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Bankruptcy is a legal court process that gets rid of most unsecured debts and gives an otherwise hopeless debtor the opportunity for a fresh start.
People apply for bankruptcy when making payments on their debt-load has become difficult or impossible. At this point, some of their debts are usually with collection agencies and they face the stress of phone calls and letters demanding repayment. Creditors may be taking money directly from their pay checks or bank accounts. Their credit rating has slipped because of late payments, critical bills aren’t being paid, and the future seems bleak.
When you file for bankruptcy, a legal process regulated by the federal and provincial governments begins. You must use a licensed trustee who will assess your financial condition and determine whether you are insolvent. If you are deemed insolvent, the trustee will suggest whether filing for bankruptcy or a consumer proposal is the best solution for the situation.
At this point, the trustee will hold in trust any assets above and beyond what federal and provincial bankruptcy rules allow you to keep. The trustee notifies creditors of your status, and they must stop contacting you for repayment. The process of bankruptcy usually takes nine months, after which most unsecured debts (credit cards, loans, etc.) are discharged. You now have the chance to restart your life unburdened by heavy debt.
IN THIS SECTION
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- Why did my trustee tell me to file all outstanding tax returns?
- I’m declaring bankruptcy because of taxes. Is this allowed?
- Will I still owe my student loan after bankruptcy?
- I can’t afford to pay back my student loan and it’s been less than seven years since I left school-what are my options?
- How long does bankruptcy last?
- Can I keep my car during bankruptcy?
- Can I keep my RRSP during bankruptcy?
- Can I keep my home if I declare bankruptcy?
- Will I still be able to rent an apartment or home if I declare bankruptcy?
- Can I keep a credit card during bankruptcy?
- Is it okay to use a credit card if I am thinking about bankruptcy?
- Can I get a checking account after bankruptcy?
- I co-signed on a loan for someone who declared bankruptcy. What happens now?
- If I’m married and I file for bankruptcy, does it affect my spouse’s credit?
- If my spouse declares bankruptcy and I am listed on their credit cards, am I responsible for the debt?
- I am divorced and my ex has declared bankruptcy. Do I still owe for debts and credit cards that I co-signed with my spouse?
- If I file for bankruptcy, will it be noted on my spouse’s credit file?
- Will filing for bankruptcy affect my job situation?
- Who will find out about my bankruptcy?
- Can I get utility services (telephone, cable, hydro, gas, etc.) after bankruptcy?
- Can I keep any money if I declare bankruptcy?
- What is surplus income?
- Can I go to jail for not paying my debts?
- The collection agency is threatening to take me to court: can they do that?
- What happens if a collection agency takes me to court?
- I am behind on my debt payments; can a collection agency take my furniture, electronics, clothes, etc.?
- I am being harassed by a collection agency: what can I do?
- Can I stop a wage garnishment?
- How do I find out if someone is bankrupt?
- What is Chapter 7 bankruptcy?
- What is Chapter 13 bankruptcy?
- What happens if I live in both Canada and the U.S. and declare bankruptcy?
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