General Information about Bankruptcy

Before the decision is made to go bankrupt, a consultation is held with the trustee. The consultation is usually held in person, but is occasionally held over the telephone. At this meeting, the debtor can discuss the reasons for his financial difficulty with the trustee and determine if bankruptcy is the right course of action. The trustee will also explain what the consequences of bankruptcy are, and any alternative courses of action that may be appropriate.
There is no charge for the initial consultation.

  1. Major Steps in the Bankruptcy Process
  2. Duties of the Bankrupt
  3. The Cost of Bankruptcy
  4. Creditor Information (including Proof of Claim form)
  5. Read comments from people who have gone through bankruptcy

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The Major Steps in the Bankruptcy Process

If the debtor decides to declare bankruptcy the major steps are:

  1. The first step is to complete an application form and a budget sheet. The forms can be printed from this website. The forms can be sent to us by fax, e-mail (the forms must first be scanned) or regular mail. Once an application form is received, the estate administrator will set up a file and call the applicant to arrange an appointment to sign the bankruptcy documents.
  2. The debtor signs an Assignment in Bankruptcy declaring that the trustee is now in charge of his financial affairs.
  3. The debtor signs other bankruptcy documents, including consent forms.
  4. During the course of the bankruptcy, the bankrupt must attend two counselling sessions with the trustee. (One takes place approximately 3 weeks after bankruptcy, and the other takes place approximately 6 months after bankruptcy.)
  5. During the course of the bankruptcy, the trustee liquidates any assets of the bankrupt (excuding exempt assets), and the proceeds are eventually distributed among the creditors.
  6. The trustee prepares any outstanding tax returns up to and including the year of bankruptcy.
  7. The Official Receiver may request an examination and the bankrupt must attend. The trustee will explain this in more detail.
  8. If there is no opposition, the first-time bankrupt is normally discharged 9 months from the date of bankruptcy. The period of bankruptcy may be longer for repeat bankrupts and bankrupts with income over a given level.

Please note that the above is a brief outline only and there may be several variations of the above steps. Each individual's situation must be discussed with the trustee.

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Duties of the Bankrupt

The Bankruptcy and Insolvency Act requires that bankrupt individual perform certain duties including:

  1. Turn over all property to the trustee, excluding exempt property.
  2. Hand over all credit cards to the trustee.
  3. Deliver to the trustee all required documents including real estate title papers, insurance policies and details of any assets and liabilities.
  4. Provide the trustee with monthly statements of income and expenses from the date of bankruptcy until the date of discharge.
  5. Provide the trustee with all required income tax information.
  6. Disclose all assets and liabilities, as well as other required personal information, such as address, marital status, and household income and expenses. The trustee and estate administrator will discuss all the details with the individual.
  7. Keep the trustee informed of contact information including address and telephone number.

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The Cost of Bankruptcy

The cost of bankruptcy is determined by several factors including:

Generally, for first-time bankrupts with income below the legislated standard, the payment is $200 per month for 9 months for a total of $1,800 (including HST). For previous bankrupts with income below the legislated standard, the payment is $170 per month for 12 months, for a total of $2,040 (including HST). Note that this is a guideline only; individual circumstances may vary. The trustee will address each individual's specific situation. Currently the legislated standard is given in the following table:

Number in Family: 1 2 3 4 5 6 7+
Standard net monthly income: 2006 2497 3070 3728 4228 4768 5309

If the income is above the superintendent's standard, the bankrupt must pay a portion of this surplus into the bankruptcy estate. The trustee will provide all details of the required payments. To estimate the cost of bankruptcy for your situation, try our Surplus Income and Payments Calculator.

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Creditor Information

The trustee will notify all of a bankrupt's creditors that an assignment in bankruptcy has been filed. The notice will include a photocopy of the sworn statement of affairs, information about the family income and living expenses, and the amount the bankrupt has agreed to pay into the bankruptcy estate (see also the section entitled "The Cost of Bankruptcy").
Included with the notice is a proof of claim form. This form is used by creditors to specify the amount owed by the bankrupt at the date of bankruptcy. A fillable copy of this form may be obtained using the link below. The form can be filled in (the fillable fields are blue) or printed as is and filled in by hand. Note that page 3 of the form contains detailed instructions about how to complete the form.

Fill in and Print a Proof of Claim Form

Occasionally, the creditors will request a meeting with the bankrupt. This meeting may be requested by the Official Receiver, or by creditors having in aggregate at least 25% of the proven claims. The bankrupt must attend the meeting. The meeting must be held within 21 days of being called.

Creditors have the right to oppose the bankrupt's discharge. If this happens, the trustee will notify the bankrupt in writing of the court hearing before the Registrar in Bankruptcy. The bankrupt must attend this hearing in person, and may be accompanied by a lawyer if he wishes. Please ask the trustee for more details about this process.

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