Bankruptcy in Ontario: Answers to Your Questions about Ontario Bankruptcy

In 2008, 36,200 residents of Ontario declared personal bankruptcy, and a further 14,242 people in Ontario filed a consumer proposal. That's an increase of over 16% from the number of filings in 2007, so the bankruptcy rate is increasing. Here's what you need to know:

First, bankruptcy is a legal process. When you go bankrupt a trustee in bankruptcy is appointed. The trustee is responsible for administering your file, and to make sure that you, and all of your creditors, follow the rules. Click on the Find An Expert Near You link to contact a trustee to review your situation. All trustees on this site provide free initial consultations.

Second, before you file bankruptcy you should consider all of your other options. Review your monthly budget and determine if you can cut expenses to allow you to repay your debts on your own. Perhaps consider a debt consolidation loan to combine all of your debts into one manageable monthly payment. Contact a non-profit credit counsellor to see if you have sufficient income for them to negotiate a monthly payment plan with your creditors.

Another great option for many people is a consumer proposal. A consumer proposal is an alternative to bankruptcy in Ontario. A trustee administers the proposal where you make monthly payments to deal with your debts, and avoid bankruptcy. If after considering all of these options bankruptcy is still necessary, your trustee will help you assemble the required information to begin the process.

Third, in a bankruptcy you are allowed to keep certain assets, called exempt assets. These rules vary from province to province, so if you live outside of Ontario you should contact a trustee in your province. Read our article about what do I get to keep if I go bankrupt in Ontario? for more details.

Fourth, you are required to attend two credit counselling sessions before you will be discharged from bankruptcy in Ontario. At these sessions you will discuss budgeting, and ways to re-build your credit when the bankruptcy is finished.

Finally, during the bankruptcy you will be required to make a payment to the trustee based on your monthly income. Your trustee will explain this calculation in detail prior to the start of your bankruptcy (and if you don't understand the calculation, please ask)!

Deciding whether to file for Ontario bankruptcy can be a difficult decision. If you choose to go bankrupt, you will be able to get rid of most, if not all of your debts, but your ability to get credit in the future could be substantially impacted.

Since the rules are complicated, we suggest you contact a trustee. Our bankruptcy trustees in Ontario offer a free initial consultation; to arrange for one and get your bankruptcy Ontario related questions answered, please contact us today.

Remember, financial problems do not usually go away on their own, so the sooner you take action, the sooner you will get a fresh start.