Bankruptcy is a process that appears to be convoluted, looked down upon, and tedious. However, with the right plan and consultants, you can sort the entire process out within 9 months. And in this guide, we’ll help Winnipeg residents get the assistance they need to get their financial stability back on track.
How Can I Prepare for Bankruptcy?
Discussing with financial advisors your overall financial picture can do wonders for realizing your options. But, when the process is first getting started, many make mistakes that are completely avoidable.
There are a few guidelines you must follow months before you file for bankruptcy. Failing to follow the instructions can reduce your efforts.
Be truthful: When filing for bankruptcy, you’re required to provide all of your financial information. Being unable to do so is considered fraud, and you might receive criminal charges for doing so.
Don’t Use Retirement Funds: You are allowed to keep your accounts and retirement funds, so you should keep them safe when filing and don’t use the funds to pay off debt.
Use Common Sense: Don’t file for bankruptcy when you’re about to receive money such as a gift, inheritance, etc. We suggest you use this money to help you pay down your debts. On the other hand, if you’re not in a bankruptcy process, a court representative can seize the money to offset some of your debt.
No Unusual Transactions: Don’t stray away from the routine. You don’t have to transfer homes or car titles. Don’t remove your name from a business or transfer it. These can all be classified under fraud.
Don’t think that you can get away from being dishonest when filing for bankruptcy. Speak to your resource lawyer to find out what options are legally available.
How Long Does Bankruptcy Last in Canada?
Most bankruptcies in Canada have a discharge period of 9 months. If the bankruptcy court orders for your bankruptcy to be extended, then your bankruptcy period can last longer than the standard nine months.
Here are some factors that might prolong your bankruptcy:
Do You Have Any Surplus Income?
If your income is higher than one that’s set by the government’s limits, then it’s possible that your bankruptcy period can extend beyond the nine-month period.
Did You Complete All of Your Duties Once Bankrupt?
If you have failed to complete your duties once you’re bankrupt, then the discharge can be delayed. The delay will depend on how soon you can complete your missing bankrupt duties and the severity of the failure.
Is the Discharge Opposed?
The discharge will be granted once you have enough income to support yourself and the dependents that are provided for, and if you’ve currently received debt counseling.
Occasionally, the creditors, the Superintendent of Bankruptcy, or the trustee can oppose a bankrupt discharge. Once this occurs, the case goes to meditation or is heard by a Judge or a Registrar.
What Must I Do Once I’m Declared Bankrupt?
- Creditors Meeting: You have to attend one of your creditor’s meetings, if there is one available. During the meeting, the creditors have the right to ask you questions based on your bankruptcy. But, in most scenarios where personal bankruptcy is involved, there is no creditors meeting involved.
- Credit Counseling: You have to take two credit counseling sessions in order to be discharged within nine months. The counseling can be one-by-one, with the trustee and yourself. Or it can be via a group bankruptees and a trustee.
- Monthly Reports: Each month, you have to report your living expenses, changes to your living situation, and household income. Your trustee will give you the form so you can provide them this information.
- Income Tax: You have to give your trustee your T-4 slips and additional information needed to complete any tax returns during your date of bankruptcy. When filing for bankruptcy, the day that’s filed is treated as the end of the tax year. So when you have to file for bankruptcy you have to write down two different tax returns.
- Other duties: You have to tell your trustee your place of residence. And you have to respond to your trustee’s request, and provide them as much information as required to assist your current bankrupt state.
Overall, you can get discharged from bankruptcy if you follow the procedure correctly. Stay proactive on your payments and seek professional assistance if you’re stuck. By taking care of your financial health, you’ll be able to recover from bankruptcy and get your finances back to normal.
This article is legal advice. If you are considering bankruptcy please contact a lawyer who specializes in it.