NOTE: Although Bill C-12 has received Royal Assent, the new rules are not yet in force. We do not know when they will come into effect; we assume it will be in early to mid 2008. Please Contact us for more information.
How will Bill C-12 affect the length of the bankruptcy process? Under Bill C-12, Section 168.1 of the Act is amended to lengthen the bankruptcy period in Canada. Under current rules, a first time bankrupt is eligible to be discharged after nine months. The new rules affect the length of bankruptcy as follows:
What does this mean? If you have income over the government allowed threshold (which for a single person is $1,797 in take-home pay per month in 2007), it is likely that length of your bankruptcy process will be extended for a further 12 months, and you will be required to continue to pay that surplus income into your bankruptcy estate for your creditors.
At Hoyes Michalos & Associates we believe that people who can pay a portion of their debts feel better about themselves if they can make payment arrangements with their creditors. These new provisions will no doubt cause more people to avoid bankruptcy by filing a consumer proposal, which for many people is the best solution.
We recommend that you contact our bankruptcy trustee offices for more information on Bill C-12 and the bankruptcy period in Canada, and to help you decide whether or not bankruptcy is the correct option for you.
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