What it means to file for Personal Bankruptcy is important to investigate prior to moving forward with such a serious action. Personal bankruptcy is a complex legal action that is partly sanctioned by the Canada Bankruptcy and Insolvency Act. This is a legal and financial process that should never be entered into lightly. Individuals considering bankruptcy should take time making sure this is the right decision for their particular situation. They should also consult with a with a Bankruptcy Trustee. In Ontario, according to statute, all personal bankruptcies are to be filed be filed by a Bankruptcy Trustee.

There are certain eligibility requirements individuals must meet in order to file for Bankruptcy. If you reside in Canada and owe more than one thousand dollars, and are 18 years of age or older, and can additionally prove you have investigated all other debt repayment options then you are eligible to file for personal bankruptcy.

Once you have made the decision to file bankruptcy, it is important to find a licensed Trustee. When you meet with your bankruptcy trustee, you will spend this time reviewing your financial profile and determine a feasible debt repayment plan. At the close of the meeting, your Trustee should have a clear picture of your financial situation and will be able to advise guide you on the types of actions to take during your bankruptcy. They will also be able to confirm if bankruptcy is the right course of action to take.

There are certain procedures to follow when filing bankruptcy. The Trustee you hire to work on your case will guide you through all of the required paperwork. On all of the correct forms are completed, the Trustee will be able to file your bankruptcy with the Office of the Superintendent of Bankruptcy.

Once the paperwork is filed and accepted, your bankruptcy is officially on the record. Now that you are in bankruptcy, your payments to unsecured creditors will cease. Debtors will no longer directly communicate with these creditors. All payments from this point forward will be made to the Trustee. The Trustee will distribute the payments to the creditors based on the stipulations of the bankruptcy. Because you are in bankruptcy, creditors cannot take legal action against you. They also cannot contact take you regarding any collections of the debt.

The next step would be the sale of any assets. The Trustee will help you sell off any of your non-exempt assets. The proceeds from the sale of your assets will be distributed, by the Trustee, to your existing creditors. Fortunately, in most cases assets such as real estate does not have to be sold.

There are several other items that are exempt from seizure. The Trustee will know what these items are. It will depend on your particular situation. In accordance with the Ontario Execution Act, some of these items exempt from seizure may include some of the following; clothes, furniture, food, tools and automobiles. This items are exempt up to a certain value, the Trustee will have this information.

The Trustee will send notifications to all creditors. Sometimes a creditor’s meeting will be called that the debtor must attend. Or there may be a request from the Office of the Superintendent of Bankruptcy to review your case. The debtor will be required to attend credit counselling to learn how to properly handle their finances. The trustee will report on the debtors progress regarding the bankruptcy. The final step would be a discharge hearing. This is basically what it means to file for personal bankruptcy.

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Category: Finances
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