While some people are forced into bankruptcy, the vast majority choose to “declare bankruptcy”. The correct term for “declaring bankruptcy” is “making an assignment in Bankruptcy”. It’s called making an “assignment” because you assign most of what you own and owe to your estate.
After assigning all of your debt to your bankrupt estate, you leave your debt behind and get a fresh start. Your Trustee in Bankruptcy’s job is to administer your bankrupt estate. This involves tasks such as notifying your creditors of your bankruptcy, writing reports to the Office of the Superintendent of Bankruptcy, which is a division of Industry Canada, and assisting you to obtain your discharge which permanently separates you from your estate and your debt.
You assign all of your assets that aren’t exempt. The most common exempt assets are as follows:
- One Automobile
- Furniture & Appliances
- Tools of the trade
All of your debts are discharged or erased except debts for:
- Child support
- Amounts due to fraud
- Any debt resulting from false pretences or misrepresentation
- Student debt where the student ceased to studies within 7 years of the time of bankruptcy (read more here)
- Fines, penalties, or restitution orders imposed by a court in respect of an offence or any debt arising out of a recognizance or bail
- Awards by a civic court in respect of bodily harm intentionally inflicted
- Interest on any of the debts mentioned above
The process can be as short as 9 months. If you’re wondering “What is Bankruptcy?”, refer to our service page here for more information or give us a call. We’re always happy to hear from you and provide free no-obligation consultations where we’ll explain your options to you so that you can make an informed decision. Give us a call. You’ve got nothing to lose except your debt!