What do you need to do to declare personal bankruptcy and get the legal protection from your creditors provided by the bankruptcy Canada laws? Here are the 7 steps you’ll need to take:
1. Select a Trustee
2. Arrange an Initial Meeting
3. Complete a Financial Information Application Form
4. Meet with the Trustee to Review Your Information
5. Trustee Completes Necessary Paperwork
6. Meet with Trustee to Sign Paperwork
7. Trustee Files Paperwork and a Stay of Proceedings is Issued.
Select a Trustee
Bankruptcy Canada laws require the process be administered by a licensed bankruptcy trustee, so your first step will be to find one. There are differences in the way the laws are handled across the Provinces which necessitates selecting a trustee licensed in your Province, not some friend of a friend who knows somebody in another Province.
The Internet is a good place to begin your search as you can learn a lot about trustees by visiting their websites. Don’t hesitate to take advantage of the free phone consultations offered as you can get solid advice from a quick phone call. At some point, you will have to narrow down your choices and meet with a trustee face to face. This is an important decision as you will be spending a good deal of time with the trustee you select over the course of your bankruptcy.
The Initial Meeting
Initial consultations are free so there is no reason you can’t meet with more than one trustee before you decide. These meetings allow the trustee to begin assessing your financial situation to ensure personal bankruptcy is your best solution. There are alternatives to bankruptcy that some Canadians are not familiar with, and if appropriate the trustee might recommend one of these alternatives. If you are leaning toward bankruptcy, the trustee will provide you with an application form, where you will record details of your current financial situation.
Completing the Application Form
Completing the application involves spelling out all your debts as well as the monthly payments on those debts; your living expenses; all sources of current and projected income; and all that you own – your home, your cars, your personal possessions, and any investment or retirement accounts you have.
Reviewing the Form
The next step is to meet again with the trustee to ensure the form is completed properly and all the information is accurate. Assuming you have had a day or two to think about what you are doing and are ready to proceed, you will ask the trustee to begin preparing the paperwork needed to file. If you’re not ready, you can ask for a few days to think before coming to your final decision.
Completing and Signing the Paperwork
Once you have informed the trustee of your decision he or she will complete the legal paperwork which you will sign.
Filing the Paperwork/Getting a Stay of Proceedings
The trustee will file the paperwork with the Office of the Superintendent of Bankruptcy and you are officially declared bankrupt at the time of the filing.
Bankruptcy Canada law provides for an immediate issuing of a “stay of proceedings” which will force your creditors to cease all collection activities against you, including wage garnishments, bank account attachments, repossession activity, and phone calls and other forms of debt collection communication.