Bankruptcy in Canada

Bankruptcy in Canada

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Table of Contents• Page 3: Bankruptcy in Canada• Page 5: What Are The Benefits of Bankruptcy in Canada?• Page 7: Bankruptcy in Canada Information• Page 8: Bankruptcy in Canada Offers Immediate Protection• Page 8: You Are Not Alone in Considering Bankruptcy• Page 9: Bankruptcy is a Fair Process• Page 13: You Can Live Debt Free Re• Page 15: What Happens if My Proposal is Rejected?• Page 17: Impact of a Consumer Proposal on Credit Rating• Page 19: What Happens to My Secured Debts in a Consumer Proposal?



• Filing for bankruptcy in Canada can be a stressful situation and the decision of filing bankruptcy can be very emotional and taxing.• This is why all of the

Licensed Insolvency Trustees (a bankruptcy trustee) of Bankruptcy Canada offer a stress-free and relaxing initial consultation meeting this is no charge and confidential.• There is also no obligation to proceed if you decide that

bankruptcy or one of the alternatives to bankruptcy a trustee can help you with is not right for you and your financial problems.


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• You might want to consider bankruptcy in Canada if:• * You are unable to make the minimum payments on your credit cards or

other unsecured debts;* You are unable to repay your monthly bills;* Are being constantly harassed by creditors and collection agencies (a bankruptcy stops all collection actions by your creditors through the automatic stay);* You are using your credit cards for everyday expenses;* Your wages are being garnished or you know a wage garnishment order is being considered as bankruptcy will stop a wage garnishment through the automatic stay.


What are the Benefits of Bankruptcy in Canada?

• For individuals who are hopelessly trapped in debt in bankruptcy can offer many advantages. • These benefits of bankruptcy include:• * You will have all of your unsecured debts (with some

exceptions in rare cases) eliminated by filing for bankruptcy;* Creditors will not be able to take any legal action against you;* Bankruptcy in Canada can stop wage garnishments;


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What are the Benefits of Bankruptcy in Canada?

• * Your assets are protected from seizure in many cases;* You will be required to complete bankruptcy counselling that will help you stay debt free and enjoy a secure financial future;* You will lose the stress and anxiety that comes from being trapped in debt;* You can begin rebuilding your credit and get on the path to a fresh start.


Bankruptcy in Canada Information

• There are certain bankruptcy basics you should have a basic understanding of before you speak with a bankruptcy trustee about your debt relief options.


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Bankruptcy in Canada Offers Immediate Protection

• When you declare bankruptcy in Canada you will receive an “Automatic Stay” which is a legal order that prevents your creditors from making any collection action or suing you in an attempt to collect on what you owe them.• All creditor calls will stop and you won’t have to deal with your

creditors at all.• You will stop making payments to your creditors and your

trustee will handle all contact with your creditors on your behalf.


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You are not alone in Considering Bankruptcy

• – As a legal process that is intended to give honest but unfortunate debtors a chance for a fresh start.• If you are thinking about personal bankruptcy in

Canada you are not alone.• In 2015 more than 120,000 people filed either a

bankruptcy or a consumer proposal.


Bankruptcy is a Fair Process

• – When you go bankrupt you will be allowed to keep certain assets and you will be given a fresh start.• Additionally, your creditors will recoup part of the fees

paid into the bankruptcy estate, including proceeds from a sale of any non-exempt assets.• The more you earn the more you will have to pay to your

creditors, and the longer your bankruptcy will last to ensure the process is fair for you as well as your creditors.


You can Live Debt Free Relatively Quickly

• – Compared to other debt relief options bankruptcy is often the fastest and most affordable way to a fresh financial start.• In fact, if you haven’t been bankrupt before and

have no surplus income you will be debt free 9 months from the date of your bankruptcy filing.


You Will Not Lose Everything When Filing Bankruptcy

• – By filing for bankruptcy you will not lose everything and you will be able to keep certain assets, including your car, RRSPs and your house.• The Bankruptcy and Insolvency Act allows for certain

bankruptcy exemptions in each province which protects your assets from seizure. Even if your assets are not protected by the bankruptcy exemptions in your province you can still keep the asset in certain cases.


More Information on Personal Bankruptcy in Canada

• Costs of filing bankruptcy: When you meet with your Bankruptcy Canada Trustee they will explain the costs of filing for bankruptcy and will help you understand how the costs to file bankruptcy are determined


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• Bankruptcy and Your Assets: A popular question many debtors have about filing for bankruptcy is whether you are able to keep your house when declaring bankruptcy and if bankruptcy will affect your mortgage.

• As your home is a secured asset your home debt (your mortgage) cannot be included in your bankruptcy.

• If your equity is less than the homestead exemption in your province you will be able to keep your home when going bankrupt.

• If you have more equity than you are allowed to keep you will be able to still keep your home if you pay the trustee the difference in the equity you have and the equity you are able to keep as listed under your province’s bankruptcy exemptions.



• What Debts are Not Included in Bankruptcy?: While bankruptcy can eliminate all unsecured debts in almost all bankruptcies there are certain exceptions to the debts that can be eliminated in bankruptcy. Not all of your debts will be eliminated when you receive your bankruptcy discharge including debts arising from fraud, alimony payments, child support payments, court awarded damages, student loan debt if the student loan debt is less than 7 years old.



• Tax Debts and Bankruptcy: If you have debts owing to the CRA (Canada Revenue Agency) you are not alone. Many debtors considering bankruptcy have unpaid taxes owed to the CRA that is a large amount of the debt that they owe.• When you get your bankruptcy discharge your debts

owing to the CRA will be released and you will not be responsible for paying your unpaid tax debt.



• Alternative to Bankruptcy: At your initial meeting with your Bankruptcy Canada Licensed Insolvency Trustee you will have a chance to discuss alternatives to filing bankruptcy. We can help you make a consumer proposal, the #1 alternative to bankruptcy in Canada.





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Bankruptcy in Canada

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