Declaring bankruptcy: is it for me?
Do you have any financial problems? Are you experiencing one or more of these situations?
- You are not able to reduce your debts, on the contrary, you borrow to pay your old debts;
- You cannot pay all your current debts at the end of the month;
- You cannot pay your rent;
- You are unable to pay your Hydro-Québec, Bell or Videotron account;
- You mainly use your credit card and only make the minimum payment on it;
- Your income has decreased due to a family or medical situation;
- You are in the process of separation or divorce;
- You have taken on someone else’s debts and they are unable to repay their loan.
If you answered yes to one or more of these questions, bankruptcy may be an appropriate solution for you.
Declaring bankruptcy in stages
1. The first step is to make a list of your creditors with their name, address and account number.
2. We then recommend that you prepare your monthly budget while remaining realistic (we have a budget tool available right here).
A quick note to that effect: In your budget, don’t factor in creditor payments except for mortgage, loan or car lease payments. Think about all your expenses, even the small ones.
3. Third, you will need to contact a licensed insolvency trustee.
Just follow this link to make an appointment with us. Make sure you have completed the two preliminary steps.
4. Now it’s time to evaluate your situation.
The trustee will complete your assessment with you and determine the period during which you would be in bankruptcy, as well as your commitments under the law. He will go through all the steps related to your bankruptcy and will answer all your questions.
5. Finally, you will need to sign and file the bankruptcy with your advisor.
From that moment on, you are protected from creditors’ recourses, including wage or bank seizures.
There are only five steps to take all that pressure off your shoulders, so take action!
Schedule a meeting with one of our
experts
FREE CONSULTATION
Without commitment. Confidential.
Do you have any questions? We have the answers.
Can I go bankrupt?
To file for bankruptcy, you must be a Canadian citizen, have a Canadian address and have more than $1,000 in debts. You must be insolvent, which means that you are unable to pay your debts as they become due.
When to declare bankruptcy?
You decide when. However, there may be important signs that it is time to take action:
- You are constantly called by collection agencies, even at work;
- A lender or the government has seized your wages;
- Your bank account is frozen or seized;
- Your debts are the main topic of conversation in your relationship or create divergence;
- Your debts affect your sleep or your health;
- You need to borrow from family or friends to meet your obligations;
So you choose when, but you can do it before you get there.
If I go bankrupt, what happens to my property and my furniture?
The law allows you to keep up to $7,000 of the current market value of your personal property. In fact, in most cases, your trustee will evaluate your belongings and agree with you that you can keep all your furniture from your main residence as well as all the clothing necessary for everyday life.
Your RRSPs are also exempt from seizure for contributions made more than twelve months before the bankruptcy.
What is the impact of a bankruptcy on my credit report?
Contacting a member of our team to have your situation evaluated does not affect your credit rating. This myth is false, it is only when the bankruptcy process is engaged that this will be the case, not before.
However, once the process is initiated, a bankruptcy results in an R9 rating on your credit report and this rating remains on your credit report for the duration of the bankruptcy, as well as six years after your discharge. Your credit score is already affected if you have been struggling to pay your debts for some time or if you are subject to recourse from your creditors.
What is the alternative to personal bankruptcy?
A consumer proposal is an option to consider. If your debts are less than $10,000, you can also consider a voluntary deposit.
A licensed trustee will be able to advise you on the best option to take.
Who are the creditors?
There are different types of creditors:
- Secured creditors
- Mortgagee (for example: a mortgage on a house)
- Installment sales (for example: financing on a car)
- Reservation of property rights
- Rental and buy-back
- Ordinary creditors
- Any other creditor who does not have a security interest to publish against any of your assets.
- Personal loan
- Line of credit
- Credit card
- Taxes
- Goods and services
- Creditors who retain recourse despite a bankruptcy or consumer proposal
- Secured creditor, if you keep the property
- Alimony
- Ticket
- Overpayment of employment insurance or income security benefits
- Criminal judgment
- Student loan, if you have completed your studies less than 7 years prior to submitting your application.
- Any other creditor who does not have a security interest to publish against any of your assets.
What is happening to my spouse and children?
They are not affected by your bankruptcy unless the debts are joint. Then your spouse will become responsible for all joint debts.
What happens to my house if I go bankrupt?
If you are no longer able to pay your mortgage, your bank can take it back and sell it;
Several other contexts may exist and we advise you to consult us to discuss them.
Can I keep a credit card in bankruptcy?
No. As a bankrupt you cannot apply for or incur credit.
Still haven’t found an answer to your concerns? Your first consultation is free, don’t hesitate.
All our solutions
Do you want to take control of your finances and leave with your head held high?
We are here to accompany you through this ordeal.
Declaration of bankruptcy
Get out of debt
and get back on track financially.
Consumer proposal
Avoid bankruptcy and eliminate
up to 50% of your debts.
Debt consolidation
Get a loan from a financial institution and combine all your debts into one payment.
Voluntary deposit
Refusal of an insolvent estate
Refusal of succession is the possibility for an heir to refuse the succession, i.e. to accept or refuse to inherit the property of the deceased.
For companies
Commercial bankruptcy is a procedure established by law to allow companies in financial difficulty to restructure and continue their activities.