How to file bankruptcy?

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Thinking of filing for bankruptcy in Canada? Start by organizing your finances and gathering documents like pay slips and bank records. Next, consult a Licensed Insolvency Trustee (LIT) for guidance. They’ll offer a free debt check-up and help you explore bankruptcy options or consumer proposals.

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Bankruptcy Process Question

How to file bankruptcy? I’m interested in filing for bankruptcy but need help understanding the process. Where should I start?

From: Anonymous Question
Location: Burlington, Ontario (ON)
Category: personal bankruptcy

Bankruptcy Process Answer

If you’re thinking about filing for bankruptcy in Canada, here’s a handy guide to get you started. First, take a good look at your finances. Round up all your important documents like your pay slips, bank records, and a detailed list of what you own versus what you owe. After that, it’s time to connect with a Licensed Insolvency Trustee (LIT). These are the folks approved by the government to walk you through this process. Schedule a meeting with them to chat about your financial situation and explore options like bankruptcy or perhaps a consumer proposal.

During your chat, your LIT will offer a free debt check-up to suggest the best path forward. If you choose bankruptcy, your trustee will help you fill out the necessary forms, like the ‘Assignment’ and the ‘Statement of Affairs’. Once everything is submitted to the Official Receiver, you’re shielded from creditor calls and must get through some required hoops like attending counseling sessions and maybe selling off some assets before you can officially wrap things up and get your Certificate of Discharge. For more details, check out this link.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

To file for bankruptcy in Canada, you should follow these steps:

1. Determine if you are eligible to file for bankruptcy. You must be an individual who is unable to meet your financial obligations and have debts exceeding $1,000.

2. Choose a Licensed Insolvency Trustee (LIT). You cannot file for bankruptcy without an LIT, as they will guide you through the process and handle the filing.

3. Gather necessary financial documentation including a list of debts, assets, income, and expenses. This information is crucial for your LIT to assess your situation.

4. Your LIT will prepare the bankruptcy documents and file them with the Office of the Superintendent of Bankruptcy (OSB) as per the Bankruptcy and Insolvency Act (RSC 1985, c 10, 2nd Supp, s 49).

5. Upon filing, an automatic stay of proceedings will be put in place, stopping most collection actions against you.

6. Attend the LIT’s initial meeting and participate in a financial counseling session.

7. Complete any tasks assigned by your LIT, such as submitting additional documentation or attending follow-up meetings.

8. After fulfilling all requirements, including any payments to creditors or attending required sessions, the LIT will assist you in obtaining your discharge from bankruptcy, typically within 9 months to 3 years depending on your circumstances (Bankruptcy and Insolvency Act, RSC 1985, c 10, 2nd Supp, s 168).

Refer to sections within the Bankruptcy and Insolvency Act and related regulations for detailed procedures:

• Bankruptcy and Insolvency Act (RSC 1985, c 10, 2nd Supp)
• Regulations (C.R.C., c. 369, s 5)
• Other relevant statutory requirements found in SOR-2007-256 and C.R.C., c. 368.
  
  From: OSB Helper
  
  

Related Questions

Here are the top 5 most frequently asked questions related to filing for bankruptcy, based on common queries and trends in the context of Canadian debt and insolvency:

1. What are the steps to file for bankruptcy?

• The process involves finding a Licensed Insolvency Trustee, signing and filing the necessary paperwork, attending a meeting of creditors, completing bankruptcy duties, and obtaining a Certificate of Discharge[3][5].

2. How do I find a Licensed Insolvency Trustee to help me file for bankruptcy?

• You can find a Licensed Insolvency Trustee through the Office of the Superintendent of Bankruptcy website, which provides a searchable list of authorized trustees[3][5].

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

• You will need to sign an “Assignment” and a “Statement of Affairs,” which include details of your assets, liabilities, income, and expenses[5].

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

• Your allowable assets will be taken possession of by the trustee, liquidated, and the proceeds will be distributed to your creditors[3][5].

5. How long does it take to be discharged from bankruptcy?

• The discharge process typically takes 9 to 21 months, depending on your compliance with bankruptcy duties and whether it is your first or subsequent bankruptcy[3][5].

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

References

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