Personal Bankruptcy Canada - The Bankruptcy Process

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An overview of the Canada bankruptcy process from selecting a bankruptcy trustee through discharge from bankruptcy in Canada.

An overview of the Canada bankruptcy process from selecting a bankruptcy trustee through discharge from bankruptcy in Canada.

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  • 1. Six Steps to Filing Bankruptcy in Canada
  • 2. What Can I Expect When Claiming Bankruptcy in Canada?
    • Bankruptcy may not be the only option
    • A bankruptcy can help you to start over if you are suffering from a serious financial setback
    • Bankruptcy can have a serious impact on your family finances for several years- so explore your other options
    • With professional help you can minimize the effects of bankruptcy and return to fiscal health more rapidly
  • 3. Step One: Obtain a Bankruptcy Trustee Once you have decided to file for bankruptcy in Canada, you should obtain the services of a qualified licensed bankruptcy trustee in your province
    • Trustees have been trained and licensed by the Office of the Superintendant of Bankruptcy (OSB)
    •  
    • Obtain a complete list of trustees at the OSB website or visit Personal Bankruptcy Canada for a list of trustees in the PBC Network
  • 4. Step Two: The Financial Assessment After choosing a trustee:
    • You will meet to complete a “Financial Assessment”
    • Your trustee will review your debt solution options and determine if claiming bankruptcy is in your best interest.
  • 5. Step Three: Filing the Bankruptcy Paperwork There are two important papers to be filed: The Assignment Document: a legal document that states your desire to turn your assets over to the trustee for use in the payment of your debts. The Statement of Affairs: a legal description of all of your assets and debts.   Before you sign either document, check them for accuracy . After they are signed, the papers are filed with the Official Receiver. When they are received, you are declared bankrupt. Once filed, these documents cannot be revoked without going to court.
  • 6. Each month you will be responsible for submitting the following documents to the trustee: Step Four: Fulfilling Your Monthly Obligations
    • Statement of Income and Expenses
    • Pay cheque Stubs
    • Proof of Additional Income
    • Your Monthly Contribution to the Bankruptcy Estate
  • 7. Step Five: Credit Counselling Once you have filed for bankruptcy, you must attend two credit counselling sessions Session 1: Master good money management skills such as budgeting, the appropriate use of debt, and recognize common financial danger signs Session 2: Form a healthy financial plan that will allow you to emerge from bankruptcy with the ability to enact your budgetary goals
  • 8. Step Six: The Bankruptcy Discharge
    • In some cases, the bankruptcy discharge is delayed. The two most common reasons for a lengthened term of bankruptcy include:
    • Being required to make surplus payments, which will extend your bankruptcy to 21 months. 
    • You’re filing a second bankruptcy , which will result in a discharge after 24 months if there have been no surplus payments and after 36 months if such payments were necessary.
    After claiming bankruptcy in Canada for the first time you can be discharged in as little as nine months
  • 9.
    • Deciding to file for bankruptcy in Canada is a difficult decision. Be sure you receive the support you need by retaining a qualified trustee in your province.
    • Discuss your situation openly and honestly. By carefully following your trustee’s advice, you will emerge from bankruptcy able to make a fresh financial start.
  • 10.
    • For Additional Information Visit www.PersonalBankruptcyCanada.ca