Frequently Asked Questions

Bankruptcies in BC are governed by the federal Bankruptcy and Insolvency Act (BIA), which outlines the process for filing for bankruptcy and the procedures that must be followed.

Here’s a general overview of how bankruptcy works in British Columbia:

Initial consultation: If you’re considering bankruptcy in BC, the first step is to consult with a licensed insolvency trustee (LIT). An LIT is a licensed professional who can help you understand your options and guide you through the bankruptcy process.

Filing for bankruptcy: If you decide to file for bankruptcy, you’ll need to work with your LIT to prepare and file the necessary paperwork with the Office of the Superintendent of Bankruptcy (OSB). Once the paperwork is filed, you’ll be protected from creditor actions, including wage garnishments and collection calls.

Liquidation of assets: If you have assets that are not exempt, they will be sold to repay your creditors. Some assets, such as your primary residence, may be exempt.

Discharge: If you’ve met all the requirements of the bankruptcy process, you’ll be discharged from bankruptcy after nine months (or longer if it’s your second bankruptcy). Once you’re discharged, most of your debts will be forgiven, although some debts (such as child support and student loans) may not be dischargeable. Your Trustee will go over any non-dischargeable debts with you before you file for bankruptcy.

Filing for personal bankruptcy should not directly impact your corporation. Your corporation is a separate legal entity from you as an individual, and therefore your personal financial situation should not affect the corporation’s assets or liabilities. However, there are some potential indirect impacts that personal bankruptcy may have on your corporation:

1. If you are a sole proprietor and your business is not incorporated, your personal assets and liabilities are not separate from those of your business. In this case, filing for personal bankruptcy would also impact your business, as your business assets and liabilities would be included in the bankruptcy proceedings.
2. If you are a director or officer of the corporation, your personal bankruptcy may have an impact on your ability to continue in that role. Under the Canadian Bankruptcy and Insolvency Act, an undischarged bankrupt cannot be a director of a corporation without permission from the court.

While personal bankruptcy may not directly affect your corporation, it’s important to carefully consider the potential implications before filing for bankruptcy and to seek professional advice from a licensed insolvency trustee or a bankruptcy lawyer.

Yes, it is possible for one person in a marriage to file for bankruptcy in Canada without their spouse being required to file as well.

In Canada, each person is responsible for their own debts, even if they are married. This means that one spouse can file for bankruptcy without the other being impacted by the bankruptcy, if they do not have any joint debts with their partner.

If the couple has any joint debts, both spouses may be impacted by the bankruptcy. For example, if a couple has a joint credit card account and one spouse files for bankruptcy, the other spouse may still be responsible for paying off the outstanding balance on the account if they don’t also file bankruptcy.

As well, if the couple jointly owns any assets, such as a home or a vehicle, these assets may be impacted by the bankruptcy as well. The bankruptcy trustee will determine whether the asset needs to be sold to pay off the debts.

We recommend that someone seek the advice of a licensed insolvency trustee to fully understand the potential impacts of bankruptcy on their individual situation, including any impact it may have on their spouse or joint debts and assets.

Bankruptcy can discharge most types of unsecured debt, including income tax debt owed to the CRA. However, certain tax debts, such as those arising from fraud or misrepresentation, cannot be discharged through bankruptcy.

Additionally, if you have outstanding tax debt to the CRA, the CRA may have the ability to oppose your discharge from bankruptcy, especially if they believe that the tax debt was the result of intentional wrongdoing or fraud.

Even if your tax debt is discharged through bankruptcy, there may be consequences to your future tax filings. For example, if you owe money to the CRA for a previous tax year, you may not be able to claim certain tax credits in future years until that debt is paid in full.

Overall, if you have tax debt to the CRA and are considering bankruptcy, it’s important to speak with a licensed insolvency trustee who can provide you with personalized advice and guidance on how your specific tax debt will be treated in bankruptcy.

