We’ll Walk You Through the Process Step-by-Step
If you are facing a personal financial crisis, it’s important to know you are not alone. Many people have found themselves in similar situations, and the best way to get through it is to find a federally licensed team to offer the guidance you need as you file for bankruptcy. You do not have to navigate this confusing and challenging process on your own. The team at J. Bottom & Associates Ltd. is here to ensure the insolvency process goes smoothly for you, so you can get a fresh start and set yourself up for future financial success. We are experienced in all the rules and regulations of the Bankruptcy and Insolvency Act in Canada, so you can feel confident that we’ll help you take care of the problem. Please reach out to us for more information or to discuss your unique situation.
Recognize that You Need Help
The first step in the insolvency process is realizing that you have gotten yourself into financial trouble. It can be easy to ignore your struggles by continuing to borrow every time you have to pay bills, but that will only make your problems worse in the long run. As soon as you begin to struggle to pay for your necessities because your debt payments are so large, it’s a sign that you have accumulated too much debt. You may be facing a significant financial crisis if you:
- Continually exceed your spending budget every month
- Use credit cards as a necessity instead of a convenience
- Only make interest or service charges every month
- Do not reduce your total debt over several months
- Receive pressure from creditors in the form of a wage garnishment or repossession notices
- Have your utilities shut off due to non-payment of bills
Contact a Licensed Insolvency Trustee
Once you realize that you are in financial trouble, it’s important to find a bankruptcy team that will look out for your best interest. This means finding a licensed insolvency trustee (LIT) to represent you throughout the process. A LIT is an officer of the court and is the only professional authorized to administer government-related insolvency proceedings that can discharge you from your debts. The trustee will represent a balance of interests between you and your creditors, helping to reach a resolution that both sides are happy with. They will help to assess your situation and give advice about the bankruptcy process while ensuring your rights and the rights of the creditors are respected.
Consider a Consumer Proposal
There are several ways to find relief from a financial crisis. Before jumping immediately to bankruptcy, it’s important to consider your other options. One of these options is filing a consumer proposal. You are eligible for a consumer proposal if your debts total less than $250,000, not including your mortgage. In a consumer proposal, you will lay out a plan to pay your creditors a percentage of what you owe or propose an extension on your repayment period. Your creditors then have the option to either deny or approve the proposal. If approved, you will make payments to your LIT, who will then divide the money among the creditors. This is an excellent option for those who can make a monthly payment, as it eliminates the need to declare bankruptcy and allows you to keep your assets.
File for Bankruptcy
If you are not eligible for a consumer proposal and are unable to solve your debt problems in any other way, filing for bankruptcy is the only way out. You should only file for bankruptcy as a last resort after you have exhausted all other options. Your LIT will help you fill out all the necessary forms for bankruptcy, and once filed, you will be formally declared bankrupt. The LIT will not be responsible for dealing with the creditors, and all phone calls from the creditors to you should stop. All your assets, other than those that are exempt, will be turned over to the LIT, who will then sell them and use the money to pay back your creditors. Therefore, bankruptcy should be a last resort only. When filing bankruptcy, you will also be responsible for:
- Attending Mandatory Counselling: You will be required to participate in two counseling sessions led a professional or LIT, which will teach you methods to help you better manage your future finances.
- Paying Filing Fees: You will have to pay the fees required when you file your bankruptcy. These fees will vary from case to case and are regulated by the federal government.
Understanding What Happens after Filing
Unfortunately, the process isn’t over after you file bankruptcy, and your assets have been used to repay creditors. The process will not be over until you are discharged from bankruptcy, which will take several months. In addition, a bankruptcy will affect your life for a significant period, and it’s essential to understand how. It’s important to understand the following points once you file for bankruptcy:
- Discharge: Obtaining a discharge will take nine months or longer, depending on the specifics of your case. In some cases, you may be discharged automatically if you meet specific criteria.
- Credit Rating: A bankruptcy is reported to credit bureaus and will be on your credit record for the entire proposal term plus another three years. First-time bankruptcies are usually removed from your credit report about six or seven years after you are discharged.
- Public Record: Bankruptcy and insolvency records are public records and are accessible to anyone who makes a request for the information.
- Mediation: Bankruptcy mediation is available to help you solve a dispute between either your LIT or your creditors.
Contact Us Today
If you are amid a personal financial crisis, you don’t have to navigate it alone. Hire a bankruptcy trustee who will help you achieve a fair outcome and protect your rights. Please reach out to J. Bottom & Associates Ltd. today for more information.