Understanding Bankruptcy in British Columbia
The concept of bankruptcy isn’t foreign in BC, a province known for its wealth. With the average income higher than the national average, BC residents seem to be clearing their debt faster than the rest of Canada. However, the average non-mortgage debt in the west, especially Vancouver, is rising and this trend is reflected in the average non-mortgage debt amount of $57,451 in BC in the second quarter of 2022. Despite this, bankruptcy rates have dropped across the province between 2021 and 2022, appearing lower compared to Ontario and Alberta.
Grasping the Fundamentals of BC Bankruptcy
Bankruptcy in Canada is designed to aid individuals who can’t reasonably pay off their unsecured debts such as credit cards and installment loans. The Bankruptcy and Insolvency Act of 1985, periodically revised and updated, governs bankruptcy in BC and the rest of the country. According to this law, individuals owing a minimum of $1,000 to their creditors are eligible to file for bankruptcy. However, BC residents filing for bankruptcy usually owe much more, with the average liabilities standing at $152,340.
Bankruptcy in BC is filed through a licensed bankruptcy trustee, who administers your personal property via a trust to settle debts with creditors. The trustee’s role is to ensure that your creditors receive as much payment as possible. This means that while bankruptcy erases your debts, you often have to surrender some property. The proceeds from the sale of your property are distributed to your creditors, and sometimes even the property itself is handed over. However, when filing for bankruptcy in BC, there are property exemptions that allow you to keep some of your property. The bankruptcy process typically lasts no more than nine months. If you abide by the bankruptcy agreement during that period, your trustee will recommend a discharge that erases your unsecured debts.
Bankruptcy & Insolvency Statistics in BC
Despite the benefits of bankruptcy in BC, such as financial counselling and debt relief, there are downsides. BC residents see their credit suffer for seven years (and in some cases up to 14) after a bankruptcy is discharged, making it difficult to get new loans and the most affordable rent, mortgage, and interest charges. A bankruptcy will also force you to surrender a great deal of your property.
Understanding Bankruptcy in Greater Detail
Declaring personal bankruptcy in BC is the last resort, and you should learn about the other options available to you before applying. Speak to a professional on a free confidential call for some useful information on debt management and declaring bankruptcy, or fill out a form for more information on debt solutions and your options.
Consumer Insolvency Rates in BC
Annual consumer insolvency rates in BC are marked per 1,000 Population Aged 18 Years and Older. Data from 2012 to 2021 shows a fluctuation in insolvency and bankruptcy rates across different regions of BC.
Bankruptcy in BC can leave your finances and credit in shambles. Learn about your options and the possibilities of avoiding bankruptcy for something less damaging.
What Does Bankruptcy Imply?
Bankruptcy is a legal debt remedy available to resolve your debts and achieve a financial fresh start. It enables you to eliminate virtually all debts working closely with a Licensed Insolvency Trustee. The option and decision to file for personal bankruptcy is yours – no creditor or other party can prevent you from seeking the protection of Canadian personal bankruptcy legislation if you are struggling to repay your debts.
To file for personal bankruptcy in Canada, you will need to work with a Licensed Insolvency Trustee (“LIT”) – formerly known as a Trustee in Bankruptcy or Bankruptcy Trustee. LITs are the only debt help professionals designated and authorized to administer the bankruptcy process. You do not need to hire a bankruptcy lawyer to file personal bankruptcy in British Columbia.
Advantages of Filing Personal Bankruptcy
Filing personal bankruptcy offers various advantages, including forgiveness for nearly all types of debts, protection of assets and income, a clear “debt-free date”, and financial counselling. It stops the debt-stress from never-ending balances owing, overwhelming payments or collection actions.
Comparing Debt Help Services
There are various debt help services you can compare to choose the best one for your needs. These include Consumer Proposal vs Credit Counselling, Bankruptcy vs Consumer Proposal, and Bankruptcy vs Credit Counselling.
How to Declare Bankruptcy in Canada
Most bankruptcies in Canada are considered “voluntary”, which means that the individual who is in debt seeks out and commences the bankruptcy process to deal with their debt. The first step in declaring bankruptcy in BC (or anywhere in Canada) is to find a Licensed Insolvency Trustee in your province.
Filing for Bankruptcy in BC: A Step-by-Step Guide
Filing for bankruptcy in BC involves several steps. First, you connect with a qualified representative for a free consultation. Then, complete an application form and sign the official personal bankruptcy documents. After this, work through the bankruptcy process and fulfill your personal bankruptcy duties. Upon completion of your bankruptcy duties, you will receive an official Certificate of Discharge showing that you have completed the requirements to successfully “exit” from personal bankruptcy.
Eligibility for Bankruptcy
Bankruptcy “eligibility” in Canada is simple: You must owe $1,000 or more and be “insolvent”, meaning that you are unable to pay your debts as they generally become due. A BC Licensed Insolvency Trustee will be able to help you assess your situation, consider and evaluate all your options, and help you decide which makes the most sense to get back on track.
Impact on Credit After Bankruptcy
Personal bankruptcy will be noted on your credit history report for six years following the date of your discharge. However, despite this notation, you can begin building your credit up and apply for credit at any point. It is quite common to be granted credit such as a new mortgage or vehicle financing within two-to-three years of exiting bankruptcy, and as little as one year after bankruptcy it is often possible to obtain a standard credit card at “best rates”.
Real Stories of Declaring Bankruptcy in BC
There are real stories of people who have declared bankruptcy in BC, and these stories shed light on the process and its effects. It’s essential to remember that every person’s situation is unique, and what works for one person may not work for another. If you’re considering filing for bankruptcy, it’s crucial to seek professional advice and weigh all your options before making a decision.