Yes, in BC you can claim bankruptcy if you own a home. However, the treatment of your home in bankruptcy will depend on several factors, such as:

Equity in the home: If you have significant equity in your home (i.e., the value of your home minus any outstanding mortgages or liens), it may be sold by the trustee to pay your creditors. However, if your equity is relatively small and is within the allowable exemptions, you may be able to keep your home.

Type of property: If your home is your principal residence, it may be exempt from seizure or sale in bankruptcy, up to a certain amount of equity. The amount of the exemption varies depending on the location of the property and other factors.

Secured creditors: If your home is subject to a mortgage or other secured debts, the creditors holding those debts may have a claim to your home, even if it is your principal residence. In such cases, you may be required to continue making payments on those debts to avoid foreclosure.

Treatment of your home in bankruptcy can be complex and depends on various factors. Therefore, it’s essential to consult with a licensed insolvency trustee who can provide you with personalized advice and guidance on how bankruptcy will affect your home and other assets.

The cost of a bankruptcy is usually paid by the individual who is filing for bankruptcy, rather than by the government or any other outside party. When you file for bankruptcy in Canada, you are required to pay fees to cover the cost of the bankruptcy process.

The fees associated with bankruptcy are set by the federal government and are regulated by the Office of the Superintendent of Bankruptcy (OSB). The current standard fees for filing for bankruptcy in Canada are:

• An administrative fee of $200 payable to the OSB.
• A trustee fee, which is based on a sliding scale and varies depending on your income, family size, and assets.

The trustee fee covers the cost of the trustee’s services, including the administration of the bankruptcy estate, counseling, and other related services. The trustee will provide you with a breakdown of the fees and costs associated with your bankruptcy, as well as information on how to pay those fees.

If you are unable to pay the bankruptcy fees upfront, you may be able to arrange a payment plan with your trustee. Additionally, some non-profit organizations may be able to provide financial assistance to individuals who are struggling with debt and cannot afford the cost of bankruptcy.

An absolute discharge refers to a court order that releases you from your obligation to repay your debts. It is the final stage in the bankruptcy process and allows you to start fresh financially.

To be eligible for an absolute discharge in bankruptcy in BC, you must have completed all of your required duties, which includes two credit counseling sessions, complete income and expense statements, and making all of your payments.

Once you’ve been granted an absolute you are officially released from your debts and you can begin to rebuild your credit and move forward with a fresh financial start.

A conditional discharge in Canada is a legal order that places certain conditions on an individual who has filed for bankruptcy before they can be released from their debts.

When someone files for bankruptcy, they are eligible for a discharge from their debts, which means that they will no longer be obligated to repay their creditors. However, in some cases, the court may impose certain conditions on the discharge (a conditional discharge). These conditions may include requirements such as completing financial counselling or making certain payments to their creditors over a specified period.

If someone who files bankruptcy meets all the conditions of their discharge, they will be granted an absolute discharge and be released from their debts. However, if they fail to meet any of the conditions, their discharge may be revoked, and they will continue to be responsible for their debts.

If you have an undischarged bankruptcy in BC, it means that you have filed for bankruptcy but have not been legally released from your debts. In other words, you are still considered bankrupt, and your assets may still be subject to seizure by your creditors.

In Canada, bankruptcy is a legal process that provides individuals who are unable to pay their debts with a fresh financial start. However, to be discharged from bankruptcy, you must complete all the requirements of the bankruptcy process, such as attending credit counseling sessions, completing income and expense statements, and making all of your monthly payments.

During the period of undischarged bankruptcy, you will have restrictions on your financial activities, such as limitations on obtaining credit or opening new accounts. Your credit rating will also be negatively affected, which can make it difficult for you to obtain credit in the future.

The specific conditions of a conditional discharge in bankruptcy can vary depending on the individual’s circumstances and the decision of the court.

Bankruptcies are administered by Licensed Insolvency Trustees (LITs), not bankruptcy lawyers. In Canada, bankruptcy lawyers are not legally authorized to administer government regulated debt relief solutions. Only licensed insolvency trustees (LITs) are regulated by the Office of the Superintendent of Bankruptcy and are licensed to help you file for bankruptcy or file a consumer proposal.

