Bankruptcy may be an effective solution to help you get back on track if you’re battling with excessive debt. Before selecting a choice, it’s crucial to comprehend the procedure and what it comprises. Everything you need to know about filing for bankruptcy in Canada, including the requirements, procedures, and results, will be covered in this article.
Eligibility Requirements for Bankruptcy in Canada
In order to file for bankruptcy in Canada, you must fulfill the requirements listed below:
☑ You must owe unsecured debt of at least $1,000. (e.g. credit card debt, personal loans, etc.)
☑ You must be unable to make your required debt payments on time.
☑ You must reside in Canada or have conducted business there in the previous year.
☑ You must not have received bankruptcy discharge within the last seven years.
☑ A consumer proposal cannot have been submitted by you during the previous six months.
You might be able to apply for bankruptcy in Canada if you fulfill these eligibility requirements.
How to File for Bankruptcy in Canada
To file for bankruptcy in Canada, you must first consult with a certified insolvency trustee (LIT). A professional with a federal license to handle bankruptcies and proposals is known as a LIT. The LIT will analyze your financial situation and go over your choices with you during your initial appointment.
The LIT will assist you with the relevant documentation and filing a bankruptcy application with the Office of the Superintendent of Bankruptcy (OSB) if you decide to proceed with filing for bankruptcy. You will be given a bankruptcy trustee when your application is approved, who will look after your case.
What Occurs During Bankruptcy?
With some exceptions, your trustee will try to sell off your assets in order to pay off your creditors. To pay off your obligations, you can consider selling your house, your car, or other property. However, some assets, such as necessary home furnishings, professional equipment, and some kinds of insurance policies, could not be subject to liquidation.
You will be obliged to sell your possessions in addition to making regular payments to your trustee to assist settle your obligations. Your monthly payment will vary based on your income, expenses, and other considerations. These payments are meant to pay your creditors a percentage of what you owe them as well as the costs associated with managing your bankruptcy.
What Happens Following Bankruptcy?
You will be free of the majority of your bills after your bankruptcy is discharged, which normally takes 9 months to a year. Nevertheless, some debts, including school loans (if they are less than seven years old), court penalties, and child support obligations, may not be forgiven.
Also, filing for bankruptcy can lower your credit score. After your discharge, it will continue to appear on your credit record for six to seven years, which can make it challenging for you to get credit during that period. Yet, by utilizing credit wisely and paying all of your payments on time, it is feasible to start repairing your credit after bankruptcy.
Your Key to Financial Freedom
If you’re thinking of filing for bankruptcy in Canada, it’s crucial to consult with a reputable expert who can walk you through the procedure and assist you in making wise choices. National Debt Relief is available to assist. Our team of licensed insolvency trustees can assess your financial situation, outline your alternatives, and assist you in coming up with a strategy that works for you.
Arrange a free consultation and find out more about your options in Debt Settlement Programs in Canada.