Personal bankruptcy

When should you consider personal bankruptcy?

Personal bankruptcy may be considered in the following situations:

• You have too much short-term or long-term debt that you’re unable to repay.
• You can no longer make your minimum payments.
• You’re receiving calls or collection notices from creditors or government agencies.
• You’re using a credit card to pay current invoices or repay other debts.
• You lost your job and no longer have income.

What are the steps in personal bankruptcy?

Personal bankruptcy includes the following steps:

1. Assessing the situation
   You meet with one of our advisors. Together, we’ll go over all the possible solutions. Bankruptcy is not the only option when faced with debt problems. Often, a consumer proposal, debt consolidation or voluntary deposit may be better choices.
2. Document signing
   lf bankruptcy is the best solution for you, you must sign certain documents to set the procedure in motion.
3. Official bankruptcy filing
   Our Licensed Insolvency Trustee (LIT) submits your file to the Office of the Superintendent of Bankruptcy. Harassment from your creditors will end immediately after this step. You can finally relax!
4. Follow-up meetings
   You’ll have two follow-up meetings to help you maintain a healthy financial situation and avoid any future difficulties. You’ll learn how to create a budget and benefit from personalized advice to help you maintain your financial recovery in the long term.
5. Discharge from your debt
   As early as nine months (if this is your first bankruptcy) or 21 months (if your income exceeds a specific threshold), you’ll be discharged from your debts. You can begin to plan again and look to the future with optimism.

What are the advantages of personal bankruptcy?

Personal bankruptcy has several advantages:

• It quickly releases you from your debts (between 9 and 21 months based on your income and the type of bankruptcy filed). The process is faster than debt consolidation or a consumer proposal which can take up to 5 years.
• You’ll no longer be harassed by your creditors and you’ll be protected from lawsuits and wage garnishments.
• Contrary to many myths, you can keep some of your assets such as furniture, RRSPs, pension funds and work tools.
• In many cases, you can keep your home and car.
• It protects you from having your services (telephone, electricity, gas, etc.) cut off.
• You’ll regain control of your financial situation.

What are the disadvantages of personal bankruptcy?

You should bear in mind that there are certain drawbacks.

• You might be required to sell certain assets or, if you’d prefer to retain the assets, make monthly payments to the LIT that correspond to their value.
• For six to seven years, your credit file will show that you declared bankruptcy. During this period, you’ll find it harder to secure credit. However, by adopting healthy habits over time, you can improve your credit score.

Declaring bankruptcy is a difficult decision, but it may be the best solution for you.

How can a Licensed Insolvency Trustee help you deal with bankruptcy?

Only Licensed Insolvency Trustees such as those at Raymond Chabot are authorized to file for bankruptcy. Therefore, it’s best to contact them directly. During your first free consultation, all your options will be evaluated.

As of your first meeting, the Licensed Insolvency Trustee will take care of everything and ensure a smooth and legally compliant process. They’ll become the sole point of contact with your creditors. Furthermore, they’ll share advice at each step to help you start over and avoid falling into debt again.