Bankruptcy Counselling in Toronto

The decision to file bankruptcy is an important one and not one that should be taken lightly. The staff at Maria Rickard & Associates can help you through this difficult time and find you the best option for your situation. Continue reading to learn more about the process of filing bankruptcy then contact us if you have any questions about our bankruptcy counselling in Toronto.

WHO CAN GO BANKRUPT?

In order to declare bankruptcy, an individual has to meet certain conditions:

• Owe at least $1,000
• Be unable to meet regular payments as they fall due; and
• Own insufficient property to enable payment of all debts.

In general, bankruptcy is deemed the best solution only for those who cannot consolidate their debts at a reasonable cost over an appropriate period of time.

1. STAY OF PROCEEDINGS

The filing of a bankruptcy halts all garnishments, lawsuits, or Court proceedings initiated or that may be initiated.

2. DISCHARGE

If it is the first time a debtor has gone bankrupt and the debtor has complied with his duties, then the bankrupt is entitled to an automatic discharge:

1.) On the expiry of 9 months after the date of bankruptcy, if he has no surplus income as determined by the Superintendent’s Standards on Surplus Income.

OR

2.) On the expiry of 21 months after the date of discharge where the bankrupt is required to make payments under Section 68 of the BIA to the estate, as per the Superintendent’s Standards on Surplus Income.

If the debtor has filed a previous bankruptcy then the automatic discharge provisions:

1.) On the expiry of 24 months after the date of discharge if there is no surplus income.

OR

2.) On the expiry of 36 months after the date of bankruptcy if there is deemed surplus.

EXCEPTION:

Bankrupts with personal income tax debt in an amount exceeding $200,000, representing 75 percent of the debt, will not be eligible for an automatic discharge and an application to the Bankruptcy Court will be made to determine the type of discharge to be granted.

Upon obtaining the discharge, the bankrupt is released from all debts, except for:

• Fines or penalties imposed by a court or default on bail bond
• Alimony or support of child or spouse
• Fraud, embezzlement, misappropriation or defalcation
• Non-disclosure to the trustee (these creditors will be entitled to the dividend that would have been paid if a claim had been submitted in the bankruptcy
• Any debt owed to Canada Student Loans, or Ontario Student Assistance Program, where the date of the bankruptcy occurred within seven years of the debtor leaving school

3. PROPERTY OF THE BANKRUPT

The assets of the bankrupt, whether in the possession of the bankrupt or in the possession of a third party, will belong to the trustee for the creditors, whereas assets belonging to others will be turned over to them when their claims are proven.

Where a creditor holds security against any asset, he will normally be allowed to exercise his rights.

EXEMPT PROPERTY

The trustee will not take possession of certain assets because they are exempt from seizure under the laws of the province of residence. Exempt property will vary from one province to another. In Ontario exempt assets include:

• VEHICLE - $6,600
• TOOLS OF THE TRADE - $11,300
• FURNITURE - $13,150
• PERSONAL EFFECTS – $5,000
• EQUITY IN YOUR HOME - $10,000
• HOUSEHOLD - $13,150

4. DUTIES IMPOSED UPON THE BANKRUPT

The bankrupt must fulfill all of the following duties:

• Reveal and turn over to the trustee all assets in the debtor’s possession or control
• Make available to the trustee all books and records relating to assets or affairs
• Attend at the Office of the Official Receiver, if and when requested, to be examined under oath as to the facts relating to the bankruptcy
• Provide a complete statement of assets and liabilities including creditors’ names, addresses, account numbers, invoices and amounts. Where the bankrupt receives additional bills or legal documents, they should be forwarded to the trustee. If assets were accidentally omitted, the trustee must be informed promptly
• Inform the trustee of the details of all property disposed of during the twelve months prior to the bankruptcy
• Inform the trustee of the details of all property disposed of by gift during the five years prior to the bankruptcy
• Keep the trustee advised of place of residence 
• Pay any amounts prescribed by the Superintendent Surplus Income Guide (see attached).
• The bankrupt must attend two mandatory counselling sessions.

If you are experiencing a difficult financial time, it is best to seek the help of an experienced professional. Contact Maria Rickard & Associates for bankruptcy counselling in Toronto. We will be able to determine the best option for your unique financial situation.

Credit Bureau Information

Information regarding a bankruptcy remains on the credit bureau for 6 years after the discharge, but a bankrupt can re-establish their credit as soon as they are discharged.