Bankruptcy
Financial problems can arise at any time and for a variety of reasons, from the loss of employment to marital break up or simply too much consumer credit. When faced with financial problems beyond one's control many people are stressed and need a source of information that is easily accessible without causing additional stress and embarrassment. Allan Marshall & Associates Inc recognize these needs and our staff have designed this website to explain in simple terms the duties, restrictions and responsibilities of a person who declares bankruptcy. Should you require additional information or wish to schedule a FREE information session please contact one of our offices.
What is Bankruptcy? Who qualifies for Bankruptcy? Major steps in Bankruptcy What Duties does a Bankrupt have? Will I lose my assets in a bankruptcy? What debts survive bankruptcy? How do I file for Bankruptcy? Bankruptcy Frequently Asked Questions (FAQ) Consumer information Form
What is Bankruptcy? Bankruptcy is a legal process that permits honest, but unfortunate, debtors the ability to obtain a discharge from his or her debts. The purpose of the Bankruptcy is to allow debtors, who would otherwise be unable, the ability to start over financially. Who qualifies for Bankruptcy? Any person or company who resides or carries on business in Canada whose liabilities to creditors amount to at least $1,000 and: Is unable to meet their obligations as they generally become due; or Have ceased paying current obligations in the ordinary course of business as they generally become due; or The total of all a persons property sold at fair market value, would not be sufficient to enable the debtor to pay all their debts; A person or company meeting the above requirements technically would qualify for bankruptcy. (We would like to caution readers of the fact that even though you qualify for bankruptcy it still may not be your best or only option.) Major Steps in Bankruptcy Briefly described below are the major steps associated with making a voluntary assignment in bankruptcy: Schedule a meeting with a licenced Trustee for an initial consultation. The purpose of an initial consultation is to assess a debtors options, explain how each option will impact the debtor and answer any questions. Please note most trustees, including our firm offer initial consultations at NO cost or obligation. Sign the Statutory Bankruptcy Documents If you decide to proceed with bankruptcy the trustee will help prepare the necessary bankruptcy documents to be signed and filed with the Official Receiver. (Please Note: You are not bankrupt until these documents are signed and filed.) Stay of Proceedings. Once the Bankruptcy documents are filed a stay of proceedings is in place to protect you from your creditors. A Stay of Proceedings acts as a legal wall to stop Creditor harassment, Collection Proceedings, Garnishments and even Interest. Mail Notice to the Creditors When the trustee receives confirmation from the Official Receiver the bankruptcy documents were filed the trustee mails notice of bankruptcy to the creditors. Meeting of Creditors The creditors have the right to request a meeting with the Trustee and Debtor. If a meeting of creditors is requested the trustee will schedule the meeting, and send notice to all parties advising of the date, time and location of the meeting. (The vast majority of bankruptcies do not have a meeting of creditors requested.) Duties of Bankruptcy Bankrupt's are required to comply with their duties in order to qualify for a discharge from bankruptcy. The duties of a Bankrupt are discussed in the next section. Discharge from Bankruptcy A discharge from Bankruptcy is the process of getting out of bankruptcy which releases a bankrupt from their debts. A first time bankrupt will automatically be discharged from Bankruptcy after 9 months plus a day as long as they have complied with their duties and there are no objections. (Most first time bankrupt's receive their automatic discharge.) Second time bankrupt's discharges are heard before the Court. Bankrupt's Duties The Trustee will review any duties that apply to your specific circumstances, but the following list are some of the common duties a bankrupt would be required to perform or comply with during a Bankruptcy. attend two financial counselling sessions; deliver all credit cards to the trustee Prepare and deliver a monthly Income and Expense form to the trustee Pay surplus income to the trustee for the benefit of your creditors (If Applicable) Advise the Trustee of any Windfalls received during the bankruptcy process ( e.g. Lotteries, inheritances) Assist in supplying and preparing required tax returns Keep the Trustee notified of your current address and phone number at all times during the bankruptcy. Generally be honest and co-operative Will I loose all my assets in a Bankruptcy? In New Brunswick, an individual is entitled to keep specific items defined by the Memorials and Executions Act . These items are designated as "Exempt" under provincial law and remain property of the bankrupt. The following is a summary of items you are generally able to keep: Food, clothing and fuel necessary for the debtor and their family Furniture, household furnishings and appliances not exceeding $5,000 Assets required to earn income up to $6,500 Personal motor vehicle required for work or medical reasons not exceeding $6,500 Child Tax Benefit Necessary medical and health aids Pets belonging to the debtor Pension Plans Certain exemptions pertaining to a farmer Please Note: These exemptions are subject to valid liens against the property. What debts survive Bankruptcy? Bankruptcy is able to discharge most debts including Income Tax, however there are some debts it is unable to discharge. The following in a list of debts bankruptcy is unable to get rid of: Secured debts, where the bankrupt has agreed to retain the asset ( eg. Mortgage or car loan); Alimony, Child support or maintenance payments Court fines, penalties and traffic offences Debts arising out of fraud or defalcation; Property obtained by fraud or by false misrepresentation; Award of damages by a court for intentionally inflicting bodily harm or sexual assault; Student loans until you have been out of school for 10 years. (Currently the time limit on student loans is under review. If you wish to verify the time limit please contact our office) How do I file for Bankruptcy? The first step to filing for Bankruptcy is to contact a Trustee like "Allan Marshall & Associates Inc" to discuss your option. In order to advise you in a meaningful manor the Trustee will request you bring a completed consumer information form with you to the "Free" initial meeting. The information contained on this form will allow a Trustee to quickly and accurately assess your options, discuss your alternatives and answer your questions. If you decide to file for bankruptcy you would be required to provide the trustee with the necessary information required to prepare the Bankruptcy Documents. The Bankruptcy Documents must now be signed and sworn and filed with the Official Receiver. (Once the documents are filed you would be officially bankrupt.) > For More Information At NO COST or OBLIGATION. Contact Allan Marshall & Associates Inc. 1-888-371-8900 We Can Help! Frequently Asked Questions about Bankruptcy? If you would like to review our frequently asked questions and answers section on personal bankruptcy click here!

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