Get the Answers to the Top Canada Bankruptcy Questions

Posted by: Sandy Lyons on 01/13/2012

Going through bankruptcy can be an ordeal, as you’ll have to think about how you can reestablish the stability of your finances after being declared bankrupt and try to diminish the negative impact of filing on your financial plans. Bankruptcy can be a confusing topic, especially for the first-time filer - you’ll have to learn about the basics of bankruptcy before you can move on to its more complicated aspects. Here are some Canada bankruptcy questions you should ask your trustee:

Is filing for bankruptcy the best option for me?

Not everyone has the same financial situation and goals, as different people obviously have varying financial plans. Bankruptcy, of course, isn’t the universal answer to debilitating debt. People also have different reasons for considering a bankruptcy filing, such as the effects of a divorce, investment revenue or job income loss, and the high costs of living, which could all translate to the inability to spend less than one earns. To know if bankruptcy is right for you, take a closer look at your financial scenario and arrive at a decision with the assistance of a bankruptcy trustee who may also help you identify alternatives to bankruptcy, if available.

Will all of my assets be liquidated in a bankruptcy filing?

In a bankruptcy filing, the debtor has to turn over assets to the bankruptcy estate to be liquidated to pay for the filer’s debts. The assets that you will have to forfeit for liquidation depend on the judgment of the court, as well as the asset exemptions in your particular province or territory of residence. Fortunately, no filer loses all of his or her assets. You can find out what assets are exempt from liquidation by checking out related legislation from your own provincial bankruptcy office and talking to a bankruptcy trustee licensed to practice in your area. Generally, if the criteria set by the province is met, the filer’s primary home, car, furniture, clothing, retirement accounts, as well as medical, work, and farming equipment may be exempted from liquidation. If an asset isn’t exempted, it may be sold off in bankruptcy proceedings for creditor payment.

 Who will know I went bankrupt?

The BIA or Bankruptcy and Insolvency Act states that all consumer proposals and bankruptcies become a matter of public record once approved and filed, although there is hardly any reason to fear that other people will know about your situation. Ordinarily, only creditors, credit agencies and the like will search for your bankruptcy information in the databases of the Office of the Superintendent of Bankruptcy.

Asset exemptions, the disclosure of bankruptcy information, and determining the feasibility of bankruptcy declaration on your financial plans are just a few things you should understand before you decide to go to court – a good understanding of the basics will serve you well before you read up on the more complex aspects of bankruptcy. To learn more about bankruptcy discharges, credit ratings, and other related topics, consult with a licensed bankruptcy trustee in your province to answer your Canada bankruptcy questions.