There is a great deal of confusion about the filing of bankruptcy in Canada vs. the United States. This article will focus on the filing of a bankruptcy in Canada. The bankruptcy process starts with initially consulting with a licensed Trustee. You need to meet with a trustee who is licensed by the federal government and practices in your local area. So the first step is to contact a local trustee and set up a time for them to evaluate where you are at financially. To be able to adequately explain all your options and give any quality advice this trustee will begin by reviewing the details of your financial situation. To do this they will sit down with you in person and talk about the fundamental areas of our personal finances (i.e. assets, income, living expenses and debts). To assist with this it is important that you come prepared to this meeting with a list of this information. Now while preparing this information remember it is not essential that this information is exact, the trustee doesn’t need to know the amounts down to the penny, but they will need to know roughly where you sit in general. The reason this information is important is that the bankruptcy and how it will transpire is dependent on the specifics of your situation. So if the trustee is aware of what is happening in your life they will be in a better position to discuss what you can anticipate from the filing of a bankruptcy. In this consultation you will find that the trustee will discuss a number of things. This is both from a practical and a legal standpoint, so your trustee will do more than just review your situation, they will make sure you understand all aspects of the Canadian bankruptcy system, including what a discharge is, the duties and responsibilities that you will have as part of the bankruptcy, the specific impact on credit and some of the options to a bankruptcy.

The first step you should take to improve your after bankruptcy credit is to check your credit reports for errors. After filing bankruptcy the reporting agencies often times leave bad debts on your record rather than taking them off as required after bankruptcy. Get a copy of your credit report from all three reporting agencies, Experian, Equifax and Trans Union. You’re after bankruptcy credit depends upon your credit report, so you need to contact the credit bureaus and insist that those accounts be properly reported as „included in bankruptcy.“ If you have other serious mistakes on your credit report, those need to be corrected as well. Your credit score is based on information in your credit report, so errors on your report can seriously damage your chances of getting after bankruptcy credit.

The Canadian Bankruptcy Process After having things reviewed by a licensed trustee and you determine that a bankruptcy is the best fit, you are then are able to proceed with the filing of the bankruptcy. In order to proceed with the filing the trustee will require more detail than you originally provided. At your initial meeting your trustee will have given you a number of different reference documents as well as an application form. This application form needs to be filled out and returned to your trustee’s office for processing. Within this application is all the required information your trustee needs to prepare the formal bankruptcy documents. From here your file must be processed, your trustee’s office will need a little time to take the information in the application form an turn it into the legal documents that will make the bankruptcy official. When your trustee is finished processing your application form they will schedule a time for you to sign these documents and formalize the bankruptcy. By signing these documents court protection will be automatically put in place. This „stay of proceedings“ is protection that prevents your creditors from being able to chase you for the debt. At this point they must stop the phone calls, the interest and any other collection activity they have taken. Now practically there is always a bit of a time delay between the actual signing of the documents and all the creditors notifying all areas of their organization, but fairly quickly the creditors will be notified.. As a result of the formal filing your creditors must not deal with your trustee and you are given the necessary space to be able to focus on the duties you must complete as part of the bankruptcy process.

If you do not want to hire a bankruptcy attorney, it will be wiser for you to take advantage of the various online bankruptcy services. They are known as online bankruptcy form processors. They will help you in several ways.

The second type of credit you must prove that you can handle is an installment loan, such as an auto loan, student loan or mortgage. Loan officers looking over your application for after bankruptcy credit need to see a rock-solid installment payment history. If you still have a student loan, that usually isn’t dischargeable in bankruptcy, you can use it to quickly reconstruct your after bankruptcy credit. Remember, it is absolutely imperative to make your payments on time every single month, with no exceptions. And try to pay more than the monthly minimum even if it is just $50 bucks or so more each month. It will help you regain the trust of your lenders. Paying down your open debt is one of the best ways to prove you’re after bankruptcy credit worthiness.

The third responsibility you will have is attendance at two credit counseling sessions courses. These courses can be conducted individually or in groups, depending on what you have arranged you’re your trustee and they are required to cover topics the essential components of our personal finance (i.e. budgeting, spending habits, re-establishing credit, etc.). The goal of these sessions is one of rehabilitation, they are designed to help review and hone your financial management skills, as well as the identification and prevention of destructive habits. The fourth thing you are required to do is the sending of a monthly report to your trustee. These reports are simply a summary of your monthly income and expenses and in order to fill them out you are required to keep receipts for any money you spend during the month. At the end of the month you are required to summarize these receipts on a form that will be provided by your trustee and provide a copy of this form to your trustee. There are certain receipts that you will have to attach to this form, but the specifics of this will be reviewed by your trustee. These are the standard duties and responsibilities that each individual bankrupt must complete. There are a few other responsibilities that may be required (i.e. attendance at a creditor meeting, attendance at an examination by the Office of the Superintendent of Bankruptcy etc), but these are relatively rare and will be discussed in more detail when you meet with a trustee of the evaluation we previously discussed. In the vast majority of cases upon completing these four duties your part of the bankruptcy is complete and you become eligible for a discharge.

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