How do I declare bankruptcy in Ontario?

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Thinking about bankruptcy in Ontario? Start with a Licensed Insolvency Trustee for a free consultation on options like consumer proposals. They’ll guide paperwork for the Office of the Superintendent of Bankruptcy. Hand over some assets, attend counseling, and share income details. Expect discharge after nine months for first-timers without surplus income.

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Declaring Bankruptcy Question

How do I declare bankruptcy in Ontario? I need help understanding the steps to declare bankruptcy in Ontario. What do I need to prepare?

From: Anonymous Question
Location: Montreal, Quebec (QC)
Category: personal bankruptcy

Declaring Bankruptcy Answer

Thinking about declaring bankruptcy in Ontario? Start by connecting with a Licensed Insolvency Trustee. They’ll offer a no-charge initial chat to go over your financial state and discuss your options for tackling debt, be it through bankruptcy or other alternatives like consumer proposals. This process includes a complimentary debt assessment to get a handle on the nitty-gritty of your debts, income, expenses, and what assets you have.

If you choose to forge ahead with declaring bankruptcy, the trustee will aid you in getting all the necessary paperwork squared away and submitting it to the Office of the Superintendent of Bankruptcy. Within just five days of your filing, your creditors will be in the loop, officially kick-starting the bankruptcy process.

Once you’re in bankruptcy territory, you’ll be handing over certain non-exempt assets to the trustee and ticking off a few essential tasks on your to-do list. This includes sharing your income details and participating in credit counseling sessions, plus any surplus income payments you might need to make. Typically, after about nine months for those going through their first bankruptcy without surplus income, you’ll find yourself discharged and free from the debts covered by this whole process.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

To declare bankruptcy in Ontario, follow these steps:

1. Consult a Licensed Insolvency Trustee (LIT): The process must be initiated with the help of an LIT who will evaluate your financial situation and determine if bankruptcy is the right option for you. This is outlined in the Bankruptcy and Insolvency Act (RSC 1985, c 11).

2. Prepare Necessary Documentation: You will need to gather information regarding your assets, debts, income, and expenses. This includes:

   • A list of all creditors and the amounts owed.
   • Your income statements and proof of income.
   • Details about your assets including property, bank accounts, and investments. Refer to section 7 of the Bankruptcy and Insolvency Act.

3. File the Bankruptcy Application: Your LIT will assist you in filing the necessary paperwork with the Office of the Superintendent of Bankruptcy. This includes the Bankruptcy Application and related schedules as per Regulation under the Bankruptcy and Insolvency Act.

4. Attend Credit Counselling: You are required to complete two credit counselling sessions with an approved agency, as mandated by the regulations.

5. Compliance with Duties: You must comply with all duties as a bankrupt, including attending meetings and providing further information if requested by the LIT or creditors. Duties are detailed in section 9 of the Bankruptcy and Insolvency Act.

6. Receive Your Discharge: After fulfilling your obligations, you can apply for your discharge. The trustee will assist you in this process, and your discharge will release you from most debts, as explained in sections 168-172 of the Bankruptcy and Insolvency Act.

Prepare these documents and follow the outlined steps to begin the bankruptcy process in Ontario.

From: OSB Helper

Related Questions to Ontario Bankruptcy Process

Here are the top 5 most frequently asked questions related to declaring bankruptcy in Ontario, along with brief answers:

1. What are the eligibility criteria to declare bankruptcy in Ontario?

You must owe at least $1,000 in unsecured debt, be unable to pay your debts as they come due, or owe more in debts than the value of your assets, and you must reside, do business, or have property in Ontario[2][5].

2. How do I start the bankruptcy process in Ontario?

You need to contact a Licensed Insolvency Trustee for a free initial consultation to assess your financial situation and prepare the necessary paperwork[1][4].

3. What documents do I need to sign to declare bankruptcy in Ontario?

You will need to sign an “Assignment” and a “Statement of Affairs,” which include details of your assets, liabilities, income, and expenses[4].

4. What assets are exempt from bankruptcy in Ontario?

Exempt assets include your primary residence (if equity is under $10,000), one vehicle worth less than $6,600, household furnishings and appliances up to $13,150, tools of the trade up to $11,300, necessary clothing, medical devices, certain life insurance, and savings in RRSPs, RRIFs, and SPSPs.

5. What are my duties during the bankruptcy period in Ontario?

You must provide tax information, submit monthly pay stubs and proof of other income, attend credit counselling sessions, make required contributions to your bankruptcy estate, surrender non-exempt assets, and complete any other duties requested by the trustee[1].

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

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