Filing for Bankruptcy

Filing for bankruptcy is a straightforward process.  It requires you work with a bankruptcy trustee and complete the necessary requirements.  If you fulfill your obligations throughout the duration of your bankruptcy, you will receive an automatic discharge and be free of your eligible unsecured debts.  Filing for bankruptcy can be done in seven simple steps.

1.  Select a trustee.

2.  Arrange a meeting.

3.  Complete the Financial Information Application Form.

4.  Meet with the Trustee to review your information.

5.  Meet with trustee to sign paperwork.

6.  Trustee files paperwork and a Stay of Proceedings is issued.

Step 1: Select a Bankruptcy Trustee

According to Canadian law, a licensed Trustee in Bankruptcy must facilitate your bankruptcy filing, so your first step will be to find one.   Laws vary from area to area so it is important to find a trustee that is licensed in your Province.

The Office of the Superintendent of Bankruptcy is a good place to start.  They have lists of trustees that are available in each province.  Speak with a few. You should feel comfortable with the trustee you select. You will be spending a good deal of time together over the course of your bankruptcy.  Initial consultations are free so there’s no reason you can’t meet with more than one trustee before you decide. Personal Bankruptcy Canada can also help you select a Bankruptcy Trustee in your area.

Step 2: The Initial Meeting

The initial consultation is an opportunity for a trustee to begin reviewing your financial situation. Based on the analysis, he or she will ensure that personal bankruptcy is, in fact, your best solution.  There are alternatives to bankruptcy that some Canadians are not familiar with, and if the solution fits your situation, your trustee might recommend one of these alternatives.  If you are leaning toward bankruptcy, the trustee will provide you with an application form, where you can record details of your current finances.

Step 3: Completing the Application Form

Completing the application involves listing all your debts as well as the monthly payments on those debts. your living expenses, all sources of current and expected income, and all that you own – your home, your cars, your personal possessions, and any investment or retirement accounts you have.

Step 4: Reviewing the Form

The next step is to meet again with the trustee to ensure the form is completed properly.  Assuming you have had a day or two to think about what you are doing and are ready to proceed, you will ask the trustee to begin preparing the paperwork needed to file.  If you’re not ready, you can ask for a few days to think before reaching a final decision.

5. Completing and Signing the Paperwork

Once you have informed the trustee of your decision, he or she will complete the legal paperwork, which you will sign.

6. Filing the Paperwork/Getting a Stay of Proceedings

The trustee will file the paperwork with the Office of the Superintendent of Bankruptcy and you are officially declared bankrupt at the time of the filing.

Canada bankruptcy law provides for an immediate issuing of a “stay of proceedings” which will force your creditors to cease all collection activities against you, including wage garnishments, bank account attachments, repossession activity, and phone calls or other forms of debt collection communication.

A trustee is the best source of help you can get.  Make a list of all of your questions and bring it to your consultation.  The more prepared you are, the smoother the process will go.