ANSWERS TO YOUR QUESTIONS ABOUT BANKRUPTCY AND DEBT

The minimum amount of debt required for a person to become bankrupt has been set by the Act at $1,000.00. However, it goes without saying that a person with only $1,000.00 in debt should not go into bankruptcy. In addition to this minimum debt, there is the fact that the person is insolvent, i.e. unable to meet the payments of his debts as they come due, or that the total of his debts is greater than the value of his property.

Creditors have no recourse against a debtor or his property from the date of bankruptcy. It should be noted that there are certain exceptions such as the collection of maintenance payments and fines.

You may want to consider filing a consumer proposal. As long as payments to secured creditors (mortgagee) are up to date, you will be able to keep your building and/or car. This way, you avoid bankruptcy.

Your spouse's bankruptcy does not necessarily mean your bankruptcy. Liability arises from the joint and several endorsement or liability of the obligation. The trustee will analyze with you if you are responsible for one or more of your spouse's debts. If you are found to be liable then creditors may demand payment from you.

The cost of your personal bankruptcy depends on your income and the value of your attachable assets. An excess income will be calculated according to the parameters defined by law and taking into account your incompressible expenses. This excess income is used to calculate the monthly payments you will have to make to balance your debts.

When you are declared in personal bankruptcy, you are discharged from certain debts under the conditions defined by the Bankruptcy and Insolvency Act. Your creditors stop claiming payments and any seizure procedures on your income or account are interrupted. Some of your belongings are protected from seizure, such as your clothing, the furniture in your main home, your animals or the professional equipment you need to practice your profession.

A personal bankruptcy covers your unsecured debts, i.e. those resulting from a loan taken out without designating a property as collateral, unlike residential mortgages, for example, for which your home is used as collateral.

Unsecured debts involved in the personal bankruptcy process may be, for example:

• Debts from credit card payments

• Unpaid rents

• Unpaid invoices

• Consumer credit