Understanding the Process of Filing for Bankruptcy
We know that filing for bankruptcy can be a scary process for some, but it doesn’t have to be.
The process is actually quite straightforward and is a positive step towards a life free of debt.
They will also discuss bankruptcy alternatives with you before deciding on the best course of action.
If bankruptcy is the right option for you, they will give you the peace of mind and guidance you need as you go through the bankruptcy process and end the cycle of debt that you are in.
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Understanding The Process Of Filing For Bankruptcy
In this section, we will guide you through the various stages you will go through when filing for bankruptcy.
#1: Arrange for a free and confidential consultation
The onus is on you to make that first call to us.
When you do, we will put you in touch with a Licensed Insolvency Trustee.
They will get to know you and your financial situation and will outline the various debt relief solutions that are open to you.
These include credit counselling, debt consolidation, Consumer Proposals, and bankruptcy.
During the consultation, you will be asked a series of questions that pertain to your debts.
Answer them honestly, as your trustee will then have a better understanding of the debt solutions that should be considered.
They will want to know more about your current income and expenditure, for example, as well as details of your debts, creditors, and assets.
Your trustee will let you know what assets are exempt during the bankruptcy process, will discuss with you the surplus income payments that may be required, and will answer any questions you might have about the process.
If it is agreed that bankruptcy is the right option for you, your trustee will go through the process with you in more detail and will make sure you understand the implications of bankruptcy before moving to the next stage.
#2: Legally File For Bankruptcy
A number of forms will need to be prepared when filing for bankruptcy.
This will include the Bankruptcy Assignment, which is your declaration that you are happy to hand over your assets to the trustee for the benefit of your creditors.
Another is the Statement of Affairs, which documents your liabilities, assets, income and expenses, and other details pertaining to your case.
When these documents have been filed with the Official Receiver, a Stay of Proceedings comes into effect and you are legally declared bankrupt.
At this point, your creditors can no longer harass you, and you stop making payments to them.
#3: Fulfil Your Bankruptcy Duties
During the timeframe of your bankruptcy (between 9 and 21 months), you will be required to fulfil a number of duties.
File monthly income and expense reports with your trustee. These will help you to track your expenses and develop a budget, and they will be monitored by your trustee to determine whether you have any surplus income.
Attend two counselling sessions. These are your opportunities to go into further depth with your trustee about your financial situation.
The causes of your financial difficulties will be discussed, as will the steps that are needed to repair your credit rating, manage your finances, and avoid future debt.
The first counselling session will be within the first two months after filing for bankruptcy, and the second will be within seven months.
Provide tax return details. Your trustee will ask for the information that is needed to complete your tax returns at the end of the tax year.
Such information will relate to the year of your bankruptcy filing, and if appropriate, previous years too.
Make payments to your trustee. These may include surplus income payments, payments to repurchase an asset, and administration costs.
#4: Meeting Of Creditors/Examination With Official Receiver
In the majority of cases, a meeting of creditors isn’t required.
However, if a meeting is required, you will be instructed to attend, and your trustee will go through what the meeting entails with you.
We go into details of the meeting here.
If you don’t owe significant debts, and if your situation isn’t complicated, the meeting is unlikely, but your trustee will support you if one is called.
As well as this meeting, you might also be asked to appear before the Official Receiver to discuss your debt situation.
Again, such a meeting is unlikely, but your trustee will let you know the questions you are likely to be asked and will prepare you for the meeting if you are required to attend.
#5: Discharge From Bankruptcy
A first-time bankrupt is normally discharged from bankruptcy at the 9-month mark unless there are still steps that need to be completed, or if there are any objections.
If your surplus income is more than $200 a month, your bankruptcy will usually be extended to 21 months.
Your trustee will go into more detail with regards to your situation with you.
#6: A Fresh Start
After your discharge from bankruptcy, you will be able to start with a clean slate.
Using the guidance given to you during your counselling sessions, you should be able to avoid any future debt situations.
Your credit rating will improve within a year or two, and you will be able to live a life that is free of the debts you had when you first started the bankruptcy process.
The sooner you get in touch with us, the sooner the bankruptcy process can begin if that is the right option for you.
Call us today at (877) 879-4770 or complete this consultation form, and start your journey towards a life that is free of debt.
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