad news. Matts health was also suffering and he was treated for depression. Most nights Mei Ling would end up in tears thinking about their situation.
They finally decided to see a financial counsellor. There was no charge for this service. The financial counsellor looked through their finances and suggested they consider filing for bankruptcy.
Matt and Mei Ling went home and looked in detail at the AFSA website. They read all about their options and the consequences of bankruptcy. The AFSA website showed that they would be able to keep their car because it was worth less than the set amount. They read they could also keep their household goods. In the end, they decided that bankruptcy would be the best option for them.
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Chapter 7 Bankruptcy 101
Both individuals and businesses are allowed to file for Chapter 7 bankruptcy. These proceedings typically last between three and six months.
In a Chapter 7 bankruptcy proceeding, some of your property may be seized and sold to pay off some or all of your debts. This is known as “liquidation of property.”
However, as a benefit of this type of bankruptcy proceeding, any unsecured debts will be wiped out. In addition, there are certain types of property that cannot be sold in order to pay off your debts, such as the furniture in your home, your car, and your clothes.
Secured debts are treated differently than unsecured debts in a Chapter 7 bankruptcy proceeding. In a Chapter 7 bankruptcy proceeding, you have to make a choice between allowing the creditor to repossess the property that secures the debt, continuing to make payments on your debt to the creditor, or paying the creditor a sum equal to the replacement value of the property that secures the debt. In addition, some types of secured debts can be wiped out during a Chapter 7 bankruptcy proceeding.
Before you can file for Chapter 7 bankruptcy, you must be able to show that you are eligible to file for Chapter 7. To be eligible for Chapter 7, you cannot make enough money to be able to fund a Chapter 13 bankruptcy repayment plan. There are other requirements to be eligible to file for Chapter7 bankruptcy.
Will A Bankruptcy Actually Resolve My Debts
Bankruptcy does not resolve all debt indiscriminately. Some debts, such as student loans, cannot be discharged in bankruptcy. If you’re having trouble making payments toward debts that bankruptcy won’t cover, you should speak with your creditors to determine your options.
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Get A Free Debt Assessment
To start the bankruptcy process, first, you contact a Hoyes, Michalos & Associates licensed insolvency trustee who will assess your financial situation and explain the debt relief options available to you, including bankruptcy and alternatives to bankruptcy. After that, if you still want to declare bankruptcy, the trustee will help you complete several bankruptcy forms for signing. You are considered a bankrupt only when the trustee files the bankruptcy paperwork with the Official Receiver.
Rules pertaining to declaring bankruptcy and the bankruptcy process allow for filing a joint assignment. A joint bankruptcy assignment allows debtors, involved in a close financial relationship, to file for bankruptcy and to see their files dealt with as one file. This is available to debtors if their debts are substantially the same and the bankruptcy trustee believes it is in the best interest of the debtors and creditors.