How to File for Bankruptcy

Bankruptcy in Canada essentially calls for you to assign or surrender everything you own to a trustee in bankruptcy. Personal bankruptcy is a legal process, governed by federal law, specifically the Bankruptcy & Insolvency Act. To go into bankruptcy in Canada, a person must live or do business in Canada, and must be insolvent. The legal definition of “insolvent” in Canada is someone who owes over $1,000 and is no longer able to meet his maturing financial obligations.

Filing for bankruptcy

There are two ways to file for bankruptcy. The first is doing so voluntarily, otherwise known as making an assignment in bankruptcy. The second way, which is rarely used, is when creditors ask the Court to make an Order of bankruptcy against the individual. Once you decide on filing for bankruptcy, you must notify a bankruptcy trustee who will review your situation and administer the bankruptcy.

Bankruptcy trustees can also help you plan what to do during your bankruptcy. They are federally licensed and their fees are regulated and moderate, so you will not be burdened any further with unreasonable payments to them. Because bankruptcy is a legal process, there is a “stay of proceedings” that prevents a garnishment or any legal action from happening, and stops your creditors from calling.

The minimum set time for bankruptcy is nine months, after which your case will be reviewed and hopefully you will be given a discharge. The chances for this are high if you have never been bankrupt before and you complete various duties and responsibilities.