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Personal Bankruptcy Solutions in Ottawa & Eastern Ontario
What is Bankruptcy?
Bankruptcy is a formal procedure under the Bankruptcy and Insolvency Act (BIA) that provides financial relief to those who are unable to pay their unsecured debt. It is intended to give a person experiencing financial difficulty an opportunity to have a fresh start.
If you choose this option, your bankruptcy trustee will file the bankruptcy and notify your creditors. Your trustee will collect and sell your non-exempt assets, or in some cases, make an arrangement for you to retain the assets, including any acquired during your bankruptcy and before your discharge. When completed, a Final Statement of Receipts and Disbursements will be prepared, and the appropriate funds, called a dividend, will be distributed to your creditors.
You will need to report your income to the trustee monthly and may be required to make “surplus income” payments for distribution to your creditors. You are also required to attend two financial counselling sessions.
You are generally discharged from your bankruptcy between 9 to 36 months. A discharge after 9 months is common if you are a first time bankrupt and you have no surplus income to pay. The bankruptcy period is at least 21 months if you have surplus income. If it is a second bankruptcy, the bankruptcy can be between 24 and 36 months.
What are the Warning Signs of Impending Bankruptcy?
There are many warning signs of an impending personal bankruptcy situation. Some of these signs are tremendous financial and emotional stress resulting from:
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Difficulty paying bills
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Selling your assets to meet payments to your creditors
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Borrowing on your credit card(s) & obtaining new ones
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Paying only the minimum amount due
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Using one credit source to pay for another
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Relying on payday loans
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Credit refusal and legal problems
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Legal actions and creditors garnishing your pay
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Income tax arrears
Do I Qualify?
If you owe at least $1,000 and you are unable to pay your debts, and your assets would not cover the debts you owe (i.e., you are insolvent), you will qualify for personal bankruptcy. However, the option of bankruptcy may not be the best choice for you, especially if you have a steady or surplus income. Bankruptcy is an option to be considered only after a thorough examination of your options with a trustee. Instead, you may consider filing a consumer proposal to reduce the amount of time it takes to repair your credit rating.
How is the Amount I Pay Calculated?
Each month, you will be required to pay an amount determined by the BIA to your bankruptcy trustee. You may be required to make “surplus income” payments, which is the amount of your earnings above the amount deemed as necessary to maintain a reasonable standard of living.
What Types of Debt are Included or Excluded?
The types of debt you are released from in your bankruptcy are those which existed at the date of filing. Debts which are not discharged and for which you will be responsible for after the discharge are generally:
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Child and spousal support owed
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Student loans (if you file less than 7 years after being a student)
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A fine or penalty imposed by the court
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Debts arising from fraud, embezzlement or misappropriation
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Debts arising from obtaining property or services through fraud
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Court imposed fines
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Bail bonds or orders
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Damages from wrongful death or sexual assault
Benefits of Filing for Personal Bankruptcy
There are several advantages to filing for bankruptcy, including:
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Legal action from creditors will immediately halt
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Calls from collectors/creditors will stop
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Your wages will not be garnished any longer
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Certain assets are protected (e.g., your home, RSPs); and
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You can resolve your debt problems and have a fresh start without the stress of your existing financial situation.
Speak to a Trustee about Your Personal Bankruptcy Options in Ottawa
At D. & A. MacLeod Company Ltd., we are Licensed Insolvency Trustees. One of our professionals in Ottawa or Eastern Ontario can meet with you to answer the questions you may have about personal bankruptcy. Let us assist you on the road to a new beginning™. We have 8 locations including Ottawa, Kingston, Brockville, Cornwall, Kanata, Pembroke, Orleans, and Smiths Falls.
Let our family assist your family. Contact us today for a free consultation online or at 613-236-9111.
