Only a licensed insolvency trustee can initiate and process bankruptcy proceedings. You generally don’t need a lawyer unless your circumstances are particularly complex, in which case your trustee will work with your choice of counsel.

You must see a licensed insolvency trustee who will:

• review your financial situation with you, usually for free
• prepare the documents you need
• guide you through the signing process
• provide you with financial counselling to help you manage your finances in the future

In addition to the two mandatory financial counselling sessions, you’ll have to attend an occasional meeting with a creditor to discuss your finances if you’re requested to do so. This generally doesn’t happen unless you have creditors of a personal nature.Creditors and the Office of the Superintendent of Bankruptcy also carry out random examinations which you’re required to attend if asked.

A licensed insolvency trustee is an expert who will:

• provide a free consultation to determine if, when, and how you should proceed
• explain options other than bankruptcy, such as consolidation loans, re-mortgaging your home, borrowing from family/friends, budgeting, proposals, and/or selling assets
• provide you with personalized attention throughout your entire proceedings
• deal with creditors on your behalf

Bankruptcy administration costs are paid from the proceeds of sale of your property, and from mandatory or voluntary payments made to your trustee.

Bankruptcy eliminates most unsecured debts, but not all. The following debts are not dischargeable in a bankruptcy:

• court imposed fines, penalties, and restitution orders
• parking tickets and speeding tickets
• alimony or child/spousal support
• debts arising from fraud, embezzlement, misappropriation or fraudulent misrepresentation
• civil court damages awarded against you for sexual assault or bodily harm
• student loans for studies within the past seven years

You will most likely have to make monthly payments to your trustee for the benefit of your creditors. The government refers to this payment as a surplus income payment.

Most personal bankruptcies go undetected by family and friends. Only creditors and their agencies are formally advised by mail, and newspaper announcements are reserved for corporate and/or larger personal bankruptcies.Doyle Salewski Inc. will only discuss your bankruptcy with you, your creditors, your lawyer (if one is involved), and bankruptcy officials. If your trustee has to stop the garnishment of your wages, your employer will also be notified.

Your student loans can be discharged by bankruptcy only if you file your assignment seven years after you cease to be a full- or part-time student (seven years after the last month in which you finished school).

Personal income tax and director’s liability (HST, GST and PST, source deductions) are all debts that can be included in a personal bankruptcy.

You should see a trustee immediately to find out whether Canada Revenue Agency has filed a secured claim against you.

Yes. Your credit bureau record will be updated to reflect your bankruptcy, which will remain listed for six or seven years (depending on the region in which you live) after your discharge.

The licensed insolvency trustee will send documents to your creditors within five days of the date of your bankruptcy. If creditors contact you between the time you file for bankruptcy and the time they’re notified, refer them to the trustee. You don’t have to give them any additional information.

No. In fact, a Canadian bank cannot refuse to open a personal bank account for any of the following reasons:

• bankruptcy
• joblessness
• lack of deposit funds at the time of opening the account

Creditors should stop calling you as soon as they know you’ve declared bankruptcy, whether you’ve told them yourself or they’ve received documents from your trustee. If your creditors and/or collection agencies continue to call, advise your trustee, who will call them personally.If your wages are presently being garnished, your assignment in bankruptcy will, in most cases, stop the garnishee.

That depends. If you’re in arrears on your mortgage, bankruptcy does not prevent the mortgagee (bank) from foreclosing on your house. If your payments are up to date, however, your mortgage agreement can continue. To find out if this is an option for you, you’ll need to provide a recent appraisal of your home along with an up-to-date mortgage balance statement so the licensed insolvency trustee can determine the amount of equity you have. To remain in your home, you’ll have to pay the amount of that equity to the trustee for the benefit of your creditors.This equity payment is over and above your surplus income payments and income tax refunds, which you are also required to pay. The trustee will usually register a charge against your home until the equity amount is paid in full.

If this is your first bankruptcy and you have no surplus income, you’ll be eligible for an automatic discharge from bankruptcy after nine months—assuming you’ve met all your responsibilities. If you do have surplus income, you will remain in bankruptcy for an additional 12 months so that you may continue making the surplus income payments.If you’re a second-time bankrupt who has no surplus income and you’ve met your responsibilities, you’ll be eligible for an automatic discharge after 24 months. If you do have surplus income requirements, you’ll remain in bankruptcy for an additional 12 months, during which time you’ll continue making payments.

Generally, in a first-time personal bankruptcy, you are required to:

• disclose to the trustee all your assets and debts to the best of your knowledge
• surrender all your credit cards to your trustee;
• attend two counselling sessions
• report any changes in your financial, family, and residential status (including major changes to your income)
• make a monthly surplus payment (or, if you have no surplus, an amount determined by your trustee)
• file monthly income and expense reports
• provide your income tax information to your trustee who will do your taxes for the year of your bankruptcy and, if necessary, the prior year

• examining what brought about your financial distress in the first place
• money management skills
• budgeting
• enhancing your well being
• goal-setting
• implementing lifestyle changes
• securing family co-operation
• preventing a financial relapse

Only a trustee is licensed by Federal government of Canada to administer the Bankruptcy and Insolvency Act. Unless a credit counsellor is affiliated with a trustee, he/she cannot file bankruptcy or consumer proposal documents. The “informal” proposals they make with creditors carry no legal weight, are often not supported by your creditors, and may not deal effectively with your debt. To learn more about Licensed Insolvency Trustee, we suggest you read this guide by the Office of the Superintendent of Bankruptcy .

Each year, the Canadian government decides how much a household needs on a net monthly basis in order to maintain a reasonable standard of living. In a bankruptcy, every dollar you earn above that limit is considered to be ‘surplus’ and 50% of it must be paid to your trustee for the benefit of your creditors. You’ll pay this surplus amount every month as long as you remain in bankruptcy: anywhere from 9 to 21 months for a first-time bankrupt, and from 24 to 36 months for a second-time bankrupt.If you make less than what the government says you need for a reasonable standard of living, you won’t have surplus income, but your trustee may still require you to make a voluntary payment.

• household furniture and appliances ($11,300 worth)
• personal effects, jewellery, etc. ($5,650 worth)
• tools required for your work, which may include your automobile if you need it to earn income ($11,300 worth)
• one vehicle per bankrupt person, owned free and clear of liens ($5,650 worth)

• household furniture and appliances ($6,000 worth)
• food, fuel, linens and clothing necessary for the life of the household
• tools required for your work
• family papers and portraits, medals and other decorations
• property declared by a donor or a testament to be exempt from seizure
• judicially awarded support and sums given or bequeathed as support
• certain benefits payable under a supplemental pension plan
• certain disability benefits and property of a person that he/she requires to compensate for a handicap
• RRSPs, Registered Retirement Income Funds and Deferred Profit Sharing Plans

Your property is defined by the government as the things you would generally consider to be property yourself (equity in your home, vehicles, jewellery), plus income tax refunds and a portion of your income.

Child support or spousal support payments that are part of a court-ordered agreement are not dischargeable in a bankruptcy. You have to pay them regardless of whether you are bankrupt or not, and anyone pursuing you for these payments (i.e. the Family Responsibility Office or a lawyer) can continue to do so during the bankruptcy.

The trustee is required to collect funds from any earnings above what the Superintendent of Bankruptcy considers reasonable for your situation. These standards usually apply to higher income earners.

To find out more about personal bankruptcy and to determine whether you’re eligible to declare Bankruptcy —or if doing so is even your best option—you’ll need to speak with a licensed trustee. At Doyle Salewski, your first consultation is free, confidential, and carries no obligation, so call one of our professionals today, and let us help you find your path to financial relief.