Bankruptcy and insolvency law in Canada is governed by the Bankruptcy and Insolvency Act (BIA). The BIA is a federal law that applies to all provinces and territories in Canada. The purpose of the BIA is to provide a fair and orderly process for dealing with the assets and debts of insolvent individuals and businesses.
What is bankruptcy?
Bankruptcy is a legal process that allows an insolvent individual or business to discharge their debts. Insolvency means that the individual or business is unable to pay their debts as they become due.
How to file for bankruptcy
To file for bankruptcy, you must submit a petition to the Superintendent of Bankruptcy. The Superintendent is a federal official who is responsible for administering the BIA.
The petition will have been filed by the licensed insolvency trustee you have retained. The trustee is a licensed professional who will oversee your bankruptcy case. The trustee will work with you to develop a plan for distributing your assets to your creditors.
What happens after you file for bankruptcy?
After you file for bankruptcy, you will be protected from creditors. This means that creditors cannot sue you or collect on your debts. Your trustee will work with your creditors to develop a plan for distributing your assets to them.
The plan may involve selling your assets and using the proceeds to pay your creditors. If you do not have enough assets to pay all of your creditors, you may be able to discharge the remaining debts.
What are the alternatives to bankruptcy?
There are a number of alternatives to bankruptcy, such as:
Consumer proposal: A consumer proposal is a legal agreement between you and your creditors to reduce your debt payments. Consumer proposals are only available to individuals.
Debt consolidation: Debt consolidation involves combining all of your debts into one new loan. This can make it easier to manage your debt payments and to reduce your interest costs.
Credit counselling: Credit counselling can help you to develop a budget and to create a plan for managing your debt. Credit counsellors can also negotiate with your creditors on your behalf.
How can a bankruptcy lawyer help you?
A bankruptcy lawyer can help you with all aspects of bankruptcy law, including:
- Advising you on your bankruptcy options
- Filing your bankruptcy petition
- Working with your trustee to develop a bankruptcy plan
- Representing you in court if necessary
If you are struggling to pay your debts, it is important to seek help early. There are a number of resources available to help you, such as credit counselling and bankruptcy. Bankruptcy is a serious decision, but it can be a fresh start for individuals and businesses who are overwhelmed by debt.
If you are considering bankruptcy, it is important to consult with a bankruptcy lawyer to discuss your options
This article is for informational purposes only and is not legal advice. Contact us today to discuss your specific situation.