Filing for bankruptcy in Canada can have both short-term and long-term effects on your job and future credit. Here are some of the ways that bankruptcy can impact your employment and credit:

Employment: Filing for bankruptcy should not affect your current job, as employers in Canada are prohibited from discriminating against employees or job applicants based on their financial situation. However, if you work in certain professions, such as finance or law, your bankruptcy may be subject to additional scrutiny and could affect your ability to maintain your professional license or certification.

Credit: Filing for bankruptcy will have a negative impact on your credit score, which is a measure of your creditworthiness. The bankruptcy will remain on your credit report for up to seven years, which can make it difficult to obtain credit or loans during that time. However, bankruptcy can also be a fresh start, as it eliminates most unsecured debts and allows you to rebuild your credit over time.

Future borrowing: If you file for bankruptcy, you may find it more difficult to borrow money in the future. Lenders will view you as a higher risk borrower, which means you may be offered higher interest rates or be required to provide additional collateral. It is possible to obtain credit after bankruptcy, but it may take time and effort to rebuild your credit and demonstrate your creditworthiness.

In British Columbia, when you file for bankruptcy, certain assets may be sold to help repay your debts. There are called non-exempt assets: If you have assets that are not covered by exemptions, they may be seized and sold to pay off your creditors. This could include investments, non-essential vehicles, recreational vehicles, and other non-essential assets. However, there are certain exemptions that protect certain assets from seizure. Here are some of the assets that may be exempt from seizure in a bankruptcy in BC:

• Basic household furnishings and appliances, up to a certain value.
• Clothing and personal effects, such as jewelry and wedding rings.
• One motor vehicle, up to a certain value.
• Tools and equipment used for work, up to a certain value.
• Pensions and Registered Retirement Savings Plans (RRSPs), up to a certain value.
• Equity in your principal residence, up to a certain value.
• Some forms of life insurance policies and annuities.

It is important to note that the value of these exemptions is subject to change and may vary depending on your individual circumstances. Additionally, assets that are not exempt may be seized and sold to repay your debts, although this is not always the case.

Personal bankruptcy is a legal process available to individuals in Canada who are unable to pay their debts. It is governed by the Bankruptcy and Insolvency Act (BIA), which sets out the rules and procedures for filing for bankruptcy.

To file for bankruptcy, an individual must work with a licensed insolvency trustee (LIT) who will help them prepare and file the necessary paperwork with the Office of the Superintendent of Bankruptcy (OSB).

Once the bankruptcy paperwork is filed, the debtor is protected from most creditor actions, including wage garnishments and collection calls.

Filing for bankruptcy will have a negative impact on your credit rating, and the bankruptcy will remain on your credit report for 6 to seven years after you are discharged from your bankruptcy.

A bankruptcy trustee is a licensed professional who is authorized by the federal government to administer bankruptcies and other insolvency proceedings under the Bankruptcy and Insolvency Act (BIA).

A bankruptcy trustee is also known as a Licensed Insolvency Trustee (LIT). They play a crucial role in the bankruptcy process by providing debtors with information about their options and guiding them through the bankruptcy process. They also act as a liaison between the debtor and their creditors.

Here are some of the key responsibilities of a bankruptcy trustee in Canada:

1. Assessment of the debtor’s financial situation: A bankruptcy trustee will assess the debtor’s financial situation and determine if bankruptcy is the most appropriate option.
2. Preparation and filing of bankruptcy paperwork: If the debtor decides to file for bankruptcy, the trustee will prepare and file the necessary paperwork with the Office of the Superintendent of Bankruptcy (OSB) on the debtor’s behalf.
3. Administration of the bankruptcy estate: The trustee will take possession of the debtor’s non-exempt assets and sell them to repay the debtor’s creditors. They will also distribute any remaining funds to the debtor.
4. Oversight of the meeting of creditors: The trustee will organize and preside over the meeting of creditors, where creditors can ask the debtor questions about their financial situation.
5. Provision of financial counseling: The trustee will provide the debtor with financial counseling to help them understand how to manage their finances and avoid future debt problems.

