How to File Bankruptcy in Canada
If you’re struggling with unmanageable debt in Canada, the first thing you should do is meet with a Licensed Insolvency Trustee.
A Licensed Insolvency Trustee will discuss your personal financial circumstances with you, and help you to understand your debt relief options. Bankruptcy may not be the most appropriate option – in fact, alternatives like a consumer proposal or debt consolidation may be more suitable. Bankruptcy for many is the best option for beginning a fresh start financially. Discover more about the process of filing bankruptcy.
How do you find a Licensed Insolvency Trustee?
Licensed Insolvency Trustees are financial experts licensed by the Canadian government, and are the only professionals able to help provide financial relief to debtors. When searching for a Licensed Insolvency Trustee to help with your financial situation, it is important to bear in mind a few factors. Consider their location or availability in comparison to your own, and how suitable you feel they are to help with your financial situation. Spergel is a Canadian bankruptcy trustee firm with over 30 years’ experience that can help you with your personal financial circumstances.
How do I handle creditors?
Depending on your province of residence in Canada, there are laws on how and when creditors may contact you. Most importantly, no debtor should feel harassed by receiving a high volume of calls from a creditor. There are also certain times at which a creditor is able to contact a debtor. If, as a debtor, you feel harassed by a creditor or it is simply becoming overwhelming, the best course of action to take is to contact a Licensed Insolvency Trustee. They will be able to help by providing advice and becoming the intermediary between yourself and your creditors.
How do I file bankruptcy in Canada?
Filing bankruptcy in Canada is a relatively straightforward process, although it does involve some paperwork and can be time consuming. The most important step is to work with a Licensed Insolvency Trustee to walk you through the process of filing bankruptcy. This way, nothing will come as a shock further down the line and it will help to ensure the bankruptcy process runs as smoothly as possible. At Spergel, you will receive your own dedicated trustee throughout the entire process. Here is the typical process for filing bankruptcy in Canada:
Understand the extent of your debts
First of all, it is important to understand your financial situation and uncover the extent of your debts. Everybody’s financial circumstances are different, and sometimes it is a life event that prompts you to seek help from a bankruptcy trustee firm for debt relief. Prompts can include missing mortgage or loan payments, collection agency calls, a notice of legal action, or consistently reaching your credit card limit.
Find a Licensed Insolvency Trustee
Once you have decided to explore your debt relief options, the next step is to find a Licensed Insolvency Trustee. These financial experts are licensed by the Canadian Superintendent of Bankruptcy to administer consumer proposals and bankruptcies, and are the only professionals legally able to do so. They will help you to navigate the pathway to filing bankruptcy and gaining debt relief, all while explaining Canada’s complex debt regulations.
Discuss your options with your Licensed Insolvency Trustee
Once you have chosen a Licensed Insolvency Trustee, you should meet with them to review your debt relief options. At Spergel, you can arrange a free consultation with one of our experienced bankruptcy trustees to discover how you can become debt free. Within this session, you can discuss the details of your personal financial circumstances, including specific debts, and income and asset details. Your trustee will then advise on filing bankruptcy or bankruptcy alternatives like debt consolidation or consumer proposal. They are there to guide you through your decision.
Filing bankruptcy in Canada
Should you and your Licensed Insolvency Trustee decide that filing bankruptcy is the most suitable debt relief option for you, they will take on the work to relieve stress from you. Firstly, you will likely need to fill out an information form with your personal information, creditors, and assets. Your Trustee will then prepare the paperwork for filing bankruptcy – this is then signed, and your bankruptcy will begin. Learn more about the advantages of filing bankruptcy.
How long is the bankruptcy process?
In Canada, the process of filing bankruptcy takes time, but most bankruptcies are discharged in less than a year. If it is your first time filing bankruptcy, the process will typically take between nine to twenty one months. By this point, the bankruptcy process will officially finish and you will receive a discharge that officially cancels any debts. If this is not your first bankruptcy, or if you make surplus income, the bankruptcy process is likely to take longer. Subsequent bankruptcies typically last a minimum of two years. Discharge from bankruptcy is subject to completing your bankruptcy obligations, otherwise it could be delayed.
How much does filing bankruptcy cost?
It is not free to declare bankruptcy in Canada, and each case differs depending on personal circumstances. The cost of bankruptcy is dependent on a number of factors including a debtor’s income, expenses, and assets. Overall, the cost will include a monthly fee for covering the paperwork; any assets you will keep or surrender under bankruptcy legislation; and any surplus income payments, if applicable. Generally speaking, the minimum monthly cost for filing bankruptcy in Canada is $200 for a first time bankruptcy to cover administration fees.
Book a free consultation
Book a free consultation with one of the experienced Licensed Insolvency Trustees at Spergel to learn more about the process of filing bankruptcy and to discuss your most suitable debt relief options.