Bankruptcy in Canada

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    What is bankruptcy?

    Declaring personal bankruptcy is a debt relief solution that involves assigning/surrendering your property or assets to a Licensed Insolvency Trustee.

    The primary purpose of bankruptcy is for the debtor to clear their debts and start afresh.

    Our Licensed Insolvency Trustees (previously known as Trustees in Bankruptcy) at Harris & Partners Inc. know that filing for bankruptcy can be a daunting process, and one motivated by financial distress. Don’t navigate financial difficulty alone; contact us before you file for personal bankruptcy in Canada


    Is bankruptcy worth it?

    Debts can be overwhelming and can leave you feeling like there’s nothing left to do. While declaring bankruptcy should never be your first solution to getting out of debt, it is a viable way to help you out financially if you’re in over your head.

    While declaring personal bankruptcy will eliminate most of your debt, end phone calls from debt collectors and stop collection actions and garnishments, it will not solve all your problems if you don’t make changes to your financial habits.

    Declaring personal bankruptcy essentially gives you a second chance, but what you do with that second chance is up to you. During the bankruptcy process you will usually receive financial counselling, which gives you the tools needed to succeed and helps you examine possible lifestyle changes so that you don’t fall back into old bad habits and the recurring cycle of debt.


    What is exempt when declaring bankruptcy?

    The following items are exempt from seizure:

    • Personal effects no more than $5,650.00
    • Household goods no more than $11,300.00
    • Tools-of-trade no more than $11,300.00
    • Motor vehicles no more than $5,650.00
    • Home Equity no more than $10,000.00

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    What debts does bankruptcy help you get rid of?

    All debts factor into your personal bankruptcy. However, some debts will carry through after bankruptcy and require regular payments (e.g., child support or related debts).


    Are you eligible to file for bankruptcy?

    Anyone who owes at least $1,000.00, is 18 years of age or above, and is unable to meet obligations as they become due is eligible to file for bankruptcy.


    Declaring bankruptcy in Ontario and Alberta

    There are 5 steps to declaring bankruptcy in Ontario and Alberta:

    1. Contact a Licensed Insolvency Trustee (LIT)
    2. Gather your creditor, asset and income information and meet with the Trustee
    3. Sign the documents and an affidavit
    4. The Trustee will file the paperwork with the Office of the Superintendent of Bankruptcy of Canada
    5. Make your payments and attend your mandatory counselling sessions to receive a discharge from bankruptcy

    You can meet with a Licensed Insolvency Trustee (previously known as a Trustee in Bankruptcy) at Harris & Partners Inc. at one of our locations in Ontario or Alberta to review your financial situation.

    Your Licensed Insolvency Trustee will then advise you on your best options.

    Once you decide that personal bankruptcy is the best solution, the trustee will prepare the proper documents for you to sign and submit to the official receiver. At this point the bankruptcy is in effect. Your trustee then notifies all creditors of your official status.

    Following bankruptcy, you must:

    1. Fully disclose all assets and liabilities
    2. Attend two financial counselling sessions
    3. Inform the trustee of any material change of income
    4. Inform the trustee of any change of address
    5. Attend all meetings called by the trustee

    Frequently asked questions

    How long does bankruptcy last?

    If this is a first bankruptcy and all duties are performed fully (and there are no objections), the bankruptcy will be discharged in nine months.

    How long does bankruptcy stay on credit report?

    6-7 years. Bankruptcy will stay on your credit report for 6 years after the discharge date or 7 years after the date filed without a discharge date.

    How much does it cost to claim bankruptcy?

    The cost to file for bankruptcy depends on your total household income, the number of people in your household, and the equity you hold in non-exempt assets as set out by the government.

    After you file for bankruptcy in Canada, you are allowed to keep a portion of your income each month. If you earn over the limit, you are required by law to contribute half of that surplus income to your bankruptcy estate, which is then distributed to your creditors.

    For example, if a family of four brings in a total of $5000 net per month (after tax is paid), their surplus income in 2018 would be $1,002, and so they would owe $501 to their creditors each month.

    Your Trustee will calculate your surplus income obligation for you. As a result of this math being dynamically based on your household income, it is best that you reach out to an LIT to ask all of your questions and look at all available options, because sometimes a consumer proposal will be a better alternative for you.

    Are debt to revenue Canada includes?

    Harris & Partners Inc. is standing by and ready to help you through this stressful time. Our services are offered in many languages, from Greek to Cantonese. If you’re considering bankruptcy in the Greater Toronto Area, you can rely on us to help you!

    Can student loans be included when declaring bankruptcy?

    Yes. If the bankrupt person(s) finished studies more than seven years ago, the student loan will, in effect, be wiped out upon the bankrupt’s discharge. If studies ended fewer than seven years ago, the student loan will survive the bankruptcy (i.e. the loan must be repaid).

    Where are you based?

    Harris and Partners have offices across Ontario and Alberta, including: Markham, Barrie, Brampton
    Brantford, Calgary, Hamilton, Kitchener, North York, Oshawa, Pickering,St. Catharines and Toronto.

    We also operate in the following areas and surrounding areas: Waterloo, Lethridge, London, Windsor, Geulph, Kingston, Kanata, Milton, Greater Sudbury, Red Deer, Edmonton, Fort Mcmurray

    You can contact us here today for a FREE consultation and advice on personal bankruptcy.

    Get in touch with Harris and Partners

    Our Licensed Insolvency Trustees (previously known as Trustees in Bankruptcy) at Harris & Partners Inc. know that filing for bankruptcy can be a daunting process. Don’t go it alone; contact us before you file for personal bankruptcy in Canada. One common misconception is that only those who are out of money entirely can file for bankruptcy. This simply isn’t true. While you must show you are unable to pay bills before you file, there’s no reason to wait until you’ve run out of money completely.

    For residents across the country, personal bankruptcy doesn’t have to overwhelm you. Get answers to these commonly asked bankruptcy questions; contact us anytime if you don’t see answers to your questions below.

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