Many may consider filing for bankruptcy in Ontario because, unfortunately, maintaining financial health in the province isn’t always the easiest thing to do. You may have family expenses, car loans, mortgage payments or rent – the list goes on and on, and can pile up quickly. Anyone, regardless of age, gender or background, can come to a point where staying ahead of their debt and keeping on top of payments becomes too much.
When individuals reach this point, they are often forced to turn to options such as bankruptcy in order to resolve their financial woes. However, before you turn to this option, here are 5 important things you need to know about the process of filing bankruptcy in Ontario.
1) Bankruptcy should be a last resort
If the time has come when you are seriously considering filing for bankruptcy, keep in mind that it is a route to take only when you have exhausted all other viable alternatives. For example, in Ontario you can opt for debt consolidation, a personalized debt management program or file a consumer proposal. Only after you have talked to a professional and determined that these are not feasible options should you file for bankruptcy.
2) You can’t go it alone
Once you have made the decision to file for bankruptcy in Ontario, you will need to enlist the help of a trustee. Why? Trustees are licensed by the Canadian government and are the only professionals that can actually file bankruptcy in Ontario on your behalf.
3) You will need to inventory and assign your assets
In order to file bankruptcy in Ontario, you will need to complete and file an Assignment and a Statement of Affairs. The first form indicates that you are handing over your property to the trustee; the second is a list of your assets, liabilities, income and expenses. After you have completed these two legal forms, your trustee will ensure that they are properly filed. Under Ontario law you are permitted to keep your basic possessions, including a basic car, so you should consult your trustee in advance to determine if you will lose any assets when you file bankruptcy.
4) You will have to perform certain duties
There are things you will need to do while you are bankrupt. You are required to attend a meeting of creditors if one is called, although this is rare. You will be required to report your household income and living expenses monthly so your trustee can calculate if you will be required to make surplus income payments during your bankruptcy. You will also be required to attend two credit counselling sessions about personal budgeting and money management. While these are the main duties you will be required to perform, there are others. Your trustee will outline these responsibilities before you file.
5) Your time until discharge from your debt depends on a few factors
How long before you are discharged from your debt via bankruptcy is dependent upon certain criteria. For first time bankrupts, an automatic discharge after 9 months is common, unless you have surplus income, have failed to perform the legal duties required during bankruptcy, or your creditors object. Your trustee will be able to give you an estimate of how long you will be bankrupt before you file, however the ultimate period will depend upon you.
It is important to understand how the process works prior to filing for bankruptcy in Ontario. If the option is appropriate for your particular case, bankruptcy can help you stop wage garnishments, stop collection calls, resolve your debt issues and give you a chance at a fresh financial start.
If you think filing for bankruptcy in Ontario makes sense for you. Contact Hoyes, Michalos & Associates today. We can help you get started.