Bankruptcy is a legal status governed by federal legislation. The Bankruptcy and Insolvency Act (BIA) governs the whole area of bankruptcy. It is designed to act as a safety net for the honest but unfortunate debtors who find themselves over their head in debt. While it is not the only solution to debt problems it may be the best solution, depending upon your circumstances.
In order to file an assignment in bankruptcy you need the services of a Trustee in Bankruptcy, like those at LC Taylor. At your initial assessment, or first meeting, the Trustee will help you determine if you qualify for a bankruptcy. In order to qualify you must be “insolvent”. This term has a legal definition in the BIA, basically meaning your assets, if sold, would be insufficient to pay your liabilities. At the initial assessment the Trustee will be able to determine your options and provide you with some idea as to the best course of action for you.
When you go bankrupt you are actually assigning all of your assets – everything you own, have a right to, or interest in –to the Trustee for the general benefit of your creditors. There are some assets that are exempt from bankruptcy under the BIA. These exemptions normally relate to a certain amount of equity in your household furnishings, your car if required to get to and from work, and your residence. There are other exemptions allowed for farmers in certain cases, as well as RRSPs, and some insurance policies. When you meet with a Trustee, the Trustee will be able to define more precisely what assets are exempt and how the exemptions apply in your particular situation.
The BIA stipulates that if you can afford to pay something to your creditors then you should be paying that during the course of the bankruptcy. Your particular ability to pay can be worked out with the Trustee based on your specific details. These payments are paid monthly and can vary depending upon your circumstances.
An LC Taylor Trustee will review your situation with you and insure you understand all your debt options, including bankruptcy.
