Honest Debt Relief
Bankruptcy laws in Canada are designed to allow an honest debtor to find relief from the burden of debt. The laws are not designed to be punitive unless the debtor has committed an offense or a crime related to their debt situation (usually some form of fraud).
Bankruptcies are administered by Licensed Insolvency Trustees. Trustees are trained, highly regulated and are required to stick to a strict code of ethics balancing the interests of debtors and creditors with the integrity of the Insolvency System.
- I will lose my house
- The Bankruptcy and Insolvency Act has provisions that prevent secured creditors from forcing the sale of assets. The only way you would lose your house is if you voluntarily surrender it as a part of your restructuring plan or if you stop paying on your mortgage.
- I won’t be able to get credit for seven years
- Some creditors may lend to you while you are bankrupt, most like to see you demonstrate financial responsibility for a year or two following your discharge before lending to you again.
- The trustee will sell all my belongings
- Most of your personal belongings are exempt from seizure including household goods, personal effects, a car, tools of the trade, RSPs as well as most Insurance funds and pensions.
- The trustee works for my creditors
- The trustee is required to be impartial and administers the legislation and rules that comprise the Bankruptcy and Insolvency Act.
- I am not allowed to have a bank account
- You will be encouraged to open a new account when you go bankrupt to cut off any automatic payments and stop the possibility of offset for debts owed to the bank you have been using.
- My employer will have to pay the trustee a percentage of my wages
- While you will have to pay the trustee’s fees the fees are not paid by your employer.
- If I go bankrupt Government debt can’t be included
- Many people go bankrupt because of large tax debt or student loan debt.
- After I go bankrupt I can’t leave the country
- Some people leave to live or work in other countries immediately after filing for bankruptcy and before they get discharged.
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