If you are having trouble paying your extensive monthly bills, you might consider filing personal bankruptcy. The Bankruptcy and Insolvency Act (BIA) in Canada was created by the Office of Superintendent of Bankruptcy to ensure the laws were being followed fairly for the debtor and creditor. A procedure has been put in place to make the process equitable to all parties involved.
- Meet with a Bankruptcy Trustee
A trustee will counsel you to determine if bankruptcy is the best option under the circumstances. It might be possible to file a Consumer Proposal to pay off a portion of your debt. You fill out a questionnaire and they will assess your budget, debt, and assets to determine if you qualify for one. However, if that is not a viable option, they will get the process started for you.
- Assignment of Bankruptcy
Once you file, your assets and debts become frozen, meaning they cannot be accessed, nor can creditors continue to come after you for payment. Some of your assets do not have to be included in bankruptcy such as a vehicle that is worth $6,500 or less, any personal or household items valued less than $5,000, tools of the trade estimated to be less than $6,000, or a company pension plan.
The majority of your debts can be included in the bankruptcy except for a few key items such as student loans, any restitution ordered by the Court, debts associated with alimony or child support, and court-awarded damages. All credit cards have to be relinquished to the trustee and they need to be made aware of all creditors and debts you owe.
- Counseling Sessions
Another requirement when filing personal bankruptcy in New Brunswick is attending two counseling sessions. The first has to be conducted within two months of filing, and the second sometime between six and eight months afterwards. Even though your debts will be discharged, the hope is to not repeat the same mistakes again.
- Complete the Bankruptcy
Once you have attended the counseling sessions, your next step is to pay the bankruptcy trustee for their services. This payment is determined by your current income and can be paid in a lump sum or recurring payments. File monthly expense and income reports with the trustee and give them the proper paperwork to file your tax return during the year you file. If you have less than $15,000 in debt being cleared, you may qualify for a Summary Administration which is swift and you do not have to meet with your creditors nor put an article in the newspaper about the bankruptcy. If you do not, then an Ordinary Administration is conducted where the latter two options have to occur.
This sounds like a lengthy process, however the bankruptcy trustee is there to help you through each step.
If you need help with a personal bankruptcy in New Brunswick, please contact Powell Associates Ltd. At (506) 638-9220.
