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.

  Consumers are usually eligible for their discharge from bankruptcy anywhere from nine months to twenty one months after the date of filing. The time you remain in bankruptcy will ultimately depend on many factors such as your family income, your payment requirement as well as the size and types of debts that were in your bankruptcy. When you meet the Trustee for an initial consultation the criteria regarding the timing of your discharge will be explained to you in detail.

  A creditor may object to your discharge if they have valid grounds. The trustee may also oppose 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 a 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 monthly payments into your estate (to the trustee) during the period of your bankruptcy which will usually be a minimum period of twenty one months.