A Comprehensive Guide to the Bankruptcy Assistance Program
The Bankruptcy Assistance Program (BAP) is an initiative designed to help individuals who are unable to afford bankruptcy filing costs. It provides an opportunity for those who lack the financial means to navigate the Canadian bankruptcy system.
Established in 1993 under the Bankruptcy and Insolvency Act, the BAP is overseen by the Office of the Superintendent of Bankruptcy (OSB) of the Government of Canada. It aims at making the process of filing for personal bankruptcy accessible for those unable to bear the usual costs.
The Financial Implications of Bankruptcy
Despite the OSB’s regulation of bankruptcy filing fees, the process can be unaffordable for many low-income individuals. The overall cost involves the fees for the services of a Licensed Insolvency Trustee (LIT), court filing fees, document filing fees, and additional charges. These expenses can accumulate quickly, making the bankruptcy process out of reach for those who might need it the most.
The Cost of Filing for Bankruptcy
The total cost of filing for bankruptcy varies based on several factors including:
- Your net disposable income;
- The total debt you owe;
- The value of your assets;
- The size of your family;
- Previous bankruptcy declarations;
- Your city of residence.
The BAP matches eligible individuals with a Licensed Insolvency Trustee who participates in the program, and helps them commence the bankruptcy process at a minimal fee.
The Bankruptcy Assistance Program’s Payment Options
The BAP allows participants to devise a manageable payment plan spread over a period of up to nine months. In some extreme cases, the program may even waive the fees entirely if it is clear that the debtor is unable to afford the necessary amount, even with adjustments.
Who Can Qualify for the Bankruptcy Assistance Program?
Eligibility for the Bankruptcy Assistance Program is not universal. To qualify, you need to meet several conditions:
- You must not be incarcerated at the time of filing
- You should not have been, or currently be, involved in commercial activity demanding substantial administrative or investigative work from the trustee
- You must not be required to make any surplus income payments, even after being accepted for the BAP. If your income rises after acceptance and you have surplus income, you will become ineligible.
This list is not exhaustive, and the OSB may have additional requirements when you apply for the BAP. It’s important to thoroughly read all the provided information.
The Application Process for the Bankruptcy Assistance Program
The process of applying for the BAP is relatively straightforward, assuming you qualify. It involves three simple steps:
Step 1 – Reach Out to the OSB
You must visit the OSB website and request a BAP registration form and information package. Alternatively, you can contact the OSB via their toll-free number 1-877-227-3672, and explain your situation and reasons for needing the program’s assistance. Once your request is received, the OSB will send you the information package containing the registration form and a list of Licensed Insolvency Trustees in your area who participate in the program.
Step 2 – Consult with Listed Trustees
You are required to consult with two LITs from the provided list. They will examine your financial situation and discuss your options. If you are eligible for the BAP, the trustees will sign the registration form. You must acquire signatures from two trustees before submitting the registration form to the OSB. After submission, you will be assigned a trustee from the list of those participating in the BAP.
Step 3 – Submit the Registration Form
After receiving signatures from two trustees, submit the completed registration form to the OSB. This serves as proof that you are unable to afford typical trustee fees and genuinely require financial assistance for your bankruptcy filing.
Once approved, the OSB will assign a trustee under the BAP to handle your filing. They will also notify credit bureaus about your financial insolvency and your decision to declare bankruptcy. This service requires payment, albeit at a lower rate than if you were filing without the BAP’s assistance.
Is Bankruptcy the Right Choice for You?
In 2022, 100,184 insolvency filings were made in Canada, with 24,586 bankruptcies and75,598 consumer proposals. The Office of the Superintendent of Bankruptcy reports that the top five reasons for financial difficulty included loss of income, medical reasons, relationship breakdowns, business failure, and tax liabilities.
Declaring bankruptcy might be the best course of action if you’ve exhausted all other debt management options. In some cases, the weight of debt can be so overwhelming that the only viable solution is to eliminate it entirely and start anew. Bankruptcy can offer this fresh start.
If you’re experiencing financial difficulties, remember that help is available. Book a free, confidential appointment with us today to explore your options. Each financial situation is unique, and we’ll work with you to find the most suitable solution. There’s no obligation to proceed until you feel ready. Contact us today and embark on your journey towards a brighter financial future.
