Once You Declare Bankruptcy
Once you declare bankruptcy you will be relieved from the harassment by those you owe money to and legal actions taken against you, meaning:
It is important to consider that while you may think being relieved from all of your debts is the quick and easiest way to get your finances back on track, filing for personal bankruptcy can have a significant impact on your life. Our Licensed Insolvency Trustees at Crowe MacKay & Company are committed to working with you to review all the options available, such as a consumer proposal, before deciding to declare personal bankruptcy.
To be eligible for bankruptcy, you must be insolvent. There are several factors to consider when determining whether you are insolvent, including:
Although you may consider yourself insolvent, there may be other options besides bankruptcy. Your first step should be to contact us and meet with one of our Licensed Insolvency Trustees in Vancouver or Surrey.
1. Getting to Know You
First, you will work with one of our trusted professionals, who will review your current financial situation. This free consultation includes reviewing your current income and expenses (child/spousal support, medical expenses, child care costs, etc.) and your assets.
2. Declaring Bankruptcy
Once we determine your financial state, we will file the appropriate forms with the Office of the Superintendent of Bankruptcy (OSB). Once the OSB has accepted the forms, you will be in bankruptcy and your creditors will be notified.
3. Selling of Assets
Your non-exempt assets will be assigned to us for resale to begin the repayment of debt to your creditors; this may include property acquired during your bankruptcy. Certain assets may be exempt from seizure, such as clothing, tools of the trade, cars, RRSPs, and your principal residence. This will be discussed during your initial consultation.
4. Surplus Income Payments
Depending on your income level, you may be required to make payments to us (your Trustee) for distribution to your creditors during your bankruptcy term.. These are called surplus income payments.
Surplus income may arise if your household income exceeds the prescribed standard set by the OSB. This calculation varies depending on your family size and income.
5. Term of Bankruptcy
Bankruptcy terms vary but typically range between 9 and 21 months for first-time bankrupts depending on whether or not they have surplus income.
Once you have declared personal bankruptcy, you must fulfill specific duties to get discharged. Some of the essential tasks are:
Upon completing all these duties, you will be eligible for automatic discharge. If you are not compliant with these activities or provide false information, may not receive your discharge from bankruptcy without additional requirements.
Some of the advantages of filing for personal bankruptcy include:
What Happens to My Income After Declaring Bankruptcy?
Your income is unaffected by bankruptcy, but you must report your monthly income and spending to us (your LIT) when you file for bankruptcy. You may also be required to make surplus income payments to the bankruptcy depending on the amount of your income. You are also required to notify your Trustee of any changes in your income during the proceedings.
What Happens to My Assets After Declaring Personal Bankruptcy?
When you declare personal bankruptcy, you agree to assign your non-exempt personal assets to the Trustee. Certain things are exempt from seizure, including clothing, tools of the trade and retirement plans.
What Happens to My Debts After Declaring Personal Bankruptcy?
Declaring personal bankruptcy will not always clear all your debts. Some debts, such as child support payments, some student loans and criminal fines, are not included in the bankruptcy.