What happens during the bankruptcy process?
The whole process is no where near as bad as people think. In fact it is really quite simple.
We first need to discuss what type of bankruptcy you will file. There are 2 types of bankruptcy administration that are possible.
1. Summary Administration - This is a streamlined bankruptcy for people who have less than $15,000 in assets.
2. Ordinary Administration - This a more complex and public bankruptcy, for people or companies who have more than $15,000 worth of assets.
Once all of your paperwork is filed, and you are bankrupt, there is no withdrawing or turning back. The following duties are imposed upon you and you must complete them in order to be discharged from Bankruptcy.
1. Be Honest
The bankruptcy process is very simple and straightforward if a person is honest about all of his assets, and income. He must also disclose all the assets he has disposed of within the last 5 years. If there are any transactions that are questionable they may be reversed.
There is a minimum 9 month or maximum 21 month term for a first time bankrupt or a minimum 24 month or 36 month term for a 2nd time bankruptcy
The term of bankruptcy is determined by your surplus income. If your income is above the allowable exemption posted by the Superintendent of bankruptcy then you will be required to stay for the longer term. Basically if you make more money, you pay more, and stay bankrupt longer.
Hers an example:
Your Income $2,567
Allowable Income(based on 1 in family) ($2,067)
Surplus Income $500
Payment is 50% $250
Total Cost (250 x 21months)
3. Surplus Assets
When you declare bankruptcy you are assigning all of the right, title and interest in your assets over to a Licensed Insolvency Trustee. There are certain assets you are allowed to keep however, and they are determined by the laws of your province.
Here is a link to the allowable assets.
4. Credit Counselling
In order to be discharged from bankruptcy the Trustee will provide to you 2 credit counselling courses. These are time sensitive, as they must be completed within 60 days of filing, and 210 days of filing.
5. Pay the trustee fees
The cost of your bankruptcy is determined by your income as mentioned above.
For a detailed explanation of how debt relief works, and the multitude of options, contact us for a free consultation. We want to hear about your situation. You may call us anytime.