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Personal Bankruptcy

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What is Bankruptcy?

Bankruptcy is a legal proceeding used to wipe out your debts while allowing you to make a fresh financial start. While bankruptcy is often looked at in a negative way, it is often the best solution for someone who has no hope of ever paying back their debts.

What happens to my debts?

Wage garnishments, lawsuits and collection calls are immediately stopped upon filing for bankruptcy. Your creditors will be advised to stop contacting you and to deal directly with your Trustee. Once the bankruptcy process is finished (often in as few as 9 months), your debts are effectively wiped out. There are a small number of debts that are not released upon the completion of your bankruptcy. Your bankruptcy advisor will discuss this with you.

Do I qualify?

Bankruptcy is a legal process that provides the bankrupt with immediate relief from most legal actions started by creditors. It is intended to provide the honest but unfortunate debtor with the ability to start over by eliminating most, if not all, of his or her debts.

To qualify you must:

  • Owe at least $1,000
  • Be unable to meet your required payments as they come due; or
  • Own insufficient property to pay all of your debts.

How much does a bankruptcy cost?

The cost of your bankruptcy is mainly determined by the amount of your household income. Your Trustee must refer to specific government guidelines that will determine the monthly payment you are required to make to the Trustee. For most people there is a small fee that must be paid to the Trustee to cover the cost of administering your bankruptcy.

What can I keep?

In the majority of cases you will not lose your assets. Ontario law does allow a bankrupt person to retain:

  • Household furniture, appliances up to $13,150
  • Personal clothing of unlimited value
  • Tools of trade up to $11,300
  • One motor vehicle up to $6,600

Alternatives to Personal Bankruptcy

  • Consumer Proposal
  • Debt consolidation loans
  • Arrangements with creditors
  • Budget changes

If your problems are so serious that debt consolidation or other remedies are not practical, then a Consumer Proposal or personal bankruptcy may be an alternative.

How to proceed?

Contact the office nearest you for a free consultation