Choosing Bankruptcy

What is Bankruptcy?

bankruptcyBankruptcy is a legal process in which one can “walk away” from his or her debts.

It provides a chance to start fresh by having the debts forgiven and in exchange, the creditors are given a chance to obtain repayment based on assets available if there are any.

You may be required to make small monthly payments to the trustee depending on your surplus income. Surplus income means the excess income over that required to maintain a reasonable standard of living as established by the Federal Government.

A first bankruptcy is automatically discharged in as little as nine (9) months or twenty-one (21) months after the date of filing bankruptcy if you fully meet the terms. The second time bankruptcy can take twenty-four (24) or thirty-six (36) months.

Contrary to many misconceptions, you can retain various assets upon filing bankruptcy. In Ontario, you can retain the following assets:

  • Personal effects (e.g. clothes, jewellery, collectibles, musical instruments, etc.) valued less than $5,650
  • A vehicle valued less than $5,650;
  • Household goods (e.g. furniture, kitchen pots and pans, etc.) valued less than $11,300
  • Tools of a trade valued less than $11,300
  • Farmers’ equipment valued less than $28,300
  • Registered Retirement Savings Plans – only contributions made before the 12 months preceding the bankruptcy filing date.
  • Work pensions that are restricted from withdrawing funds
  • Cash surrender value from life insurance policies where beneficiaries are eligible family members

You are able to retain other assets by paying to the trustee the fair value of the assets less any outstanding loans/mortgages on them as at the date your bankruptcy was filed.

At Manku & Associates Inc., we are licensed to file your bankruptcy.