Bankruptcy

Bankruptcy In General

Bankruptcy is a legal process that is available to individuals who can't pay their debts as they become due. An individual can file for bankruptcy if they have insufficient income or assets to meet their debt obligations. By filing for bankruptcy, you will be discharged from your debts. This means that you will have no legal obligations to repay your debts at the end of the process. The process is governed by Canadian Legislation, more specifically the Bankruptcy and Insolvency Act.  Individuals are only able to file a bankruptcy by using the services of a Licensed Insolvency trustee ("LIT"). A Licensed Insolvency Trustee is an individual licensed by the Office of the Superintendent of Bankruptcy (OSB).

Types of Debts included in a bankruptcy

The following are some common types of debts that can be included in a bankruptcy:

  • The following are some common types of debts that can be included in a bankruptcy
  • Credit card
  • CRA Income tax debt
  • Student loans *
  • Line of Credit
  • Unsecured Loans
  • Payday Loans

The length of the process:

For individuals who have never been bankrupt before, the process lasts between 9 and 21 months.

More information Here

Protection offered in a bankruptcy:

When a bankruptcy is filed, the following will STOP:

  • Collection calls: All collection calls will STOP. No creditors will be able to harass you anymore
  • Frozen bank accounts: all garnishee orders will be lifted
  • Wage garnishments: creditors will no longer be able to garnish your wages.
  • Court action: All court proceedings will be stayed and potential actions will blocked from proceeding