Bankruptcy is a last resort for debtors that are unable to make any other settlement arrangements with their creditors. It is a legal process regulated by the Bankruptcy and Insolvency Act. It provides immediate relief, halting the collection actions of all your creditors who may have a claim against you. It is designed to permit an honest but unfortunate debtor to have the majority, if not all, of his or her debts extinguished.
In order to declare bankruptcy, you must meet the following conditions:
Bankruptcy provides you with a stay of proceedings immediately upon filing. This means that your unsecured creditors cannot take any further action against you, including phone calls, legal actions or wage garnishments. Bankruptcy provides you with immediate relief from those stresses.
The most common way to become bankrupt is to make a voluntary assignment into bankruptcy. You would then provide the Licensed Insolvency Trustee with information such as your income, what your assets are and to whom you owe money. From there, the trustee can prepare the paperwork necessary for the assignment to be filed and registered. After you’ve signed the documents, and upon registration, the stay of proceedings is in place and the process to a fresh start begins. In most bankruptcies, you will be discharged between 9 and 21 months after filing, resulting in a debt-free fresh start.
To download our helpful bankruptcy information sheet click here.
Contact one of our trusted Licensed Insolvency Trustees to find out more about bankruptcy and whether it is the right option for you.