Frequently Asked Questions
Can I keep my car if I declare bankruptcy?
You often can. If the vehicle is leased, you may be able keep it through an agreement with the lessor, provided you make monthly payments. If the value of your vehicle is minimal, you may be able to keep it under certain conditions.
Will I be able to keep my house?
If the value of your home is similar to the balance of your mortgage, you may be able to make an arrangement with your mortgagee. If the value of your home is substantially higher than the balance of your mortgage, you should probably consider other solutions instead of bankruptcy.
Will my furniture be seized?
No, except for valuable furniture, such as art and antiques which are not considered essential.
Will someone come to my home to seize my property?
If you are you are not under the protection of the Bankruptcy and Insolvency Act, creditors may seize your property in certain cases, but no-one may do so following bankruptcy. In nearly all cases the trustee will not visit your home.
Can tax debts be included in a bankruptcy?
Yes, unless they are the result of fraud.
If I declare bankruptcy, how long will it affect my credit?
Usually people experiencing financial difficulties have already affected their credit in some way. A notice will appear in your credit file for six or seven years following a bankruptcy. However, if allowed by your new financial situation, creditors may agree to lend to you again.
What happens to my wages during bankruptcy?
The wages of a bankrupt, including salaries and commissions, etc. are monitored by the Trustee. Each month the bankrupt is required to complete an income and expense statement and forward it to the Trustee. This statement shows the amount of monthly income for the bankrupt's household family unit as well as amounts spent on rent, food, clothing, etc.
The Trustee will provide the bankrupt with a blank income and expense statement for this purpose. The Superintendent of Bankruptcy publishes standards as to the normal maximum amounts required as living expenses for a bankrupt's household family unit. A portion of any income earned in excess of these standards is to be paid by the bankrupt to the Trustee, for the general benefit of the creditors.
Will my employer find out about my bankruptcy?
No, unless your wages were seized before your bankruptcy.
Who will know about the bankruptcy?
Your creditors are notified by mail/fax/email if you have minimal assets. There is no publication in the newspaper. However, all bankrupt filings are public documents.
Are my RRSP'S seizable?
All RRSP’s are unseizable except for the last twelve (12) months’ contributions which are seizable.
Will my creditors stop harassing me?
They should. By law, all actions against you have to stop. Neither secured creditors nor alimony payments are affected by bankruptcy.
How much will this cost me for declaring bankruptcy?
The monthly cost of declaring bankruptcy is determined by your income and government legislation. Since you will no longer have to pay off your debts after the bankruptcy, you will be able to make these monthly payments.
Who pays for the trustees services?
In summary administration bankruptcies, the Trustee's fee is prescribed by the Bankruptcy and Insolvency Act as a tariff and is based on the amount of funds received by the Trustee.
The basic fee covers all services provided by the Trustee including both mandatory counselling sessions and registration fees. Monthly installments or payment in full at the outset of the bankruptcy will be discussed during your initial consultation.
Your monthly or lump sum payment to the Trustee would be included in any Surplus Income Payment requirements.
In ordinary administration bankruptcies where there are significant assets and substantial work for the Trustee to do, the Trustee's fee is based on the number of hours spent by the Trustee's staff at the normal billing rates.
All Trustee's fees are reviewed by the Office of the Superintendent of Bankruptcy and, if applicable, are approved by the Inspectors and the Court.