Once you are declared bankrupt, you have to surrender your property to a Licensed Insolvency Trust as a medium to repay your debts. However, specific laws dealing with bankruptcy allow you to keep some of your property, such as your house. This is because bankruptcy laws aim to give you a fresh start and want you to be a productive member of society.
Approach Licensed Insolvency Trustee
In case of bankruptcy, you need to approach a Licensed Insolvency Trustee (LIT) as they are federally regulated professionals who assist you throughout the bankruptcy process. To begin with, you can discuss your situation with the trustee and they will guide you as to what your next plan of action should be. After a discussion, if you decide to proceed with bankruptcy, you must follow this process:
● Share all your financial details with LIT
● Submit the required documents to your trustee
● Ensure the trustee submits all the paperwork further to Office of the Superintendent of Bankruptcy (OSB)
● Five days before starting, ensure your trustee sends your documents to all your creditors
● Once it is filed, there will be a ‘stay of proceedings’
Also, note that all your tax returns and the money you owe to the Canada Revenue Agency will be included in a bankruptcy, so you will no longer owe this amount after you complete the bankruptcy.
● Share all your financial details with LIT
● Submit the required documents to your trustee
● Ensure the trustee submits all the paperwork further to Office of the Superintendent of Bankruptcy (OSB)
● Five days before starting, ensure your trustee sends your documents to all your creditors
● Once it is filed, there will be a ‘stay of proceedings’
Also, note that all your tax returns and the money you owe to the Canada Revenue Agency will be included in a bankruptcy, so you will no longer owe this amount after you complete the bankruptcy.
Things that happen after declaring bankruptcy
● Stay of proceedings is applied
● LIT handles all your creditors
● LIT sells your assets, except for the ones excluded in the province
● Wage garnishments and lawsuits against you are stopped immediately
● Threatening letters and calls are terminated
● The length of your bankruptcy will be nine months if this is your first bankruptcy with no surplus income
● The length of your bankruptcy will be 24 months if this is your second bankruptcy with no surplus income
● If any creditors try to reach out to you for their payment, they are subjected to contempt of court
● LIT handles all your creditors
● LIT sells your assets, except for the ones excluded in the province
● Wage garnishments and lawsuits against you are stopped immediately
● Threatening letters and calls are terminated
● The length of your bankruptcy will be nine months if this is your first bankruptcy with no surplus income
● The length of your bankruptcy will be 24 months if this is your second bankruptcy with no surplus income
● If any creditors try to reach out to you for their payment, they are subjected to contempt of court
Duties you need to fulfil
● Attend credit counselling sessions to learn money management skills
● Pay your surplus income to your creditors on time
● Update your trustee with your financial status
● Attend the meeting of creditors when requested
● Be prepared to get examined by the representatives of OSB
● Pay your surplus income to your creditors on time
● Update your trustee with your financial status
● Attend the meeting of creditors when requested
● Be prepared to get examined by the representatives of OSB
Consequences of after completing bankruptcy period
Once you get the Notice of Discharge from bankruptcy, you will be free from your unsecured debts and begin life with a clean slate. Here are the following things that happen after completing bankruptcy:
● You can rebuild credit
● Get credit lenders, if required
● Your debt and properties will be discharged
● Implement the money management skills and budgeting you learnt in counselling
● Notation of bankruptcy remains on your credit bureau report (this is removed after six years)
Living a productive and carefree life is everyone’s aim, and we help you achieve this aim by freeing you from the trap of debts. Our experienced Licensed Insolvency Trustee will guide you with the advice that suits you the best.
● You can rebuild credit
● Get credit lenders, if required
● Your debt and properties will be discharged
● Implement the money management skills and budgeting you learnt in counselling
● Notation of bankruptcy remains on your credit bureau report (this is removed after six years)
Living a productive and carefree life is everyone’s aim, and we help you achieve this aim by freeing you from the trap of debts. Our experienced Licensed Insolvency Trustee will guide you with the advice that suits you the best.