Filing for bankruptcy isn’t a simple decision. It’s one that needs to be made during one of the most difficult periods of your life financially and personally. You aren’t able to keep on top of your bills. You may be using one credit card to pay another. You’re afraid to answer the phone in case it is the collection agency calling again. You are fighting with your significant other over money issues. . . .
The signs of financial crisis are many and hard to face. That’s why you need to come for a consultation with Licensed Insolvency Trustee (LIT) such as Doyle Salewski. We can help you assess your situation and give you your options to deal with it. The numbers will tell your tale. If we decide together that bankruptcy is the best way to go, then we will work with you to successfully complete the process.
In fact, filing for a bankruptcy in Ontario has to be handled by an LIT. (A credit counsellor, for example, can’t do this for you.) In simple terms it involves turning over your property to a trustee, which they sell to pay your creditors. While this may sound grim, the immediate benefit is that as the trustee deals with your creditors the harassing calls stop and you get some space to deal with your money problems. The process can be the beginning of healing, as you make your way back to financial freedom and peace of mind.
Believe it or not, not everyone does. While you don’t have to be a Canadian citizen to file for bankruptcy, you must owe at least $1,000, have property or assets in Canada and be insolvent – that is, you either cannot or are not paying your bills, or what you owe is greater than what you are worth.
With a bankruptcy, the property and assets you may have to turn over to the trustee falls into three categories:
Your things can include cars, homes, boats, RRSPs and so on. No surprises here.
But as you will discover in your consultation with a licensed trustee, there are exceptions to the stuff you need to surrender allowed under the Ontario Executions Act. These can include clothing and accessories, household furnishings (up to $13,150), a motor vehicle (up to $6,600), your house (if you have $10,000 of equity or less) and tools of your trade (up to $11,300).
The trustee must do your income tax returns for the year of your bankruptcy and any years before this you haven’t filed. If you have a refund coming, it will go to the trustee to pay creditors. Any taxes you owe before the bankruptcy date will be included in your bankruptcy, and any after that date are yours to pay.
In a bankruptcy, income is considered part of your property. You may be required to surrender some of it each month during your bankruptcy. This is called “surplus income” and it’s based on the money you make after taxes that are over and above a guideline set by the government.
If you’ve never been bankrupt before and don’t have any surplus income to surrender, your bankruptcy will usually last nine months. With surplus income, it will go on 21 months. The bankruptcy will last longer if you have been bankrupt before.
Using broad brushstrokes, this is what’s involved in filing for bankruptcy. But for every individual case, there are many complexities that need to be considered and properly addressed, so your problem is effectively resolved and not made worse.
Come into Doyle Salewski today for free no-obligation, fully confidential first consultation with one of our licensed experts. We promise to help you find the best solution for your case, whether it is bankruptcy or something else. In Ottawa call 613-237-5555; out of town, call toll-free 1-800-517-9926 or book online.