Bankruptcy
Understanding Bankruptcy in Ontario with Maple Leaf Associates
Bankruptcy is a legal proceeding available to individuals facing severe financial crises. The primary goal of bankruptcy is to allow individuals overwhelmed with debt to gain a fresh start by freeing themselves from their financial burdens. At Maple Leaf Associates, we are here to guide you through this process and help you reclaim your financial stability.
What is Bankruptcy in Ontario?
Bankruptcy in Ontario is a formal process that provides relief to those who are unable to pay their debts. By filing for bankruptcy, individuals can eliminate most of their debts and start anew. It involves working with a Licensed Insolvency Trustee (LIT) who will oversee the process and ensure that it is conducted fairly and in accordance with the law.
Who Is Eligible to File for Bankruptcy?
To be eligible to file for bankruptcy in Ontario, you must:
Owe at least $1,000.00
Be 18 years of age or older
Be unable to meet regular payments to creditors as they become due
Frequently asked questions
Can I Choose Which Debts Are Included?
No, all debts must be included in the bankruptcy. However, some debts will survive the bankruptcy and will still need to be paid, including:
Court fines
Debts obtained through misrepresentation or fraud
Alimony or maintenance payments
Damages awarded by a court for intentionally inflicting bodily harm or sexual assault
Student loans if bankruptcy is filed before or within 10 years after the termination of studies
Will My Creditors Stop Harassing Me?
Yes, they will! By law, all collection actions against you must cease once the bankruptcy documents are filed. However, this does not apply to secured creditors, such as banks holding a lien on a car or a mortgage on real property.
What Happens to My Assets?
In Ontario, the assets you are entitled to keep are determined by the Execution Act. Generally, you can keep:
Necessary clothing and personal effects up to a value of $5,650.00
Household furnishings and appliances up to a value of $11,300.00
Tools of the trade that help you earn income up to a value of $11,300.00
Automobiles up to a value of $5,650.00
Additionally, in certain cases, the cash surrender value of life insurance policies (including some R.R.S.P.s) can be retained, and generally, pension plans are not seizable.
What About Real Estate Assets?
The Trustee will examine the title documents to your home or any other real estate assets to determine if there is any equity belonging to you. This equity is an asset of your estate. If there is no equity, the Trustee will release its interest in the property to the mortgage holders. If you wish to remain in possession of the property, you must continue to pay your mortgage.
When is My Bankruptcy Over?
For individuals who have not been bankrupt before, an automatic discharge will occur after nine (9) months, provided that the creditors, Superintendent of Bankruptcy, or Trustee do not oppose your discharge and you have attended mandatory counseling sessions.
Your Duties During Bankruptcy
While undischarged, you have several legal duties, including:
Disclosing all your assets and liabilities to the Trustee
Attending financial counseling sessions
Assisting the Trustee in dealing with your property
Attending a meeting of your creditors
Attending an examination by the Official Receiver, if required
Keeping the Trustee informed of your address and any changes in your financial circumstances
Fulfilling your financial contribution obligations to your estate
Failure to comply with these duties may delay your discharge from bankruptcy. Our experts at Maple Leaf Associates will thoroughly explain these duties to you and provide support throughout the process to ensure compliance and a smooth transition.
Get a Fresh Start with Maple Leaf Associates
Bankruptcy can be a difficult decision, but it can also be a pathway to a new beginning. At Maple Leaf Associates, we offer compassionate, professional guidance to help you navigate the bankruptcy process and emerge with a clear path to financial recovery. Contact us today for a consultation and take the first step towards a fresh start.