Declaring personal bankruptcy in Nova Scotia can be a complex process. This guide provides a step-by-step approach to help you understand how to navigate this legal procedure effectively.
Understanding Bankruptcy
Bankruptcy is a federally regulated legal process that provides relief to individuals struggling with overwhelming debt. It offers a fresh financial start by eliminating most, if not all, of your debts.
Note: The decision to file for bankruptcy should not be taken lightly. It’s advisable to consult a Licensed Insolvency Trustee (LIT) to understand all possible debt relief options.
- Halts collection calls from creditors.
- Stops garnishment and other legal actions.
- Wipes out your debts.
Meeting a Trustee
The first step in declaring bankruptcy is to meet a Licensed Insolvency Trustee (LIT). These professionals are federally regulated and are the only ones permitted to administer the bankruptcy process. During the initial consultation, which is typically free, the trustee will review your financial situation and discuss all your debt relief options.
Debt Relief Options Your trustee may recommend various solutions, including:
- Budget restructuring.
- Asset liquidation.
- Debt consolidation.
- Filing a consumer proposal or bankruptcy.
If you decide to proceed with bankruptcy, the trustee will guide you through the process.
Filing For Bankruptcy
If you choose to file for bankruptcy, the trustee will handle all aspects of your case. You’ll need to provide certain information, which the trustee will discuss with you. This includes signing legal documents, known as an Assignment in Bankruptcy, which will be filed with the Office of the Superintendent of Bankruptcy.
Upon filing these documents, your bankruptcy begins immediately. The trustee will then inform your creditors, who are then responsible for proving their claim against you.
Duties During Bankruptcy
During bankruptcy, you are required to fulfill certain duties in accordance with the Bankruptcy and Insolvency Act. These include:
- Submitting monthly income and expense statements along with proof of income
- Attending two credit counselling sessions
- Making the required contribution to your creditors
- Providing income tax information for any prior and current year
- Surrendering non-exempt assets or buying them back
Failing to meet these duties can impact the length of your bankruptcy and your discharge.
Bankruptcy Discharge
Discharge from bankruptcy is the final step in the process. This is when you are released from the obligation to repay the debts included in your bankruptcy. The timing of your discharge depends on several factors, including whether it’s your first bankruptcy and whether you’re required to make surplus income payments.
It’s crucial to understand that some debts, such as spousal or child support and certain types of student loans, cannot be discharged through bankruptcy.
Wrapping Up
Declaring bankruptcy is a significant decision with long-term financial implications. It’s essential to consult a Licensed Insolvency Trustee to understand all your options. You can contact us for a free consultation.
