What is Bankruptcy?
Bankruptcy is a legal process, which will protect you from unsecured creditors. In exchange for this protection, you may need to give up some of your assets. Bankruptcy is often the best alternative for a debtor who has modest income and few assets.
How will a Bankruptcy help me?
Upon filing a bankruptcy your unsecured creditors will no longer expect payment of your debts. Any wage garnishments or other collection activities will be stopped.
I have a co-signer on a loan or credit card. What happens when I file an assignment in bankruptcy?
Bankruptcy will protect you from your unsecured creditors, however creditors will usually go after the co-signer for the full amount of the debt. Your bankruptcy will not protect any other person such as a co-signer or guarantor of any of your debts.
How long does bankruptcy last?
If this is your first bankruptcy you can expect to be bankrupt for 9 months. In some cases your bankruptcy may go for 21 months depending on your financial situation.
How will bankruptcy affect my credit rating?
A record of your bankruptcy will be on record at the various credit bureaus for approximately 7 years if this is the first time you have filed a bankruptcy.
How much does it cost to file an assignment in bankruptcy?
Every situation is different. Please contact us to discuss your unique situation and options. Remember, “It doesn’t cost anything to talk.”
What debts will not be discharged by bankruptcy?
Debts which survive bankruptcy are student loans (where it has been less than 7 years since you finished school), court fines, family support obligations, and debts which were fraudulently incurred.
What about debts owed to 407? Can they still deny my plate renewal even after bankruptcy?
On November 13th, 2015 the Supreme Court of Canada dismissed the appeal of the 407 in the matter of the 407 ETR Concession Company Limited v. Superintendent of Bankruptcy.
The Supreme Court of Canada’s decision upheld the earlier decision of the Ontario Court of Appeal which found that the discharge provisions of the BIA (The Bankruptcy and Insolvency Act) override the plate denial provisions of the Highway 407 Act.
Please click here to refer to the 407 website for all the information and instructions on what to do if you filed for bankruptcy prior to November 13th, 2015.
What is Surplus Income and how is it calculate?
Click here to find out what surplus income is, how it’s calculated and if it applies to your situation.
What about credit counsellors and debt settlement services? Can they help me?
Credit counsellors are different than debt settlement services. Debt settlement services charge a fee to help you negotiate a plan to repay your debts. Credit counsellors are often not-for-profit organizations.
Watch out for debt settlement companies that:
- say they can reduce your debt by 50% or more
- charge large, upfront fees.
- tell you that if you work with them there will be no negative effect on your credit report
- claim that their program is approved by the government
- claim they can get collection agencies to stop calling you
You should always take the time to understand your contract. Some of these companies will charge a cancellation fee if you try to end the contract before the end of the term. They may also keep the money you have paid and refuse to give you a refund.
If you don’t understand what you’re being asked to sign, get clarification before you sign, or call us for a second opinion. It doesn’t cost anything to talk.
When you’re ready to talk about your options give us a call to book a free consultation at one of our three locations in Mississauga, Brampton or Grimsby.
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