The Bankruptcy and Insolvency Act of Canada requires that a licensed Trustee under the Bankruptcy and Insolvency Act administer the bankruptcy and guide the debtor through this process. The process can be rather complicated and you want to ensure you have the skills of a professional on your side. Let Keith G. Collins Ltd. help you step-by-step during your personal bankruptcy in Winnipeg, Manitoba and Northwestern Ontario.
How Does Personal Bankruptcy Work?
Each and every bankruptcy process is unique. However, the following information sets out in general terms what to expect.
First, contact a Licensed Insolvency Trustee such as Keith G. Collins Ltd. The Trustee will review your financial situation and discuss possible options with you. If, after a complete assessment, you determine that bankruptcy is the best alternative, the Trustee will prepare the necessary forms and file them with the Office of the Superintendent of Bankruptcy.
Your Trustee will review your assets to determine which assets, if any, are to be liquidated to contribute to your bankrupt estate and which assets are exempt from seizure by the Trustee. Some examples of exempt assets include: household furnishings up to a maximum value of $4,500; one motor vehicle required for employment worth up to $3,000 in excess of any loan on which it is held as security; tools of trade which are required to earn income not exceeding a value of $7,500.00; registered retirement savings plans and locked-in pension plans. In addition to this list, there are other assets which may be exempt from seizure.
Your Trustee will act as the intermediary between you and your creditors and will notify all your creditors of your bankruptcy. At the time the bankruptcy is filed, you will stop paying your unsecured creditors and almost all actions against you, such as lawsuits and collections, will stop. Depending on your individual circumstances, you may be required to make payments to your Trustee during the period of the bankruptcy.
You will be required to attend two financial counselling sessions. At Keith G. Collins Ltd., these financial counselling sessions are provided on an individual basis. A review of the factors that led to your insolvency and a discussion of ways to avoid future financial difficulties is the focus of these sessions. Additional financial counselling can be arranged if requested.
In addition, you are required to keep records of your monthly income and expenses and provide them to your Trustee.
After the required criteria have been met, you will receive a discharge from bankruptcy.
How Long Does Bankruptcy Last?
In most cases, if you have not been bankrupt before and were not required to make surplus income payments, you will receive an automatic discharge after nine months. If you are a first-time bankrupt who is required to make surplus income payments, you are eligible for an automatic discharge after 21 months.
If this is your second bankruptcy, and if payments from surplus income are not required, in most cases automatic discharge takes place 24 months after the date of the bankruptcy. Second-time bankrupts with surplus income, however, are required to contribute part of the surplus to their estate for 36 months, after which they are eligible for an automatic discharge.
In some cases the automatic discharge may be opposed and, in that event, the Trustee will arrange for and attend the discharge application which will be heard by the Court.
If you have been bankrupt on more than two occasions, or are a personal income tax debtor as defined by the Bankruptcy and Insolvency Act, you will not be entitled to an automatic discharge and, instead, an application to the Court will be required to obtain your discharge. The discharge may be granted or granted on conditions. In rare cases the discharge may be refused. The Trustee will arrange the discharge application and attend the hearing.
How Much Does Bankruptcy Cost?
The cost of administering a bankruptcy depends on, and may be paid from, the assets available to your bankrupt estate. Depending on your income and expenses, you may be required to make monthly payments of surplus income to the Trustee.
For a more individualized answer, we can advise as to the cost of your bankruptcy during the free initial consultation.
How Will Bankruptcy Affect My Credit Rating?
Most people considering bankruptcy already have an impaired credit rating; therefore the declaration of bankruptcy does not usually have a significant effect. Financial institutions consider many factors when deciding whether to provide future credit; bankruptcy is only one of these factors.
Our credit counselling includes effective budgeting and shopping skills, debt management and suggestions on how to rebuild a positive credit rating.
After Bankruptcy, Are All of My Debts Discharged?
Personal bankruptcy eliminates most debts; however, pursuant to the Bankruptcy and Insolvency Act, certain debts are not discharged. The most common of these debts are:
If you would prefer, you can complete our First Step form.