In the midst of economic crises, finding solace in bankruptcy can sometimes be a viable solution. This guide will lead you through the process of filing for bankruptcy in Ontario, from the initial consultation to the eventual discharge.
1. The Initial Consultation
The first step towards filing bankruptcy begins with the initial consultation. This session is designed to give you a clear understanding of your financial situation and the various options available to you.
1.1 Free Initial Consultation
During the initial consultation, you will be asked specific questions about your financial status. This information will help the consultant to understand your situation and provide the best possible solutions to your financial problems.
2. Signing Bankruptcy Documents
If you decide that bankruptcy is your best option, you will then proceed to sign the necessary documents.
2.1 Assignment into Bankruptcy
These documents, once signed, will be filed with the Office of the Superintendent of Bankruptcy (OSB). The OSB will then notify your creditors of your bankruptcy.
3. Notice to Creditors
Within five days of filing your documents, the OSB will send a notice to all known creditors.
3.1 Stay of Proceedings
The notice will inform your creditors that they are legally prevented from continuing any action against you concerning property matters. This protection also includes wage garnishments and annoying phone calls from debt collectors.
4. General Administration
This stage involves the management and disposition of the debtor’s property, the examination of the bankrupt by the official receiver, and the assessment of the bankrupt’s conduct.
5. First Meeting of Creditors
Though not common in summary administration bankruptcies, the first meeting of creditors may be held in certain circumstances.
5.1 Purpose of the Meeting
During this meeting, creditors have the opportunity to affirm the trustee’s appointment and provide direction on the administration of the estate.
6. Duties of the Bankrupt
In this stage, the bankrupt must comply with several duties outlined by the Bankruptcy and Insolvency Act.
7. Trustee’s Report
Eight months into the bankruptcy process, the trustee will prepare a report that summarizes the administration of the bankruptcy and provides recommendations for the bankrupt’s discharge.
8. Automatic Discharge
If this is your first bankruptcy and you do not have surplus income, you can be automatically discharged nine months after the date of bankruptcy.
9. Conditional, Suspended, and Refused Discharge
In certain circumstances, the court may order a conditional, suspended, or refused discharge.
10. Trustee Discharge
Once the administration of the bankruptcy is complete, the trustee will prepare a final statement of receipts and disbursements.
10.1 Final Statement of Receipts and Disbursements
The final statement includes information on all assets, liabilities, and the status of the individual’s discharge. It is filed with the Superintendent of Bankruptcy and sent to all proven creditors.
11. Bankruptcy Counselling
Mandatory counselling sessions are designed to help individuals understand the causes of their bankruptcy and to provide them with the necessary tools to manage their finances in the future.
11.1 First and Second Counselling Stage
During the first counselling stage, individuals will learn about money management, spending habits, and warning signs of financial difficulties. In the second stage, individuals will identify the causes of their insolvency and will be provided with resources to help them address these issues.
In conclusion, filing for bankruptcy in Ontario is a serious decision that requires careful consideration and guidance from professionals. This guide provides an overview of the steps involved in the process, but it is always advisable to seek the counsel of a Licensed Insolvency Trustee to ensure you make the best decision for your financial future.
