Q: What are the advantages of declaring personal bankruptcy?
A: Your unsecured creditors must stop any collection actions against you, including legal actions, and any garnishment on your wages or bank account stop. You are released from unsecured debt and free to make a new start.
Q: Can I go to jail for declaring bankruptcy?
A: Honest but unfortunate debtors who file truthfully don’t go to jail. There are no criminal charges associated with filing for personal bankruptcy.
Q: Will people find out about my bankruptcy?
A: It will be on public record, and all your creditors (secured and unsecured) will be notified. Your employer will only be notified if the trustee is required to stop your wages from being garnisheed.
Q: Will I lose my house?
A: It depends on the amount of equity you have in the property. You may be able to pay the value of the equity to your trustee to be distributed to your creditors. As long as you are able to keep current with your mortgage payments, you may be able to keep your home. Talk to GTA Credit advisor or your mortgage lender about your unique case.
Q: Will I have to sell my assets?
A: Not necessarily. GTA consultant will advise you about which assets may need to be sold or distributed. If you have assets in which there is no equity (if you owe more on a secured loan for an item, a car for
example, than the item is worth) and your trustee agrees, you may be able to negotiate with the lender to keep the asset.
Q: Does declaring personal bankruptcy cover all my debts?
A: No. Personal bankruptcy covers only unsecured debts, and some unsecured debts aren’t covered, such as child support, alimony, court fines and penalties, or debts that are found to be fraudulent. Student loans may be covered if you stopped being a student more than seven years ago, and can meet some other requirements. Secured debts such as mortgages are car loans are not covered by bankruptcy unless you relinquish ownership of these assets. Always discuss your unique situation with GTA Credit consultant.
Q: What happens if my bankruptcy doesn’t get discharged?
A: Once the trustee has completed the administration of your case and been discharged, if your bankruptcy isn’t discharged, you will remain responsible for your debts and your creditors can resume their collection actions.
Q: Why wouldn’t my bankruptcy be discharged?
A: Your trustee or your creditors can prevent your bankruptcy from being discharged if you don’t perform your obligations during the nine months after you declare, such as not showing up for credit counselling sessions or not provideng monthly income & expense report or failing to make the required monthly payments to your trustee.
Q: I have to leave the country for work. Can I declare bankruptcy first?
A: Talk to GTA consultant about your unique situation.
Q: How long does bankruptcy take?
A: From filing to discharge, a normal first bankruptcy takes nine months or more (if you have surplus). There are some factors that will affect that, such as if this isn’t your first bankruptcy, you have surplus income, your creditors dispute your bankruptcy or you fail to meet your obligations. Talk to your trustee about your unique case.
Q: What happens if a creditor I forgot to include in the bankruptcy contacts me after I’m discharged?
A: In most cases, as long as the debt was incurred before you filed for bankruptcy and is a provable debt, your trustee will send notice to the creditor and it will be cleared. Talk to your trustee..