Filing for Bankruptcy in Ontario: A Guide for Asset-Free Individuals
Filing for bankruptcy can be an intimidating process, especially for those without assets to their name. This guide aims to provide a comprehensive analysis of the topic “Can a Person with no Assets File for Bankruptcy in Ontario?”. It details the intricacies of Ontario’s bankruptcy process, the role of surplus income in bankruptcy, and how an individual can be released from unsecured debts at the end of bankruptcy.
1. The Possibility of Declaring Bankruptcy Without Assets in Ontario
Yes, even without assets, an individual can file for bankruptcy in Ontario provided they meet the eligibility criteria. The task of declaring bankruptcy is carried out by a certified bankruptcy trustee on the individual’s behalf.
Only authorized insolvency trustees, like David Sklar & Associates, are authorized to file and manage bankruptcies in Ontario.
In scenarios where there are no assets for distribution among unsecured creditors, these creditors must still eliminate their outstanding debt upon successful completion of the bankruptcy.
2. Fairness of Bankruptcy Laws in Canada
Bankruptcy laws in Canada are designed to ensure equitable treatment for all parties involved, including the debtor and their unsecured creditors.
If a debtor possesses assets, both federal and Ontario governments have specified certain assets that are exempt from seizure during bankruptcy.
3. The Role of Surplus Income in Bankruptcy
The concept of surplus income plays a crucial role in bankruptcy. It is essentially the total family income after deducting permissible expenses such as medication and child support. This amount is then compared with the number of family members to determine if surplus income exists.
4. The Determination of Surplus Income
The Superintendent of Bankruptcy sets guidelines for determining surplus income. A Licensed Insolvency Trustee will explain these guidelines in detail to the individual filing for bankruptcy.
If surplus income is determined, the individual will be required to contribute 50% of the surplus to their estate for distribution among their unsecured creditors.
5. Impact of Surplus Income on Bankruptcy Period
The presence of surplus income can extend the bankruptcy period. For individuals filing for bankruptcy for the first time, the bankruptcy period can be extended from 9 months to 21 months if surplus income is identified.
6. Release from Unsecured Debts Following Bankruptcy
Upon the completion of the bankruptcy period, if all bankruptcy terms have been honored, including filing monthly reports, attending credit counselling sessions, and making required monthly payments, the individual will be released from the unsecured debts included in the bankruptcy.
However, it’s important to note that not all unsecured debts can be included in a bankruptcy. Obligations like child support, alimony, court fines, and some student loans are immune to bankruptcy discharge.
7. Professional Guidance on Bankruptcy
A trustee will provide detailed guidance throughout the bankruptcy process. Hence, individuals considering bankruptcy should seek the advice of a Licensed Insolvency Trustee.
8. Seeking Help for Bankruptcy in Ontario
If you find yourself grappling with financial issues and seeking relief, consider reaching out.
Contact us today to explore your debt relief options and start your journey towards financial freedom.
9. Conclusion
In conclusion, even without assets, an individual can file for bankruptcy in Ontario. The process, although complex, can be navigated with the help of a Licensed Insolvency Trustee. It’s important to understand the role of surplus income in bankruptcy and the possibility of being released from certain unsecured debts at the end of the bankruptcy period.
