Debt can be a heavy burden to carry alone. If you’re struggling to pay your bills and debt is affecting your daily life, it’s time to speak to a professional. Don’t let fear or shame prevent you from getting the support you need.
A Licensed Insolvency Trustee (LIT) can analyze your financial situation and help you decide if personal Bankruptcy in Surrey is the right debt option for you. While you probably never imagined you’d have to file for Bankruptcy, it is a powerful solution that can help relieve your financial stress. An LIT has the knowledge and experience to walk you through every step.
Personal Bankruptcy in Surrey
Personal Bankruptcy is a legal process that allows you to be discharged from most of your debts. The only way to file for Bankruptcy in Canada is through an LIT (formerly known as a Bankruptcy Trustee). While no one wants to file for Bankruptcy, it is designed to help honest Canadians get a second financial chance.
When you meet with an LIT they will first determine if Bankruptcy is the right option, or if you can consider other solutions. Your LIT will ask questions about your debt and consider factors, including whether or not you’re insolvent, if you’re facing legal actions from your creditors, and how your debt is affecting your mental health.
How to qualify for Bankruptcy?
Before you file for Bankruptcy, you have to make sure you qualify. To file for a Surrey Personal Bankruptcy, you must meet the following criteria:
- You owe at least $1,000 in unsecured debt.
- You can no longer pay your bills on time (insolvent).
- The value of your debt is greater than the sale value of your assets.
Filing for Bankruptcy in Surrey
When filing for Bankruptcy, you will work with your LIT to complete the necessary Bankruptcy paperwork. Your LIT will then submit your documents to the Office of the Superintendent of Bankruptcy (OSB), and you will be declared Bankrupt.
After declaring Bankruptcy, any wage garnishment or lawsuits against you by your creditors will stop. You can also stop making payments directly to your unsecured creditors.
What are your responsibilities in Bankruptcy?
While your LIT will take the lead on filing your documents and working with your creditors, you also have some responsibilities to fulfill, including:
- Disclosing information to your LIT about your assets and debts
- Telling your LIT if you sold or transferred any property in the past few years
- Handing over your credit cards to your LIT
- Attending two counselling sessions
- Informing your LIT in writing if your address changes
What Assets Are Exempt in Personal Bankruptcy?
To try and recoup money to pay your creditors, your LIT will sell your assets. There are some exemptions to what can be sold and these exemptions are defined by the province or territory in which you live. In Surrey, British Columbia, some exemptions include:
- One vehicle that is worth less than $5,000 (this amount is reduced to $2,000 if you owe family or child support payments).
- Tools used to earn a living up to $10,000.
- Registered plans including Registered Retirement Savings Plans (RRSPs) and Deferred Profit Sharing Plans (DPSPs) (excluding any contributions made in the 12 months before Bankruptcy).
Debts Eliminated in Bankruptcy
When you are discharged from Bankruptcy, most of your unsecured debts are eliminated, including debt from:
- Credit cards
- Lines of credit
- Installment loans
- Payday loans
- Personal loans
- Lines of credit
- Student loans (if you’ve been out of school for seven years or more)
Debts Not Eliminated in Bankruptcy
Debts that are not eliminated in Bankruptcy include:
- Child support
- Student loans (if it’s been less than seven years)
- Court-ordered fines or penalties
- Debts from fraud
How Filing For Bankruptcy Will Impact Your Credit Score
When you declare Bankruptcy, you are assigned the lowest possible credit rating. This will impact your ability to borrow money until the Bankruptcy is removed from your credit report. A first-time Bankruptcy will stay on your report for up to seven years. A subsequent Bankruptcy will remain for 14 years.
Alternatives to Personal Bankruptcy in Surrey
When you meet with your LIT they might determine that Bankruptcy is not your only option. Alternatives to personal Bankruptcy include:
Similar to personal Bankruptcy, a Consumer Proposal is a legal process that can only be administered by an LIT. In a Proposal, you and your LIT create an offer to pay a percentage of your debt to your creditors, extend the time you have to pay, or both. You have a maximum of five years to repay your debt. The benefit of a Proposal over Bankruptcy is you typically get to keep more of your assets.
In credit counselling, you work with an LIT to understand the root cause of your debt issues. Your LIT will provide education and tools to improve your financial literacy, help you get out of debt, and avoid going into debt in the future. Depending on your needs, your LIT might teach you how to create a budget and how to use it to reduce your debt.
Working With a Bankruptcy Trustee in Surrey
If you’re facing insolvency in Surrey, Bankruptcy might be your best option. An LIT can work with you to decide the best way to solve your debt issues. You don’t have to do this alone. Reach out to a debt professional at Allan Marshall & Associates today for a free, no-obligation consultation. Call us at 1-888-371-8900 or fill out our online contact form.
We look forward to speaking with you.