Do We Have Chapter 7 or Chapter 13 Bankruptcy in Canada?
Chapter 7 / Chapter 13 Bankruptcy in Canada
If you want to learn more about bankruptcy terms and what they mean, then you have certainly come to the right place.
Here you can find out whatever you need to know.
The Bankruptcy Process
There are so many words and phrases that are used to describe the bankruptcy process.
It can be difficult to know what each one means, as there are terms such as Chapter 11, Chapter 7 and even Chapter 13.
It can also be very confusing to navigate what actually applies to personal bankruptcy and corporate bankruptcy.
Chapters are American Laws
Bankruptcy chapters normally refer to American laws.
Bankruptcy laws in the US are governed by the Code of Laws.
The Code has a lot of sections, which are called Titles.
Within those titles are Chapters.
Whenever bankruptcy refers to anything to do with a chapter, it is American.
Canadian VS US
If you want to find out whether you are reading about American bankruptcy or Canadian bankruptcy then you can find out what you need to know right here.
Chapter 7, 11 and 13
Chapter 7 is the most common type of bankruptcy in the US.
It’s possible for a business to apply for Chapter 7 bankruptcy as it applies to both personal and corporate circumstances.
Chapter 11 is also part of the system, but it does not apply to those who live in Canada.
Someone who is being filed under a Chapter 11 petition is normally the owner of a business or corporation.
If you have a very high amount of debt then you may also be able to file under this.
It involves a restructuring process and it gives you a certain period of time to get your business affairs back in order.
In the US, Chapter 13 is a form of bankruptcy.
The term Chapter 13 does not exist in Canada.
What You Need to Know
If you were to find yourself in deep trouble financially in the US, then it is possible for you to file for personal bankruptcy under Chapter 7.
In Canada on the other hand, you would just need to file for personal bankruptcy.
The law is known as being the Bankruptcy and Insolvency Act of Canada.
The only people that refer to this as a law are those who work in the area as a professional advisor.
Chapter 13 is the US law which gives you the chance to organise or settle your debts.
In Canada, this is known as a Consumer Proposal.
A settlement is a plan where you will repay what you owe over a period of 5 years.
It is a way to stop you from having to file for bankruptcy and it gives you the chance to really get things back on track.
If you need help with your financial situation or if you don’t feel as though the situation you are in right now is bad enough for bankruptcy, then there are other solutions available.
Contact Bankruptcy Canada to find out more.