What is Bankruptcy?
Bankruptcy is a last alternative to solve debt
problems for honest debtors in unfortunate circumstances. It is
a legal process that releases you from most of your debts and
provides you with a fresh financial start.
Can I file for bankruptcy?
As long as you owe more than
$1000 and are not able to pay your debts as they become due, you
are eligible to file an Assignment in bankruptcy
What assets can I keep if I file Bankruptcy?
Each province has a different set of
exemptions that determine what assets you are permitted to
keep. In Alberta, you may keep the following items, as long as
you have not pledged them as collateral on a loan.
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Food
required by you and your dependents during the next 12
months |
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Clothing
up to a $4,000 |
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Household
furniture and appliances up to
$4,000 |
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Equity in a
motor vehicle up to $5,000 |
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Medical &
Dental aids |
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Equity in your
principal residence up to a value of $40,000 |
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Property required
to earn income (Tools of trade) up to a value of
$10,000 |
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Cash surrender
value of live insurance policies where the
beneficiary named is the spouse, child, parent or grandchild |
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Pension plans,
where they are locked-in until retirement |
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Any other assets in your possession at the
Date of Bankruptcy that do not fit into the above categories
"vest" in the trustee, which means that they must be disposed of
and the proceeds paid to the trustee. The monies are then
disbursed to your creditors.
What Debts are not released by Bankruptcy?
There are a few types of debt that Bankruptcy
cannot protect you from. Although they will be listed on
bankruptcy documents, they survive the bankruptcy and you are
required to pay them in full. These include:
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Alimony /
Support payments |
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Debts due to
Fraud, Embezzlement or Misappropriation |
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Court fines &
Penalties (including restitution orders) |
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Awards of the
Court for intentional bodily harm, sexual assault or
wrongful death |
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Creditors not
disclosed to your Trustee |
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Student loans
(in certain circumstances) |
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What am I responsible to do if I file for
Bankruptcy?
Once you have filed a bankruptcy, you are
responsible to do a few key things.
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Disclose All of your Debts |
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Turn
All Credit Cards over to Trustee |
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Attend 2 Counselling Sessions & any other meetings that may
become necessary |
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Notify trustee of any change in address, telephone,
employment, family situation or other conditions during
bankruptcy |
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Submit Tax information to Trustee |
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File
Monthly Income & Expense Statements with trustee |
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Aid
Trustee with disposal of any non-exempt assets & any other
matters that become necessary |
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Make
monthly payments to the Trustee |
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How long does Bankruptcy last?
The typical first-time bankrupt is usually
discharged from bankruptcy in nine months unless you have failed
to complete any of your duties or there is an objection.
What are the Benefits of filing bankruptcy?
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Creditors stop calling
immediately. |
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No more debt
payments or interest charges |
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Financial counselling
to help prevent future difficulties |
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Garnishees
are stopped. |
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Exempt Assets
are protected. |
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Your unsecured
debts are cleared. |
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You have a
Fresh Financial Start! |
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What is the Downside of filing bankruptcy?
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Negative impact on
Credit Rating
(R9 listed with Credit Bureau for a maximum of 6 years after
discharge). |
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Must
give up credit cards
during your bankruptcy. |
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Tax refund
for year of Bankruptcy goes to Trustee for benefit of
creditors. |
For your free, no obligation consultation
Contact us today!
| © 2004 Goth & Company Inc. All rights
reserved. |
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