How to Declare Bankruptcy in Saskatchewan

How to Declare Bankruptcy in Saskatchewan

Declaring bankruptcy is often perceived as a last resort for individuals and businesses struggling with overwhelming debt. If you reside in Saskatchewan and find yourself contemplating this decision, it’s essential to understand the process and implications. This comprehensive guide will walk you through the steps and provide vital information on how to declare bankruptcy in Saskatchewan.

Understanding Bankruptcy

Bankruptcy is a legally declared inability or impairment of the ability of an individual or organization to pay their creditors. In Saskatchewan, as elsewhere in Canada, this process is governed by the Bankruptcy and Insolvency Act.

Who Can File for Bankruptcy?

Any person who owes at least $1,000 and cannot meet their debts as they become due is eligible to declare bankruptcy. This includes both individuals and businesses.

Role of a Licensed Insolvency Trustee

To file for bankruptcy in Saskatchewan, you must engage the services of a Licensed Insolvency Trustee (LIT). An LIT is a professional licensed by the Canadian government to help individuals and businesses navigate the bankruptcy process.

Finding a Licensed Insolvency Trustee

You can locate an LIT through various means, including the yellow pages of the phone book or via an online search of the Office of the Superintendent of Bankruptcy’s trustee registry. The LIT’s fee will typically be covered by the assets in your bankruptcy estate.

The Bankruptcy Process

Initial Consultation

Your first meeting with the LIT will involve a comprehensive review of your financial situation. The trustee will provide information on all available options and help determine if bankruptcy is the most suitable course of action for you.

Filing for Bankruptcy

If bankruptcy is deemed the best solution, the LIT will prepare the necessary paperwork for you to sign. Once signed and filed with the Office of the Superintendent of Bankruptcy, you will be officially declared bankrupt.

Duties During Bankruptcy

During the bankruptcy process, you will be required to perform certain duties. These include disclosing all your assets and liabilities to the trustee, attending mandatory counselling sessions, and providing the trustee with monthly income and expense statements.

Impact of Bankruptcy

Discharge from Bankruptcy

Most first-time bankruptcies in Saskatchewan are discharged after nine months, meaning you are released from the obligation to repay the debts that were included in your bankruptcy.

Credit Rating

A bankruptcy will remain on your credit report for six years after your discharge for first-time bankrupts, or 14 years for those who have been bankrupt before.

Assets and Bankruptcy

Declaring bankruptcy does not mean you will lose everything. Certain assets are exempt from seizure under Saskatchewan law. However, non-exempt assets will be sold by the trustee to repay your creditors.

Alternatives to Bankruptcy

Bankruptcy is not the only solution for dealing with debt. Other options may be more suitable for your situation.

Consumer Proposal

A consumer proposal is a legally binding agreement negotiated with your creditors through a Licensed Insolvency Trustee. In it, you agree to pay a portion of your debts over a period of up to five years.

Informal Debt Settlement

Under an informal debt settlement, you negotiate directly with your creditors to pay back a portion of your debts over time. This option does not involve the courts or a Licensed Insolvency Trustee.

Debt Consolidation

Debt consolidation involves combining all your debts into one. This is usually done by taking out a loan to pay off your existing debts, after which you only need to make a single monthly payment.

In Conclusion

Declaring bankruptcy in Saskatchewan is a serious decision with long-term financial and legal implications. It’s crucial to seek professional advice to fully understand your options. By doing so, you can make an informed decision about whether bankruptcy is the right path for you or if a different debt solution may be more appropriate.

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