Overall, a bankruptcy trustee plays a critical role in the bankruptcy process in British Columbia. They are a licensed and regulated professional who is there to help debtors understand their options and guide them through the bankruptcy process

Filing for bankruptcy in BC is confidential and private. In most cases, when you file for personal bankruptcy, only your Licensed Insolvency Trustee, the Office of the Superintendent of Bankruptcy (OSB), your creditors and credit reporting agencies will know about the proceedings.

In many cases, you will not have to go to court for bankruptcy proceedings. If you are eligible for an automatic discharge, there is no court hearing necessary. You will be released automatically, and your trustee will send you a copy of your discharge papers. You can qualify for an automatic discharge if you complete all your bankruptcy duties and no one opposes the discharge. On the other hand, if you do not qualify for an automatic discharge, you may have to appear in court with your trustee to review the discharge before it is finalized.

Following notification of your bankruptcy, most credit card companies will cancel your card, so you can no longer use them. This means you will not be able to keep current credit cards after you file and may have to wait several months before you’re eligible for another. However, you can apply for a pre-paid credit card for situations where a credit card is necessary.

Yes, it is possible to get credit cards after bankruptcy. You may want to start rebuilding your credit by applying for a secured credit card, which requires a cash deposit that serves as collateral for the credit limit. This type of credit card can help establish a positive payment history and improve your credit score over time.

You may also want to consider applying for credit cards designed for those with bad credit. They often come with higher interest rates, but these types of credit cards can also help you rebuild your credit if you use them responsibly and make your payments on time.

It is important to be cautious and only apply for credit that you can realistically manage and pay back in full each month. You may also want to check your credit report regularly to make sure that all information is accurate and up-to-date.

In Canada, there is no limit to the number of times you can declare bankruptcy. However, the consequences of declaring bankruptcy multiple times can become more severe each time.

If you declare bankruptcy for a second time, you Bankruptcy will last between 24-36 months, depending on whether you have surplus income. You will not qualify for an automatic discharge.

Not only will your second bankruptcy last longer, but your credit rating will also be negatively impacted. A second bankruptcy can last up to 14 years on your credit report compared to a first-time bankruptcy which stays on your record for 6 years.

Yes, there are alternatives to bankruptcy that may be worth considering before deciding to declare bankruptcy. Here are a few common alternatives:

Debt Consolidation: This involves combining multiple debts into a single loan with a lower interest rate. This can make it easier to manage debts and reduce the amount of interest paid over time.

Consumer Proposal: This is a legally binding agreement between an individual and their creditors to pay off a portion of their debts over a set period of time. This can help to reduce the overall amount of debt owed while avoiding bankruptcy.

Credit Counselling: This involves working with a credit counsellor to develop a debt repayment plan and improve financial management skills. This can help to reduce debt and prevent bankruptcy.

Negotiating with Creditors: In some cases, it may be possible to negotiate with creditors to reduce the amount owed or work out a payment plan. This can help to avoid bankruptcy and resolve debts without legal intervention.

All bankruptcy fees are regulated by the federal government and are consistent from LIT to LIT. The fees do vary depending on each individual’s unique financial situation. You can discuss what the costs of filing for bankruptcy would look like for you with a LIT during your free, initial consultation.

Not always. While there are some cases where bankruptcy can clear all debts, that is usually not the case. Some debts cannot be included in bankruptcy, such as child support payments, criminal fines, etc. In addition, debts you accrued through secured creditors receive special treatment, even when you file bankruptcy. A secured creditor is one that has a right to a specific asset. This can include creditors that financed your car or home. The effects of bankruptcy on secured debts will vary in every situation. A Licensed Insolvency Trustee will be able to help you understand the process better.

