Bankruptcy

What is the difference between credit counselling and bankruptcy?  Credit Counselling is an alternative to filing for bankruptcy. Bankruptcy is a legal process handled by a bankruptcy Trustee and your credit rating remains at its lowest for 7 years. Credit counselling is a not-for profit voluntary program, and depending on the length of repayment time (usually four years), your record is clear two years from successful repayment date.

Questions to ask a Bankruptcy Trustee

  
How does declaring bankruptcy affect me?
 

What could I lose if I go bankrupt?

• Money
• Cars
• Tools  
• Furniture   
• House
• Anything else?

What do I do if I go bankrupt?

• What happens to my credit rating?
• How does bankruptcy work and who decides if I should go bankrupt?
• Can my spouse/partner’s debts be included?
• Can my wages or bank accounts be garnished?
• What will I have to do if I go bankrupt?

I’ve heard I will have to attend counselling sessions:

• Do I have to go?
• How long are they?  
• Who will give them and how will they be presented?  (group workshops, individual sessions, booklet, video, other?) 
• What are they about, how will they help me?

Who do I contact if I have questions?

What hours are services available?

How much will there have to be in my estate before my bankruptcy is over?

How long will I be in bankruptcy?

Is there a cost and if so how much is it?

• Does the cost include:  Court fees, GST, Counselling sessions, Trustee fees, anything else?
• Who gets paid first, the trustee or the creditors?
• How will I pay for it?
• What can I do if I don’t have this much money?

What other options do I have?

• Debt Management Program
• Consumer Proposals

Choosing to resolve your debt situation through bankruptcy is an important decision.  Before you decide, be sure you understand:

• How declaring bankruptcy affects you
• What it will cost & how it works
• What other options may be available to you