Personal Bankruptcy Winnipeg

Filing Bankruptcy in Winnipeg: A Comprehensive Guide

Confronting the reality of mounting debts can be overwhelming and intimidating. In such situations, individuals often find themselves contemplating, “Should I file for bankruptcy?” If this question is haunting your peace of mind, then this guide to filing bankruptcy in Winnipeg can serve as an initial step towards your financial recovery.

Understanding Winnipeg Bankruptcy

Bankruptcy is a legal proceeding that provides an opportunity for individuals or businesses, unable to meet their financial obligations, to start fresh. By filing bankruptcy, you can receive protection from further collection efforts from your creditors.

301 – 1661 Portage Ave., Winnipeg, MB, R3J 3T7 

Winnipeg Personal Bankruptcy Office

The Role of Licensed Insolvency Trustee (LIT)

To file a bankruptcy assignment, the services of a Licensed Insolvency Trustee (LIT) are indispensable. LITs are the only professionals in Canada licensed to administer consumer proposals and bankruptcies. They thoroughly review your financial situation, guide you through the process, and help you understand the various debt relief options.

Remember, always be cautious of non-LIT professionals who promise to assist you with your debt. Approach an LIT directly to avoid unnecessary upfront fees.

The Process of Filing Bankruptcy in Winnipeg

The procedure of filing bankruptcy is regulated by the Bankruptcy and Insolvency Act of Canada (BIA). It primarily involves three steps:

1. Evaluation of Financial Situation

Together with your LIT, you need to review your financial situation and consider the various options available for debt relief. The LIT explains each alternative, helping you decide the most suitable option for your circumstances.

To qualify for filing bankruptcy, you must:

  • Owe at least $1,000;
  • Be unable to pay your debts when they are due.

2. Information Collection

Your LIT will collect necessary information, such as:

  • Your personal details;
  • Details of your income and any ongoing garnishments;
  • A list of your creditors and the amounts owed
  • A list of your assets;
  • Information on any recently disposed assets.

After collecting this information, the LIT prepares the paperwork required for filing the bankruptcy with the federal government.

3. Filing the Bankruptcy

On filing the bankruptcy, you receive legal protection from your creditors, known as a “Stay of Proceedings”. Collection agencies are prohibited from contacting you, wage garnishments (except for child or spousal support) cease, and your LIT communicates with your creditors henceforth.

Your Responsibilities During Personal Bankruptcy

During your bankruptcy period, you are required to fulfill certain responsibilities:

  • Provide monthly income statements;
  • Make monthly payments to your LIT, based on your ability to pay according to national guidelines;
  • Attend two credit counseling sessions with your LIT.

The Impact of Bankruptcy

Filing bankruptcy in Winnipeg will affect your credit rating, reducing it to R9, the lowest rating possible. However, your LIT can advise you on ways to rebuild your credit rating as quickly as possible.

Alternatives to Bankruptcy

Bankruptcy is not the only solution for debt problems. Depending on your situation, alternatives such as consolidation loans, debt repayment programs, debt settlement options, or a Consumer Proposal could be more suitable.

Consolidation & Debt Repayment Plans

Consolidation does not always involve borrowing more money. Credit counseling organizations can consolidate your monthly payments, helping you pay off your debts while saving thousands in interest and fees.

Settling Your Debts

Debt settlement is another viable option, where a lump sum of money is offered to your creditors to pay back part of what you owe.

Consumer Proposal

A Consumer Proposal is a legal alternative to bankruptcy, where you make monthly payments to repay part of what you owe.

Choosing the Right Option

Choosing the right debt relief option largely depends on your individual circumstances. A trained and certified Credit Counselor can help you make an informed decision.

Post-Bankruptcy Considerations

After filing bankruptcy, your income tax refund will be affected, and you will need to attend mandatory financial counseling sessions. Also, your credit rating will be impacted, but you can rebuild it with hard work and good financial habits.

Impact on Spouse

Generally, your bankruptcy does not directly affect your spouse. However, if your spouse has guaranteed or co-signed for your debts, they will remain responsible for the payments unless they too file for bankruptcy.

Conclusion

Filing bankruptcy in Winnipeg is a serious decision that should be taken after careful consideration and consultation with a Licensed Insolvency Trustee. It’s a process that offers a fresh start to those struggling with unmanageable debts, but it also brings along certain responsibilities and impacts that one must be prepared for.

Reach out today for a free consultation in complete confidence and with no obligation. Take the first step towards resolving your debt issues and gaining back your peace of mind.

Contact Us Today