Unless your spouse is a joint owner and has co-signed your debt, there should be no impact to your spouse if you declare bankruptcy. The unpaid debts will not transfer from one spouse to the other.

However, if your spouse is a co-signer, co-borrower or co-cardholder and you file bankruptcy, your spouse would remain responsible for repaying the full balance of the joint debt.

Filing for bankruptcy in BC will eliminate nearly all types of debt, including (but not limited to):

• Credit card debt
• Lines of credit & overdraft debt
• Payday loans
• Medical bills
• ICBC debts
• Income tax debts (income taxes, GST, etc.)
• Student loan debt (federal, provincial & private)
• Secured debt shortfalls if you decide to end the commitment (vehicle shortfall, mortgage foreclosure)
• Personal loans

Bankruptcy will eliminate most of your debts, but some debts are not eligible. Those debts include:

• Alimony or child support payments
• Court-imposed fines
• Debt incurred by misrepresentation (fraud)
• Debt for damages imposed by Civil Court for intentional bodily harm, sexual assault, or wrongful death
• Student loans (if the bankruptcy occurs prior to 7 years since your last date of study)

If you declare personal bankruptcy in Canada, your creditors will be automatically notified and will be forced to stop contacting you. In addition, they will have to stop all legal actions against you, including pending lawsuits and wage garnishments. However, secured debts, like mortgages and car loans, may remain active, meaning you must keep up with these payments or risk losing the asset. Most of your other assets will be handed over to a Licensed Insolvency Trustee as part of the process.

When you file for bankruptcy, you agree to hand over many, if not all, of your personal assets in return for debt relief. However, there are some items that you will be able to keep. These items are referred to as bankruptcy exemptions because they are exempt from seizure. Exempt items will vary from situation to situation but may include clothing, household furnishings, some land, sentimental items, pensions and retirement plans, and more. It’s important to know that you will be surrendering some of your assets when you file for bankruptcy. However, the process will help you get out of debt and start over.

Filing for bankruptcy should not impact your home, car, or any other secured debts, as long as you continue to make payments and there is little-to-no equity in your secured assets.

In Canada, bankruptcy can clear most types of tax debts owed to the Canada Revenue Agency (CRA), with some exceptions.

The Bankruptcy and Insolvency Act (BIA) provides that certain tax debts are included in the category of unsecured debts that can be discharged in bankruptcy. However, there are some types of tax debts that are not eligible for discharge under the BIA. These include:

• Tax debts arising from fraud or misrepresentation
• Tax debts incurred after the date of bankruptcy
• Tax debts for which you have not filed a tax return

If your tax debt is eligible for discharge in bankruptcy, it will be included in your bankruptcy estate and administered by your licensed insolvency trustee. Any tax debts that are not eligible for discharge will remain outstanding after your bankruptcy is complete. Your Trustee will let you know if there are any tax debts or otherwise that cannot be included in your bankruptcy.

The Bankruptcy Assistance Program (BAP) is a program operated by the Office of the Superintendent of Bankruptcy (OSB) in Canada. The OSB is a federal agency responsible for overseeing the administration of bankruptcy and insolvency matters in Canada.

The BAP  is designed to help individuals who are experiencing financial difficulties and considering filing for bankruptcy. The program provides free, confidential financial counseling and education to debtors, as well as referrals to other resources that may be helpful.

The program is staffed by licensed insolvency trustees (LITs), who are professionals trained in bankruptcy and insolvency matters. LITs can provide debtors with information on the bankruptcy process, alternatives to bankruptcy, and other options for resolving their financial problems.

The Bankruptcy Assistance Program is free but there are certain costs associated with filing for bankruptcy that are not covered by the program. For example, individuals may need to pay fees to their licensed insolvency trustee (LIT) who assists them in filing for bankruptcy. These fees are set by the federal government and vary depending on the amount of debt and complexity of the case.

Overall, the goal of the Bankruptcy Assistance Program is to help debtors make informed decisions about their financial future and find the best possible solution for their situation.

