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Personal Bankruptcy in BC: Get Immediate Relief For Your Debt
Filing for bankruptcy is not the only debt relief option, but sometimes it is the best solution to a debt problem.
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What is Personal Bankruptcy?
Personal Bankruptcy is a legal process regulated by the Bankruptcy and Insolvency Act in Canada. It provides immediate relief for an individual burdened with a crushing debt-load. It is designed to provide financial protection for debtors who can no longer afford to repay their debts.
Filing for bankruptcy is not the only debt relief option, but sometimes it is the best solution to a debt problem.
Bankruptcy is generally for those who cannot pay their debts in a reasonable period of time, or who have determined that other debt settlement options, such as filing a Consumer Proposal, are not viable solutions for them.
To file a Bankruptcy or a Consumer Proposal in Canada you must seek the assistance of a Licensed Insolvency Trustee.
Who can file for Personal Bankruptcy?
An individual who:
- owes creditors at least $1,000 and;
- Is unable to make regular payments to creditors as they fall due; and, or
- Whose property, at a full evaluation, is insufficient to enable payment of all debts, and
- Resides, does business, or has property in Canada.
….can file for Bankruptcy with the assistance of a Licensed Insolvency Trustee in BC.
What similarities are there between a Bankruptcy and a Consumer Proposal?
Both a Bankruptcy and a Consumer Proposal:
- Are governed by the Bankruptcy and Insolvency Act (BIA) in Canada and must be implemented with the assistance of a Licensed Insolvency Trustee who will act as an Administrator under the proposal or Trustee in the bankruptcy.
- Take advantage of the Stay of Proceedings under the BIA – this means that all collection and garnishments cease upon filing.
- Result in interest charges no longer being incurred (does not apply to secured loans or non-dischargeable debts)
- Requires you to make full disclosure to your LIT of you family income and expenses, and the value of assets you own, as of the date of filing.
- Does not affect the rights of secured creditors.
- Automatically includes All creditors anywhere in the world – there is no “picking and choosing.”
- Are Legally binding on all creditors.
- Require each debtor to attend two counselling sessions.
When is my bankruptcy over?
For a first time bankrupt, your are eligible for a discharge at the end of 9 months from the date of your bankruptcy if you have completed all of your Bankruptcy Duties.
If you had Surplus Income payments due in the first 9 months, your bankruptcy will be extended to 21 months.
For a second time bankruptcy, the first eligible automatic discharge date will be 24 months after the initial filing, or if you have Surplus Income, after 36 months.
What Bankruptcy Duties are expected during the Personal Bankruptcy?
You must fulfil all the following Bankruptcy Duties while you are an un-discharged bankrupt:
- Reveal and turn over to the Trustee all your assets in your possession or control;
- Make available to the Trustee all goods and records relating to personal affairs when requested;
- Attend at the Office of the Official Receiver if and when required, to be examined under oath as to the facts relating to the bankruptcy.
- Provide a complete statement of assets and liabilities, including creditors’ names, addresses, account numbers, invoices, and amounts. Where additional bills or legal documents are received by you, they should be forwarded to the Trustee. If assets or debts were accidentally omitted, the Trustee must be informed promptly;
- Inform the Trustee of the details of all property disposed of during the 12 months prior to the bankruptcy;
- Inform the Trustee of the details of all property disposed of by gift during the five years prior to the bankruptcy
- Inform the Trustee of any material changes in your financial situation.
Also, bankruptcy usually does not interfere with secured debts if there is no equity in the secured asset.
What Assets Are Exempt From Personal Bankruptcy?
If you declare bankruptcy in Canada, you are allowed to keep certain assets. The assets that are exempt from bankruptcy are called Exempt Assets. These are basic assets needed for day-to day living. Each Province has different basic Exemptions. These assets are called Exempt Assets, as they are exempt from seizure from creditors (even without a bankruptcy) and your trustee (with a bankruptcy).
How Much Does Personal Bankruptcy Cost?
The question of how much a bankruptcy will cost will depend on quite a few factors. To be sure you understand the process, always talk to a Licensed Insolvency Trustee’s to outline the entire bankruptcy process and the potential costs to you before you decide.
As a general overview of cost, some factors to consider are:
- How much you earn each month.
- Value of any assets that are not exempt – above Exempt Assets values,
- Whether or not you have been bankrupt before,
- If your personal tax debts are above $200,000 representing the majority of your debts.
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How We Help Individuals
Other Personal Insolvency Services
Consumer Proposals
A consumer proposal can result in savings of as much as 70-80% however, the consumer proposal’s cost is based on your personal situation.
Consumer Proposal vs Personal Bankruptcy
For those wanting debt relief, our insolvency team will provide you with advice on how to consolidate your debts into one easily manageable payment per month.
Debt Relief
For those wanting debt relief, our insolvency team will provide you with advice on how to consolidate your debts into one easily manageable payment per month.
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