How to apply for bankruptcies?

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Begin your journey by chatting with a Licensed Insolvency Trustee (LIT) to evaluate your financial health. This free consultation could lead to a consumer proposal or bankruptcy. Gather important financial documents, and let the LIT manage the paperwork and creditor meetings. Prepare to part with non-essential assets and keep up with bankruptcy obligations. Ensure you only trust dependable trustees. Since trustees are paid by lenders and creditors, they don’t advocate for Canadians struggling with debt. They may also bill you twice or add unexpected fees. Be careful! Contact us by phone, text, or live chat with your questions.

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Apply For Bankruptcies Question

How to apply for bankruptcies? I want to know what steps I need to take if I decide bankruptcy is the right choice for my financial situation.

From: Anonymous Question
Location: St Johns, Newfoundland Labrador (NL)
Category: personal bankruptcy

Apply For Bankruptcies Answer

Step 1: Chat with a Licensed Insolvency Trustee

Reach out to a federally regulated LIT for a good old financial check-up. They’ll browse through your income, debts, assets, and expenses, helping you map out potential solutions like bankruptcy or a consumer proposal. And guess what? The consultation won’t cost you a dime.

Step 2: Round Up Your Financial Records

Your LIT will need some paperwork, so gather up:

• Pay slips and tax returns to show your income
• Bank and credit card statements
• Loan agreements with payment details
• Info on your assets, like property and vehicles

Step 3: Hand Over Bankruptcy Forms

Your LIT will whip up and file the necessary documents with the Office of the Superintendent of Bankruptcy (OSB), which include:

• It’s all about “Assignment”: Giving the LIT control of your assets
• “Statement of Affairs”: Laying out your financial details—what you owe, make, and own

Step 4: Have a Chat with Your Creditors

Soon after filing, you’ll attend a meeting with your creditors. Your LIT will be there to speak on your behalf and iron out the terms.

Step 5: Part Ways with Non-Essential Assets

The LIT will handle selling off non-essential assets (like that vacation home or investments) to help pay down your debts. Don’t sweat it—your main home and work essentials usually stay yours, based on where you live.

Step 6: Stick to Your Bankruptcy To-Dos

• Send in monthly income and expense updates
• Make surplus income payments if you earn above provincial limits
• Attend two financial counseling sessions to boost your money smarts
• Pass over tax info to let your LIT handle your bankruptcy year return

Step 7: Hang Tight for a Discharge

Discharge times vary:

• Newbies get a 9-month wait
• Repeat filers might look at 24-36 months
• Bigger earners can expect up to 21 months before they’re free

Step 8: Bounce Back After Discharge

• Dust off your credit score with a secured credit card or small loan
• Steer clear of racking up any burdensome debt again

Keep These in Mind:

• Some debts won’t vanish, like child support or certain student loans
• Bankruptcy isn’t free, normally it’s about $2,700 paid over time
• Consider a consumer proposal if your debt is under $250,000 and you’re keen to repay some of it. Got questions? Just call or text.
  
  From: Insider Scott
  
  

Office of the Superintendent of Bankruptcy (OSB) Answer

To apply for bankruptcy in Canada, follow these steps:

1. Consultation with a Licensed Insolvency Trustee: You must meet with a LIT to assess your financial situation. They will help you determine whether bankruptcy is the most appropriate option (Bankruptcy and Insolvency Act, RSC 1985, c 11, Section 5).

2. Filing the Bankruptcy Application: If you decide to proceed, the LIT will help you complete the necessary paperwork and file your bankruptcy application with the Office of the Superintendent of Bankruptcy (OSB) (Bankruptcy and Insolvency Act, RSC 1985, c 11, Section 49).

3. Preparation of Financial Statements: You must prepare a Statement of Affairs, which includes details of your assets, liabilities, income, and expenses (Bankruptcy and Insolvency Act, RSC 1985, c 11, Section 95).

4. Attend a Credit Counselling Session: Before you are discharged from bankruptcy, you will need to complete credit counselling sessions as mandated (Bankruptcy and Insolvency Act, RSC 1985, c 11, Section 170).

5. Superintendent’s approval: Approval from the OSB is required before the discharge can take place. The LIT will assist with this process (Bankruptcy and Insolvency Act, RSC 1985, c 11, Section 68).

6. Adhere to Conditions: After completing your bankruptcy, you must comply with any requirements set out by the court or the LIT, including making payments if required (Bankruptcy and Insolvency Act, RSC 1985, c 11, Section 72).

Ensure to review the full details as specified in the relevant sections of the Bankruptcy and Insolvency Act.

From: OSB Helper

Related Questions to How To Apply For Bankruptcy

Here are the top 5 most frequently asked questions related to applying for bankruptcy in Canada, along with brief answers:

1. How do I find a Licensed Insolvency Trustee (LIT) to help me with bankruptcy?

You can find a Licensed Insolvency Trustee through the Office of the Superintendent of Bankruptcy’s searchable list of authorized LITs or by contacting a local insolvency firm[2][3][4].

2. What forms do I need to complete to file for bankruptcy?

You need to complete several forms mandated by the Office of the Superintendent of Bankruptcy, which will be provided and reviewed by your Licensed Insolvency Trustee[3][4].

3. What are the steps involved in the bankruptcy process?

The process includes finding an LIT, assessing your financial situation, filing the necessary forms, attending a meeting of creditors, and completing two credit counselling sessions before being discharged from bankruptcy[2][3][4].

4. What happens to my assets when I file for bankruptcy?

Your Licensed Insolvency Trustee will take possession of your allowable assets, liquidate them, and distribute the funds to your creditors, as permitted by your province or territory[2][4].

5. How long does the bankruptcy process take, and what is the discharge process?

The bankruptcy process typically takes 9 to 21 months, after which your LIT will apply for your discharge, issuing a Certificate of Discharge that eliminates your obligation to repay most debts included in the bankruptcy[2][4].

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

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