The Bankruptcy and Insolvency Act provides protection for your RRSPs. You’re allowed to keep your RRSPs if you file a personal bankruptcy in BC, except for amounts contributed in the 12 months prior to your date of bankruptcy.

If you feel that your debt is becoming a problem, the first step you want to take is to analyze your spending and determine where you are spending your money and how your debt keeps increasing. Are you using your credit to make a lot of purchases? Are you only making the minimum payments on your credit card?

If you can identify these problem areas, you may be able to regain control of your debt on your own by spending less and putting more each month toward debt repayment. However, if your problems persist and you are struggling to make monthly payments, it may be time to talk to a Licensed Insolvency Trustee about your options. A professional will be able to help you navigate the issues and determine if a consumer proposal or bankruptcy is your best solution to get out of debt.

In order to save yourself from spiraling financial problems, it’s important to recognize that you’re in trouble early. This will help you act fast and prevent the problem from becoming even worse. As you get further and further into trouble, it can be difficult to recognize the signs, as they can quickly become a normal part of life. You may want to seek financial help if you are experiencing any of the following:

• Your creditors have begun garnishing your wages to collect on your outstanding debts.
• You are hesitant to answer your phone because you are concerned it is a debt collector calling.
• Your creditors have threatened to sue you, repossess your property, or hire a collection agency to get their money back.
• You have to borrow money from family or friends to cover expenses between paycheques.
• You are beginning to use credit cards every month as a way to cover necessary expenses, rather than using them only for convenience.
• You are only able to pay one creditor each month because you don’t have enough money to pay multiple.
• You are receiving second notices about overdue accounts.
• One or more of your utilities has been cut off due to outstanding bills.

No, you cannot go to jail for not paying debt Canada but not paying back your debts does come with consequences.

If you owe money to someone and they take legal action against you, a court can issue a judgment against you, which can result in the garnishment of your wages or bank accounts, a lien to be placed against property that you own, or a judgement that requires you to make voluntary payments. Additionally, if the debt is related to a criminal offense, such as fraud, then you could face criminal charges, but not for the debt itself.

It’s best to speak with a Licensed Insolvency Trustee to learn about your legal rights as a consumer, the rights of your creditors, and the debt forgiveness solutions that are available to manage the debt you’re struggling to pay down.

Yes, a creditor can garnish your bank account in Canada if they obtain a court order. This means that the creditor would need to take legal action against you and obtain a judgment before they can garnish your bank account.

Once the creditor has obtained a judgment against you, they can apply to the court for a garnishment order, which would allow them to seize funds from your bank account to fulfill the debt. The amount that can be garnished depends on the type of debt and the court’s decision.

Certain funds may be exempt from garnishment, such as funds received from government sources, child support payments, and wages that fall below a certain threshold.

If you are facing a garnishment order or other debt collection actions, it’s important to seek the advice of a Licensed Insolvency Trustee to explore your options for resolving the debt and protect your rights.

In Canada, if your house is foreclosed upon and sold, any proceeds from the sale that are left over after the mortgage and any other liens on the property are paid off would go to you as the homeowner. However, if the sale proceeds are not enough to cover the outstanding debt, you may still be responsible for paying the remaining balance.

If you’re facing foreclosure, there may be other options available to homeowners who are struggling with their mortgage payments. If you are facing financial difficulties, you may want to speak with a mortgage professional, a credit counseling service, or a legal professional to explore your options and protect your rights.

An R7 credit rating on an individual’s credit report signifies that they have entered a Consumer proposal or other debt repayment management plan.

Although an R7 credit rating will remain on someone’s credit report for 3 years after the proposal is completed, you can begin rebuilding your credit as soon as the proposal has been completed.

Insolvency and bankruptcy are both related to a person’s inability to pay off their debts, but they have different legal meanings and implications.

Insolvency refers to a financial situation in which an individual or business is unable to pay off their debts as they become due.

