filing bankruptcy - know your options
At BDO, we understand that filing for bankruptcy is a serious and often emotional decision. In many cases, stress is compounded by that fact that some people who consider filing for bankruptcy do not fully understand what it means to file for bankruptcy, or what is involved in the bankruptcy process. Filing for bankruptcy may be the right solution if you:
Owe more money than what you earn
Are unable to make your regular debt re-payments on your credit cards, loans
Are unable to pay your monthly bills
Have had your wages garnisheed
The benefits of filing for bankruptcy
Although filing for bankruptcy may make you feel like you’ve “hit rock bottom”, there are several benefits that can give you significant relief from your debt, as well as your anxiety. Benefits include:
Protects you from creditors taking legal action against you
Protects certain assets that creditors may otherwise be able to take
Releases you from most, if not all, debts (i.e. you will not have to pay them back)
Offers you counselling to assist with your financial future
Relieves your financial stress and helps you get a fresh start
Learn more about the benefits of filing for bankruptcy.
Important facts about filing for bankruptcy
The important facts you should know about filing for bankruptcy include:
You will not lose everything by filing for bankruptcy - Contrary to popular belief, you will not “lose everything” by filing for bankruptcy. The Bankruptcy and Insolvency Act works with provincial legislation to protect many personal assets, including your car, furniture and RRSPs, which are often exempt from seizure by the trustee.
Bankruptcy offers immediate protection from harassing calls from creditors - You will be protected immediately from creditors’ legal actions and pressure from collection agencies. Their phone calls, as well as any wage garnishments, will stop.
A fresh start is right around the corner - You will get a fresh financial start immediately and can be eligible to be discharged from your bankruptcy in as soon as nine months.
Bankruptcy is a legal process to which thousands of Canadians turn - Bankruptcy is designed to relieve honest but unfortunate debtors of their debt burden. You have responsibilities to your creditors under the process, including checks and balances, to make sure that bankruptcy is fair based on your circumstances.
Need more bankruptcy information?
Costs of filing bankruptcy
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Your BDO Trustee will discuss the costs of filing for bankruptcy with you to ensure you understand the way bankruptcy costs are calculated and answer all of your questions.
While there are certainly costs when filing for bankruptcy, in the long run it is generally less expensive than many other debt management options. |
What you can and cannot keep
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Understanding which assets you can keep and which you must give up when you file for bankruptcy can be confusing. Bankruptcy exemptions also vary from one province and territory to another. For more information on how filing for bankruptcy will affect your assets, check out our information on bankruptcy exemptions. |
Bankruptcy and your house |
A common question about filing for bankruptcy is whether you can keep your home, and how your mortgage will be affected. Many individuals have the option of keeping their houses if they pay the equity to the trustee. There are also many other assets you can keep |
Debts not included in bankruptcy |
Not all outstanding debts can be erased through bankruptcy. Please review our information on what debts and financial commitments will not be discharged by the process. |
Bankruptcy and divorce/child support |
Learn how filing for bankruptcy will affect child support and bankruptcy or alimony payments. |
Tax debt |
Do you have tax debt owing to the Canada Revenue Agency (CRA)?Unpaid taxes owed to the CRA often represent a significant amount of the debt owed by those with financial problems. A discharge from bankruptcy releases debts owing to the CRA. |
Alternative to filing for bankruptcy |
Filing for bankruptcy may not be your only option to relieve debt problems. BDO offers an alternative to filing for bankruptcy that can help you get out of debt ―without going bankrupt. Find out more about how making a proposal to creditors can help you get out of debt |
Check out our frequently asked questions (FAQ) section for more information about bankruptcy.