What is Bankruptcy?
Bankruptcy is a legal proceeding available to a person or corporation in order to cope with a financial crisis. One of the main purposes of bankruptcy legislation is to afford the opportunity to a person hopelessly burdened with debt and give him or herself a fresh financial start.

What happens to my debts?
Most collection actions, lawsuits and wage garnishments are suspended upon filing bankruptcy. Your creditors will be advised to stop contacting you and to deal directly with your trustee. In most cases, upon your discharge from bankruptcy, you are released from all debts.

Do I qualify?
Bankruptcy is a legal process which provides the bankrupt with immediate relief from most legal actions by creditors. It is intended to provide the honest debtor with the ability to start over by eliminating most, if not all, of his or her debts.

To qualify you must:

How much can I earn?
When you declare personal bankruptcy, one of your duties as a bankrupt will be to prepare and submit to the Trustee, a monthly budget detailing your income and expenses.

The Superintendent of Bankruptcy provides a series of income thresholds above which you will be required to make payments to the Trustee for the benefit of your creditors. The income thresholds are determined primarily by the number of persons in your family.

What can I keep? (The Bankruptcy and Insolvency Act exempts certain assets from seizure:)

• Consumer proposal
• Debt consolidation loans
• Arrangements with creditors
• Budget changes

If your problems are so serious that debt consolidation or other remedies are not practical, then a consumer proposal or personal bankruptcy may be an alternative.

How to proceed
Please contact our office to arrange for a free, confidential initial consultation.

How much does it cost?
The cost of administering a bankruptcy depends on a variety of factors, including the complexity of the bankrupt's affairs. The Superintendent of Bankruptcy regulates the fees charged by Trustees. We can tailor your fee payment schedule to meet your individual situation.

What about secured creditors?
In a bankruptcy, secured creditors are those creditors holding a properly registered charge over assets pledged as security for a debt. The Trustee will take possession and realize, on behalf of the bankrupt's estate, any equity on the pledged asset. The secured creditor will have the option of realizing on their security, or alternatively making whatever new arrangements with the debtor as is agreeable to the debtor.

What about a proposal or debt consolidation arrangement?
A proposal offers an alternative to bankruptcy. For example, you may ask the creditors to reduce the amount owing to them or request more time to pay the amount due. The terms of a proposal are often very flexible but must be completed within five years and must offer creditors at least what they would be paid in a bankruptcy. A thorough analysis of assets, debts, and cash flow is necessary to determine if a proposal is viable. 

Please call our offices in Toronto, Whitby, Kingston and Brockville for further information.