What is the Bankruptcy Process In Ontario?
Have you reached the point where you can no longer afford to repay your debts each month?
And is your financial situation stressing you out, and that stress amplified with the deluge of debt collection letters and phone calls you reach virtually every week?
If so, you’re not alone.
You might not realize it, but many Canadians owe more than they earn each month.
According to a recent news report, the average Canadian owes around $72,950.
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There are many options available to people that find they can no longer commit to repaying their debts in full.
In Ontario, one of those options is personal bankruptcy.
This article discusses the personal bankruptcy process in Ontario.
Is personal bankruptcy a viable option for you?
The personal bankruptcy process in Ontario gives people with severe debt problems the opportunity to start with a clean slate.
It allows them to remove most, if not all, of their debt responsibilities.
Some people with high levels of debt find themselves in untenable situations, and often due to circumstances beyond their control.
For example, they might have got laid off from their jobs and have been unable to find a new one.
An accident may prevent them from working.
There are many reasons why a change of circumstances could have resulted in their current financial predicament.
The personal bankruptcy process in Ontario gives many people a financial lifeline and allows them to “start again.”
Personal bankruptcy and income
When you go through the bankruptcy process in Ontario, you are allowed to earn an income.
But, you should keep in mind that the amount you earn gets taken into account when determining how much you should pay in your bankruptcy case.
The government sets a limit on what it feels families of certain sizes can earn to have a reasonable standard of living.
Anything above the limit placed in your case gets deemed as surplus income.
If you earn above your threshold limit, the government will demand you pay 50% of that excess as surplus income payments.
The length of your personal bankruptcy process in Ontario will depend on several factors.
One of the most notable factors is whether you’ve been bankrupt previously.
If this is your first time, your bankruptcy will last either nine or 21 months.
If you’ve been bankrupt before, the length is 24 months (or 36 months if you have to make surplus income payments).
Your credit report
As you might expect, details of your bankruptcy will appear on your credit report.
Those details will typically stay on your credit report for six years after you get discharged.
But, if it’s your second bankruptcy, expect those details to remain for 14 years.
How to file for bankruptcy in Ontario
Filing for bankruptcy is a decision that you shouldn’t take lightly.
With that in mind, it makes sense to first discuss your financial situation with a qualified and experienced consumer finance expert.
Contact Bankruptcy Canada today on (877) 879-4770.
We’ll direct you to a local licensed bankruptcy trustee who can discuss your options with you.
There’s no risk or obligation, and all our services are confidential.
How to File for Bankruptcy
What is Bankruptcy?
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?