Common Questions

What about my credit rating?

• Once your level of debt becomes so great that bankruptcy is required, your credit rating is destroyed. Your ability to obtain and use credit after discharge depends on convincing lenders of your personal financial maturity
• Once you are discharged from bankruptcy, send a copy of the Discharge Order to the Credit Bureau so that your credit record can be updated
• All documents relating to your bankruptcy should be saved for reference for future lenders

• No - only assets owned by the bankrupt are included in the bankruptcy
• If assets are jointly owned with a spouse, then the bankrupt's portion may have to be sold and distributed to the creditors
• It is important to make the Trustee aware of joint assets so that each case can be reviewed individually

• Generally, you do not require a lawyer to go bankrupt. If you feel the need for legal advice and cannot afford a lawyer, legal aid is available

• All legal actions halt when the assignment into bankruptcy is filed. If you receive any writs, garnishments or other legal documents after the date of bankruptcy, contact the Trustee immediately.

• All assets acquired prior to your discharge should be used to pay creditors through your Trustee. Lottery winnings and inheritances are considered assets even if they are acquired after filing the assignment in bankruptcy

• Yes, however if you are indebted to the same bank, it may be prudent to move your account elsewhere

• Under Section 199 of Bankruptcy and Insolvency Act, an undischarged bankrupt should not use credit.
• You must deliver all of your credit cards to the Trustee upon filing an assignment in bankruptcy

• Bankruptcy does not stop the liability of anyone who guaranteed or co-signed a loan on your behalf
• Even your spouse may be accountable for liabilities incurred jointly with you
• It is important to make the Trustee aware of joint liabilities so that each case can be reviewed separately

• The bankruptcy process offers a chance to rehabilitate yourself and to relieve the pressure from creditors
• Any telephone calls received from creditors after bankruptcy should be referred to the Trustee
• If the calls are distressing, threatening or verbally abusive, make note of the person calling, the name of the company they represent and the details of the conversation
• Harassment is against the law

Consumer Proposals

The major steps in a consumer proposal are

• Review your financial situation and receive counselling with a Trustee or Administrator - counselling ensures that a consumer proposal is the right course of action
• The consumer proposal is prepared by the Trustee or Administrator and is filed with Official Receiver
• Attend a meeting of creditors, if requested by the Official Receiver or at least 25% in dollar amount of your creditors
• The proposal will receive automatic Court approval unless the Official Receiver, any creditor, or other interested party objects
• Make payments to the Trustee or Administrator, who distributes funds to the creditors
• If the proposal is not accepted, or if you default on the proposal, there is no automatic bankruptcy, but all creditors are then allowed to take action against you again.

• Is a Trustee or other individual designated by the Superintendent of Bankruptcy to administer consumer proposals and provide counselling

• All unsecured creditors are prevented from collecting debts until the proposal is withdrawn, refused or annulled
• No creditor or landlord can terminate an agreement just because a consumer proposal is filed
• An accepted proposal is binding on all unsecured creditors and any secured creditors who filed a proof of claim
• A consumer proposal does not release debts covered in Section 178 of the Bankruptcy and Insolvency Act

• An employer cannot fire, discipline or suspend you solely because you filed a consumer proposal
• Once a proposal is filed, all wages assignments and garnishments are stopped