Bankruptcy

Bankruptcy is a legal proceeding that allows insolvent persons or businesses the opportunity to discharge all or most of their debt.

Usually a debtor will approach a Trustee in Bankruptcy to conduct a financial assessment, filing of legal papers with the court and notification of your creditors. During the bankruptcy period, most legal proceedings, like garnishment of wages, are stayed. If a debtor intends to keep certain items like a car or a house, they will have to re-purchase them from the bankrupt estate and continue to remit payments on them to secured creditors.

After nine months, consumers are usually eligible for their discharge from bankruptcy. A creditor may object to your discharge if they have valid grounds. The trustee may also postpone your discharge if you have not performed the statutory duties under the Bankruptcy and Insolvency Act, or, committed any offenses under the Act. Once the process is completed you receive your discharge from your debts.

In bankruptcy, you are entitled to retain certain assets; these are called exempt assets, which vary by Province. Depending on your income, you may be required to make payments into your estate (to the trustee) during the period of your bankruptcy which will usually be a minimum of nine months.