Many potential bankrupts have very little knowledge of the significance and implication of the Bankruptcy process. The purpose of this website is to explain in simple terms the duties, restrictions, and responsibilities imposed on a bankrupt.
WHAT IS BANKRUPTCY?
It is a legal process that provides immediate relief to an overburdened debtor by halting legal actions by creditors (garnishments, seizures, lawsuits, etc.); afterwards, it results in eliminating the majority, if not all, of the debts.
While the bankrupt may normally keep furniture, clothing and personal effects, the assets exceeding provincial exemptions will have to be turned over to the trustee who will realize on them and distribute the proceeds among the creditors. (Ontario Exemption values – Furniture - $10,000 and Personal Effects - $5,000, Vehicle - $5650.00, and Tools of the Trade - $10,000)
The process is intended to provide financial rehabilitation for the debtor and a new start in life.
WHAT IS A CONSUMER PROPOSAL?
It is a legal process which allows you to make a settlement offer to your creditors. If your creditors accept the offer, then you and your creditors are bound by the agreement. In a Proposal, since you are offering a settlement and not asking for debt forgiveness, any assets that are in your name remain with you, the trustee does not take any possession of assets.
Maria Rickard & Associates Inc, bankruptcy trustee in Toronto and Sault Ste. Marie, for your free consultation today.