Claiming Bankruptcy in Canada
Claiming Bankruptcy is simply a declaration of unmanageable debt. One is Insolvent when one is unable to meet financial obligations when payment is due. When you declare Bankruptcy in Canada, a Bankruptcy Trustee advises your creditors that you are insolvent.
Unmanageable debt can affect anyone. Almost 100,000 Canadians filed personal bankruptcy in 2006 alone.
No one plans to become bankrupt, but speaking with a Debt Management Counselor at bcbankruptcy.info can help you. There are many alternatives to claiming bankruptcy in Canada. Our Debt Management Counselors are experts in Bankruptcy laws in Canada and ways to avoid claiming Bankruptcy, throughout Canada.
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Will You Lose all Your Assets in a Bankruptcy?
No, you will not lose all of your assets. There are exemptions in place that allow you to keep basic property that you will need for your new beginning. Exemptions range from province to province, and can include such assets as your car, furniture, books and tools-of-trade, and clothing.
For example, a partial list of exempted assets in Alberta includes:
Food for a 12-month period.
Clothing up to a value of $4,000
Household furniture and appliances up to a value of $4,000
Motor vehicle to a value of not more than $5,000
Equity in a principal residence up to $40,000
How Long does Bankruptcy Last?
If this is your first time declaring bankruptcy, you will be discharged after nine months if no one opposes your discharge and you have no surplus income. You will then be free from the debts and restrictions covered in the bankruptcy.
If this is not your first time claiming bankruptcy, then you will usually be discharged in 24 to 36 months. However, if a creditor opposes the discharge it can extend beyond 36 months.
How will Bankruptcy Affect my Credit Rating?
Canada bankruptcies remain on credit reports for six years from the date of your discharge. A second personal bankruptcy will remain on your report for 14 years. This does not mean that you will not be able to get credit again. With smart control of your finances, you will be able to start rebuilding your credit once you are discharged from bankruptcy in Canada.
What is Surplus Income and how does it Affect Bankruptcy?
Surplus income is income you earn that is above a government-determined income level based on your household size. If your income exceeds this level, you must make additional payments to your bankruptcy trustee in Canada. Having a large amount of surplus income can also extend the time period of your bankruptcy in Canada.
What Happens if Someone Opposes the Bankruptcy Discharge?
A creditor, the Bankruptcy Trustee, or the Superintendant of Bankruptcy can oppose your discharge. The Trustee is required to oppose your discharge if you:
Did not pay the agreed amount of surplus income.
Filed for bankruptcy instead of pursuing a consumer proposal, when a consumer proposal was a better solution.
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