Bankruptcy, on the other hand, is a legal process that provides individuals and businesses with a fresh financial start by eliminating most of their debts.

Basically, insolvency is a financial state of being unable to pay debts, while bankruptcy is a legal process to eliminate debts.

In general, spouses are not responsible for each other’s debt in British Columbia, unless they have co-signed or guaranteed the debt. In some cases, if you and your spouse have joint debts, you may be held responsible for the full amount of the debt if your spouse is unable to pay. Joint debts are debts that both you and your spouse have signed for together, such as a joint credit card account, line of credit, or a joint mortgage.

If you received the Canada Emergency Response Benefit (CERB) and are unable to repay it, you should contact the Canada Revenue Agency (CRA) as soon as possible to discuss your situation and explore your options.

If you are unable to repay the full amount of the CERB payment, you may be able to negotiate a voluntary repayment plan with the CRA. The CRA may also consider your ability to pay and your financial situation when determining the repayment plan.

If you do not repay the CERB payments that you were not eligible for, the CRA may take legal action to recover the debt. This may include garnishing your wages, seizing your assets, or taking legal action to collect the debt.

A Licensed Insolvency Trustee can help you explore other debt solutions if you can’t pay back CERB.

No, student loans do not go away after 7 years in Canada. Student loans are considered a form of government debt, and they can be pursued by the government or its collection agencies until they are paid off in full.

However, if it’s been 7 years since your last date of study, your student loan debt can be eliminated by filing a Consumer Proposal or personal bankruptcy in BC.

Yes, there is a statute of limitations on debt in British Columbia (BC), Canada. The Limitation Act of BC sets out the time limits for creditors to commence legal action to collect a debt.

In BC, most debts have a basic limitation period of two years from the date that the debtor last acknowledged the debt, either by making a payment or by acknowledging the debt in writing. After this period has elapsed, the creditor can no longer sue the debtor for the debt.

However, it’s important to note that there are some exceptions to the two-year limitation period. For example, the limitation period for a debt secured by a mortgage or other security interest in property is generally 10 years, and there is no limitation period for certain types of government debt.

It’s also important to note that making a payment or acknowledging a debt in writing can restart the limitation period, so it’s important to be aware of the implications of any communication or payment related to the debt.

There is no single “Canadian Debt Forgiveness Program” that applies to all types of debt. However, there are several debt relief programs and options available to Canadians who are struggling with debt, including:

Consumer Proposal: A consumer proposal is a legally binding agreement between you and your creditors to pay off a portion of your debts over a period of time. It is an alternative to bankruptcy and can provide debt relief and protection from creditors.

Bankruptcy: Bankruptcy is a legal process that allows individuals who cannot pay their debts to get a fresh start by eliminating or reducing their debts. However, it has serious consequences and should only be considered as a last resort.

Debt Consolidation: Debt consolidation involves combining multiple debts into a single loan or payment, often with a lower interest rate. This can make it easier to manage your debts and reduce your overall monthly payments.

Debt Management Program: A debt management program is a structured repayment plan negotiated with your creditors through a credit counseling agency. It can provide lower interest rates and a single monthly payment to help you pay off your debts.

It’s important to note that each of these programs has its own eligibility requirements and potential consequences. If you are struggling with debt, it’s important to consult with a Licensed Insolvency Trustee to explore your options and protect your rights.

A Notice of Determination is a document that is issued by the Canada Revenue Agency (CRA) to notify an individual or business of their tax debt. When the CRA determines that a taxpayer owes taxes that they cannot pay, they may issue a Notice of Determination.

In the context of insolvency, a Notice of Determination may be issued by the CRA to notify an individual or business that they are insolvent and that the CRA intends to collect their tax debt through legal action. This notice typically includes information on the amount of tax debt owed, the date by which the debt must be paid, and the legal options available to the taxpayer.

If you receive a Notice of Determination, it’s important to act quickly to address the situation. Failing to respond to a Notice of Determination can result in legal action by the CRA, such as wage garnishments or asset seizures. You may want to seek the advice of a licensed insolvency trustee or a tax lawyer to help you understand your legal options and develop a plan to address your tax debt.

