Your Top Six Canada Bankruptcy Questions Answered 0
If you are considering filing for bankruptcy, you inevitably have questions regarding the process, how long it takes, and what to expect after bankruptcy. The following answers to top Canada bankruptcy questions will help you better understand the process:
Do I have other options?
Yes. Your bankruptcy trustee can help you understand your options. This may include a consumer proposal, which allows you (with the help of the trustee) to amend the terms of your debt to an amount or payment term you can both agree to. Typically, this is done by forgiving a portion of the debt or extending the length of the payment terms of the loan. Certain criteria needs to be met in order to qualify for a consumer proposal, a bankruptcy trustee can review your situation to see if you qualify and if it’s a good solution based on your financial needs.
Will I lose my home?
Whether or not you get to keep your home depends on where you live and how much equity is in the home. Each province has different exemption allowances for home equity. It’s important to consult with a bankruptcy trustee in your province that has knowledge of the asset exemptions where you live.
How long does the bankruptcy take?
If you have never filed for bankruptcy before, your bankruptcy can be discharged in as few as 9 months. This means that all your unsecured debts are legally eliminated (exceptions to this are taxes and child or spousal support payments). If you are filing bankruptcy for a second time or are required to make payments to the bankruptcy estate as a result of surplus income it will take longer to be discharged.
What happens to my credit?
Unfortunately, nothing hurts your credit worse than a bankruptcy. It will also stay on your credit report for 6 to 7 years depending on the reporting bureau, making it difficult to make large purchases on credit. The good news is that you can start rebuilding your credit immediately after you’ve been discharged from bankruptcy, and once the 7 years is up, the bankruptcy notation will be completely removed from your credit.
Does it cost money to file for bankruptcy?
Yes. There are a number of fees associated with filing for bankruptcy, including filing fees, court fees, and the trustee’s fees for his or her services in assisting you with gathering all the necessary paperwork.
Can anyone file for bankruptcy?
In order to file for bankruptcy, you must have at least $1,000 in debt. You must also be able to prove that you are insolvent and no longer able to meet your financial obligations, whether through loss of income, divorce, or unemployment.
If you are considering bankruptcy, your best bet is to take a good look at your financial situation and document your assets, debts and income. From there, a bankruptcy trustee can help you determine the best course of action.