Bankruptcy Manitoba

Advantages of Filing for Bankruptcy in Manitoba

Immediate Protection from Creditors

One of the significant benefits of filing for bankruptcy in Manitoba is the immediate protection it offers from your creditors. Once you file for bankruptcy, an “automatic Stay of Proceedings” comes into effect. This means that collections calls, wage garnishments, frozen bank accounts, and legal actions against you will stop. This relief provides you with the space and time you need to address your debt problems without constant pressure from creditors.

Elimination of Unsecured Debts

Bankruptcy in Manitoba allows for the elimination of most unsecured debts. Upon receiving a discharge from bankruptcy, you are no longer obligated to pay the unsecured debts that were discharged. However, certain debts such as child support and alimony, student loans less than 7 years old, court fines and penalties, and debts resulting from fraud or misrepresentation cannot be discharged through bankruptcy.

Fresh Financial Start

Once your unsecured debts are behind you, bankruptcy offers you the opportunity to create a financial plan that aligns with your priorities. You can focus on building a better financial future for yourself and your family, free from the urgent demands of debt collectors. Bankruptcy can provide a fresh start where you can make informed financial decisions and learn from past mistakes to avoid falling into significant debt again.

How to File for Bankruptcy in Manitoba

Filing for bankruptcy in Manitoba involves a straightforward process that begins with finding a Licensed Insolvency Trustee (LIT) and ends with the discharge of your bankruptcy. Here are the steps involved:

Step 1: Find a Licensed Insolvency Trustee (LIT)

To initiate the bankruptcy process, you need the assistance of a Licensed Insolvency Trustee. LITs are professionals authorized, licensed, and regulated by the Federal government of Canada to guide individuals through bankruptcy. They provide financial counselling, communicate with your creditors, and manage any payments received on behalf of your creditors.

Step 2: Meet with Your Licensed Insolvency Trustee

Before proceeding with bankruptcy, it’s essential to explore all your debt relief options. Your Licensed Insolvency Trustee can provide you with a comprehensive review of your current financial situation and discuss the various solutions available to you. This initial consultation will help you make an informed decision about whether bankruptcy is the right path for you or if an alternative solution would be more suitable.

Step 3: File for Bankruptcy

If you decide that bankruptcy is the best option for your circumstances, your Licensed Insolvency Trustee will guide you through the necessary paperwork. You will need to provide personal details, a list of creditors, and a list of your assets. Your LIT will review the documents with you to ensure accuracy and your understanding of the process. Once you sign the paperwork, your bankruptcy begins, and your creditors will be notified.

Obligations and Duties during Bankruptcy

Once you file for bankruptcy in Manitoba, you will have certain obligations and duties to fulfill as outlined in the Bankruptcy and Insolvency Act of Canada. These include:

1. Monthly Income Statements: You are required to provide a monthly income statement to your Trustee, which outlines your income and expenses during the bankruptcy period.

2. Credit Counselling Sessions: Attendance at two mandatory credit counselling sessions is mandatory. These sessions provide valuable financial education and guidance to help you manage your finances more effectively.

3. Updated Contact Information: It’s crucial to keep your Trustee updated with your current contact information throughout the bankruptcy process.

4. Tax Information: You must provide your Trustee with relevant tax information so that your tax returns can be filed accurately.

Additionally, you will be required to make monthly payments to your Trustee. The amount of these payments is determined based on your ability to pay, considering the guidelines set by the federal Superintendent of Bankruptcy. If you have excess income, you will be required to contribute 50% of that income to your Trustee for the benefit of your creditors.