If you need help with your growing debt problems, the best solution is to go to a Licensed Insolvency Trustee for assistance. They will be able to assess your current financial situation by evaluating your debt amount and income. Licensed Insolvency Trustees are the only professionals that can help you become debt free through a consumer proposal or filing for bankruptcy. Smythe Insolvency is a Licensed Insolvency Trustee firm that can help you through this process from beginning to end.

Insolvency is a term used in bankruptcy law to describe a situation in which a person has a high amount of debt. You are considered insolvent if your debts exceed the value of your assets or if you are unable to pay your debts on time. Insolvency is a more formal term that is used in legal proceedings and may not necessarily mean the person has to file bankruptcy. Those who are considered insolvent may also be able to use a consumer proposal to get out of debt.

A Licensed Insolvency Trustee (LIT) is a professional who is authorized to provide advice and services to people and businesses facing debt problems. These professionals are federally regulated to ensure they are providing their clients with the help and guidance they need. Meeting with a LIT will help you gain a better understanding of your situation, allowing you to make informed decisions about how to deal with your financial situation. A LIT will help you in the following ways:

• Assist you in deciding which option is the best to help you handle your debt
• Deal directly with creditors on your behalf
• Oversee the sale of your assets in a bankruptcy and the distribution of the proceeds to your creditors
• Prepare and file all paperwork for consumer proposals and bankruptcies

One of the alternatives to bankruptcy is filing a consumer proposal. This process allows you to propose an alternative repayment plan which your creditors can then choose to accept or reject during a voting process. In most cases, a consumer proposal allows you to pay only a percentage of your debts owed. Creditors are likely to agree to the terms because they’ll recover more than if you file bankruptcy. Some of the main differences between a consumer proposal and a bankruptcy include:

• You’ll Set Your Payments: With the help of your LIT, you’ll propose a monthly payment amount that will be shared among your creditors, and they’ll have an opportunity to negotiate it. This is different than a bankruptcy where your monthly payment amount will be set by the court.
• Your Assets Are Protected: During a bankruptcy, you often have to surrender your assets in return for the discharge of your debts. However, you won’t have to do this in a consumer proposal. Rather, you’ll pay your creditors a set monthly payment that you can afford.
• You Can Pay It Off Early: Bankruptcies have a pre-determined time frame for completion. But consumer proposals can be paid off early if you have the funds to do so. This allows you to recover from your debts faster.

If you know you need to take legal action to help yourself get out of debt, you may now be wondering whether you should choose to file a bankruptcy or a consumer proposal. However, it’s important to know that in some cases, you may not have the choice between the two. There are certain eligibility requirements for each option. For example, you may not be able to file a consumer proposal if your debt is too high and you’re not earning enough money to cover the monthly payments, making bankruptcy the only option. Our team can help you determine which options you are eligible for. In most cases, a consumer proposal is a good idea if you have a steady income and can afford to make a monthly payment. However, if you cannot make payments, bankruptcy may be your only option, and you may have to surrender your assets to pay back your creditors.

Filing for bankruptcy and consumer proposals only work to forgive unsecured debts. Unsecured debt includes any type of debt that is not secured by collateral. This includes credit card debt, personal loans, and unsecured lines of credit. Unfortunately, secured debts, or debts that give the creditor claim to the asset, cannot be forgiven by bankruptcy or consumer proposals. Secured debts include your mortgage or vehicle loan, where the asset acts as collateral for the creditor. Even if you file for bankruptcy, unsecured creditors can attempt to collect the collateral if you do not make payments.

You can request a copy of your credit report by calling a credit bureau, like Equifax or TransUnion, and following the telephone prompts. In order for your request to be accepted, you must first confirm your identity by answering a series of personal and financial questions. You may also need to provide your Social Insurance Number or your credit card number. Once your identity is confirmed, you will receive your credit report in the mail.