10 Steps To Filing Bankruptcy in Ontario
What are the steps to filing bankruptcy in Ontario?
It is a question you might be asking if you are really struggling to offset debts from creditors.
To answer this, we will tell you the steps you need to take to find out if it is a sound move for you and how you can file bankruptcy in Ontario the right way.
Bankruptcy in Ontario Explained
Bankruptcy is a legal term used to refer to a situation when a person or a business is in a situation where they aren’t able to repay unresolved debts.
Filing for bankruptcy in Ontario isn’t a bad thing though.
It is actually supposed to give you a fresh start.
Think of it this way, you are drowning in debt and the bankruptcy discharge comes in to relieve you of the debts subject to some reasonable conditions.
It isn’t a perfect solution but filing bankruptcy will certainly help lift some financial strain off your shoulder.
Let’s take a look at the steps you will take to file for bankruptcy in Ontario.
Steps to Filing Bankruptcy in Ontario.
Accept The Debt Situation
The first step towards filing for bankruptcy is to accept that you need help.
You know that you need a hand when you are in that point where you are struggling with debt and collection agencies are on your neck.
It gets even worse if the creditors have moved to court to sue and got a money judgement against you.
Your wages may even be garnished or there is a possibility that it will soon be the case.
This is probably the right time to think about filing bankruptcy in Ontario.
Get A Debt Assessment From a Licensed Bankruptcy Trustee
The next step is to meet the ‘referee’ otherwise known as the Bankruptcy trustee.
This is a professional licensed by the government of Ontario and listed in the Superintendent of Bankruptcy database.
It is important to ensure you only work with a licensed Bankruptcy trustee in Ontario keeping in mind that this is a legal process.
The Bankruptcy trustee will help assess your situation by asking you questions pertaining to things like your assets, debts, income, and expenses among others.
The trustee will then give you the right advice on the relief options you can take in case filing bankruptcy isn’t the right option.
Gather Information for Claiming Bankruptcy in Ontario
If the licensed Bankruptcy trustee has established that filing for bankruptcy is the best way to go, you will then need to gather the information needed to move forward with the claim.
The trustee will request you to collect information related to debts you owe, your assets, income, etc.
Let the Trustee Handle the Bankruptcy Paperwork
After you have gathered all the information required, the ball is back in the licensed trustee’s court.
He or she will help prepare the required paperwork stipulated under the Bankruptcy and Insolvency Act.
Review Your Bankruptcy Information with the Trustee
The trustee will ask to meet you again in a process needed to verify that all the information you provided is accurate and perhaps add more if need be.
Once you and the trustee have verified that everything is Ok, you can sign the bankruptcy documents.
Filing the Bankruptcy Application
The bankruptcy trustee will commence the official process of filing bankruptcy by submitting your documents to the Office of the Superintendent of Bankruptcy of Ontario.
The trustee will also contact your creditors with the bankruptcy documents via mail, fax, e-mail, etc.
Undertake Duties Required During Bankruptcy
After the application for bankruptcy has been filed, the trustee is now in charge of legal obligations meaning that you will stop making payments directly to your creditors.
Moreover, any legal action against you will stop but you will still be required to undertake certain duties like paying the trustee each month to foot the costs of your bankruptcy, attending a meeting of creditors if called upon to, attending two counselling meetings to help you get back up on your feet financially etc.
Making Surplus Income Payments
In case you have sufficient income, you may also have to make payments towards your debt otherwise known as surplus income payments.
Eventually, your debts will be discharged (wiped out) thus relieving you from the obligation of paying most of the debts you had when filing for bankruptcy.
Some debts will however not be discharged including alimony & child support, court ordered fines and penalties, debts related to fraud and in some cases, student loans.
Repair Your Credit
Filing for bankruptcy will tend to affect your credit rating for years but it isn’t the end of the world.
You will start rebuilding your credit score and get back on your feet again!
Final Remarks on the Steps in a Bankruptcy Filing
That’s pretty much all the steps to file Bankruptcy in Ontario.
The good thing about bankruptcy in Ontario is that the laws have been written in a way that you can avoid using lawyers and the court process especially in the case of filing personal bankruptcy.
That said, keep in mind that filing bankruptcy in Ontario is a legal process.
It should be handled by a Trustee in Bankruptcy, licensed by the government.
If you are struggling with debt and thinking of filing bankruptcy then don’t hesitate to get in touch with one of one of our Local Bankruptcy Ontario Trustees near you to learn more about the steps to filing bankruptcy.