Can you save money in bankruptcies?

_{save money in bankruptcies, opportunities to save money during the bankruptcy process, Nova Scotia}

Saving money during bankruptcy is possible. As long as you follow your bankruptcy obligations, set-aside funds are yours, offering a way to manage essential expenses like rent and groceries without trustee interference. Consider a consumer proposal to retain assets and savings, impacting credit less. Licensed Insolvency Trustees can guide you on saving strategies. For more tips, check out Debt Insiders.

_{Save money in bankruptcies: essential tips and insights.}

Question

Can you save money in bankruptcies? I’m curious if there are opportunities to save money during the bankruptcy process, and how does that work realistically?

From: Anonymous Question, Halifax, Nova Scotia (NS)

Debt Insiders Answer

Absolutely, saving money during bankruptcy is possible thanks to helpful guidelines regarding after-acquired property and essential expenses. When you file for bankruptcy, any money you set aside is considered after-acquired property. This means you can keep it as long as you stick to your bankruptcy commitments and fulfill your income requirements. Key living expenses like groceries, rent, and utilities are generally off-limits for seizure by the trustee, giving you breathing room to cover immediate costs. Knowing these protections is crucial for navigating bankruptcy while saving some cash.

Now, if you’re looking for a less intense lane, there’s the consumer proposal option—it allows you to hang onto all your assets, including those precious savings, while hashing out a debt reduction plan with your creditors. Plus, it usually doesn’t ding your credit quite as much as bankruptcy does. Enter the Licensed Insolvency Trustee—your personal guide through the maze. They’ll help you sort out your finances and explain the ins and outs of provincial exemptions for savings accounts.

Getting the lowdown from a trustee makes it heaps easier to figure out how to save wisely during this process. For more insights, check out Debt Insiders bankruptcy section —your go-to for in-depth advice.

From: Insider Adam

Office of the Superintendent of Bankruptcy (OSB) Answer

Yes, there are opportunities to save money during the bankruptcy process in Canada. One way to potentially save is by qualifying for a lower monthly payment based on your income and allowable expenses. Under the Bankruptcy and Insolvency Act (BIA), your surplus income is determined after deducting necessary expenses from your income. This is outlined in section 68.3 of the BIA, which establishes thresholds for what constitutes surplus income and how it affects the duration of bankruptcy and the amounts owed.

Additionally, the regulations set limits on the amount of money you must pay to your creditors during the bankruptcy. For instance, under the regulations pertaining to eligible creditors and allowable claims, claimants must conform to specific parameters, which may provide some financial relief in terms of how much debt can be discharged.

Furthermore, the fees charged by the Licensed Insolvency Trustee (LIT) can also vary based on the amount of debt, which can create opportunities for savings. Section 1(1) of the Regulations states that the fees should align with the services provided and the debtor’s financial situation, promoting fair cost structure based on individual circumstances.

Finally, opting for a consumer proposal instead of bankruptcy can reduce the immediate financial strain. A consumer proposal may allow you to negotiate a payment plan with creditors that is more manageable than the total debts, and it is governed by section 66.1 of the BIA, which allows convenient arrangements that may save you money in the long run.

From: This answer is provided by scanning the Bankruptcy & Insolvency Act and related directives from the Office of the Superintendent of Bankruptcy (OSB).

Related Questions

Here are the top 5 most frequently asked questions related to saving money in the context of bankruptcies, based on common online searches and current trends:

1. How much does it cost to declare personal bankruptcy?

• The minimum cost is $1,800, typically paid in 9 monthly installments of $200[4][5].

2. Can I afford the fees for filing bankruptcy if I have no money?

• Yes, you may be able to get help or an exemption from the financial cost through the Office of the Superintendent of Bankruptcy (OSB)[1].

3. Do I have to pay extra towards my debts during bankruptcy?

• Yes, depending on your income and any lump sums you receive, you may need to pay extra towards your debts before discharge[1][4].

4. What costs are included in the fee for declaring bankruptcy?

• The fee includes the filing fee, financial counselling sessions, file administration, income tax returns, and ongoing support[2][4][5].

5. Can I keep my assets if I declare bankruptcy?

• Most people keep their assets in bankruptcy, but this can vary based on the nature of your debts and assets[2][4].

If you have a question about debt see our debt questions or ask your own debt related question.

References

_{Table of article references}