Bankruptcy is a legal process available to resolve your debts. It allows unfortunate debtors that ability to get out from under the unmanageable burden of debt and to “Start Fresh”. You must be insolvent, meaning you owe at least $1,000 and are unable to pay your debts as they come due.
The length of your bankruptcy will be dependent on your actual income and the size of your household. The process for a first-time bankrupt will take 9 or 21 months. For a second-time bankrupt, the process is 24 or 36 months.
Personal bankruptcy involves a number of duties you are required to perform over the term of your bankruptcy in order to be eligible for a discharge from your debts. These include:
• Report your income each month
• Attend two mandatory counselling sessions
• Assist Trustee in the administration of your estate
• Provide information for the filing of tax returns
Bankruptcy Vs Consumer Proposals
Depending on your income and household size a consumer proposal may be more practical for you. In order to determine whether personal bankruptcy or a consumer proposal might be the best option for you, consider these factors:
• Can you manage a monthly payment at minimum for 36 months and still maintain your usual living expenses without causing undue hardship?
• Can you reasonably assume continued employment or earnings in order to maintain the payments for the
duration of the proposal (up to a maximum of 5 years)?
• Are you retired with a fixed income or nearing retirement, or looking at a potentially long-term health related leave
• High debt load versus relatively low monthly earnings?
After further consideration of your age, employment and the size of your debts, a proposal may not be feasible and bankruptcy may be the right option.
Meeting with a licensed Trustee to discuss your financial situation will help you determine the best course of action to deal with your debt. For an assessment of your financial situation, please click below to access our questionnaire that can be submitted directly to our offices.