INFORMED FINANCIAL SOLUTIONS
Personal Bankruptcy
PERSONAL BANKRUPTCY IN OTTAWA, GATINEAU, MONTREAL, AND BEYOND
If your debts has become overwhelming and neither debt consolidation nor a consumer proposal applies in your case, you can claim bankruptcy under the Bankruptcy and Insolvency Act.
Personal bankruptcy is a solution that can erase your debts or financial obligations and help you start fresh. Bernier & Associates can guide you through the process of filing for personal bankruptcy in Ottawa, Gatineau or in one of our 15 offices.
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How Does Declaring Bankruptcy Work?
Bankruptcy is a legal process administered under the Bankruptcy and Insolvency Act.
More specifically, personal bankruptcy is a procedure that allows an insolvent person or the liquidator of an insolvent person (with the permission of the court) to transfer their assets to creditors in order to be released from their financial obligations when they cannot repay them.
This process discharges you from most of your debts and halts legal action from your creditors. In fact, filing for bankruptcy frees you from most or all of your unsecured debts including credit card balances, lines of credit, payday loans and tax debts. It also triggers an automatic stay of proceedings, which suspends any legal actions brought against you by your creditors such as wage garnishment.
If you’re claiming bankruptcy for the first time, you’ll typically be discharged from your debts after nine or twenty-one months (depending on your income). However, information about your bankruptcy will remain on your credit report for an additional seven years. If you file for bankruptcy a second time, it’ll appear on your credit report for 14 years.
If you need to file for personal bankruptcy in Ottawa or Gatineau, trust our licensed insolvency trustees to conduct the process.
Does Declaring Bankruptcy Erase All Debts?
Since bankruptcy only affects unsecured debts, it does not eliminate loans secured by collateral, such as a mortgage or car loan. Other types of debt excluded from bankruptcy are alimony, child support, and student loans (if you haven't left school for more than seven years).
Also, if someone has co-signed or guaranteed a loan for you, they remain responsible for repayment even if you file for bankruptcy. The personal bankruptcy process does not release guarantors from their obligations.
What Is the Role of a Licensed Insolvency Trustee During Bankruptcy?
A licensed insolvency trustee is a person who is licensed by the Office of the Superintendent of Bankruptcy to handle proposals and bankruptcies. The trustee will clearly explain each consultation step and the obligations you must meet. They will also explain the consequences of the process, including the impact on your credit score and the possible recovery measures.
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A licensed insolvency trustee is the only professional authorized to administer a bankruptcy in Canada. In addition to preparing and filing the required paperwork, a licensed insolvency trustee is responsible for ensuring the rights of both the debtor and creditors are respected throughout the bankruptcy process.
Debts, Legal Remedies and Credit Score
Legal remedies cease on the day you declare bankruptcy, except for certain criminal or civil proceedings such as matrimonial proceedings.
In addition, it is important to note that personal bankruptcy does not release you from your alimony payments or your student debts that are less than 7 years old; nor does it release the co-signer or guarantor of your loan, if applicable.
In general, information about your bankruptcy will appear on your file for a period of 7 years after your release from debt. This period will be extended to 14 years if you have previously been bankrupt.
Bankruptcy and Credit Score
Once you file for bankruptcy, the credit bureau updates your file and your credit score and assigns the lowest rating to reflect your insolvency status.
To learn more about the impact of bankruptcy on your credit score and possible solutions in such a case, please read our blog post on this topic.
Does Personal Bankruptcy Necessarily Mean the Loss of Material Assets?
Contrary to popular belief, personal bankruptcy does not always mean losing assets. At Bernier & Associates, we can help you deal with your debt problems through solutions such as personal bankruptcy or a consumer proposal. In many cases, keeping your car and your home during bankruptcy is possible.
Visit our blog to learn more about the conditions under which you may keep some of your belongings during bankruptcy.
Are You Considering Personal Bankruptcy? Call Our Trusted Advisors in Ontario and Quebec
If you struggle to pay off your debts, contact Bernier & Associates to discuss your options. One of our licensed insolvency trustees can explain your financial restructuring options and determine if personal bankruptcy is the right solution for you.
Contact us today to schedule a free consultation at one of our 15 offices in Quebec and Ontario, including Gatineau, Montreal, or Ottawa, and find out how you can take back control of your financial situation.
Your Questions About Personal Bankruptcy Answered
Will I lose my home? Will I be able to get a loan? What will the impact be on my spouse? Bernier & Associates encourages you to visit its blog to get answers from professionals to all your questions about personal bankruptcy.
