Qualifying For Bankruptcy
Are you wondering whether bankruptcy is an option available to you when dealing with your debt?
This article will provide all the information that you need.
You might be seeking a fresh start from your financial trouble by claiming debt relief.
It’s possible that you have decided bankruptcy is going to be the right choice for you here.
However, it’s important to understand that bankruptcy isn’t an option that is available to everyone.
There are certain requirements for those who wish to file for bankruptcy.
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What Are The Basic Requirements?
There are four main requirements for people who seek to file for bankruptcy.
The requirements are that:
- You must owe $1000 or more.
- You must not be able to meet the payment requirements when they are due.
- The debt has to exceed the amount you have in assets.
- You need to be a resident of Canada, complete business in the country or own a property.
If these requirements are met, then you will be able to file for bankruptcy.
However, there are other considerations to keep in mind here.
Who Decides If You Are Eligible?
A Licensed Insolvency Trustee or LIT will determine whether you are eligible to claim bankruptcy.
These professionals are also responsible for overseeing any consumer proposals.
A LIT will offer you a free consultation.
This will be used to ensure that you meet the minimum requirements.
Remember, you do need to owe more than $1000 and most people owe significantly more than this.
The next step is to look at your assets as well as your budget.
They will be checking to make sure that you are unable to cover the costs of your debt based on the amount of money that you currently have and that you earn.
If it is determined that you can not afford the cost of your bills based on your earnings and assets, then you are declared insolvent.
You will now be able to file for bankruptcy.
What Happens Next?
Once you are able to file for bankruptcy, you will be able to work with a Licensed Insolvency Trustee.
They will work with you through the process and set up a trust.
They will also oversee the sale of any assets that need to be sold.
While some of your assets will be exempt and you won’t be left with nothing, you will have to sell off some of your things.
The proceeds from the sales that you complete will go towards paying off your creditors.
So, essentially, your LIT oversees your filing and ensures that everything is completed smoothly.
If you are thinking about filing for bankruptcy, getting in touch with a LIT is always going to be your first move.
Bankruptcy is always going to be a major decision in your life.
You need to make sure that you are prepared for the change and that you understand this process.
If you still have questions, contact us today or fill out an evaluation form and we will be happy to assist you further.
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?