Bankruptcy or insolvency is a legal status of a person or an organization that cannot repay the debts they owe to their creditors. Bankruptcy in Canada is set out by federal law, in the Bankruptcy and Insolvency Act and is applicable to businesses and individuals. The office of the Superintendent of Bankruptcy, a federal agency, is responsible for ensuring that bankruptcies are administered in a fair and orderly manner. Bankruptcy is filed when a person or a company becomes insolvent and cannot pay their debts as they become due.
Pegasus Credit Counsellors have experience working alongside Trustee’s in Bankruptcy and can help you find a solution that best fits your financial situation. Our process is very simple! First, we have an initial no-obligation consultation in which we review your financial situation. After reviewing your scenario, we come up with a custom-tailored solution that best fits your needs. Our counsellor will then guide you on a step by step process to implement this tailored solution. If you decide to proceed further then the Counsellor will set up a second consultation in which we will start your process.
Filing a Bankruptcy will automatically eliminate the following:
- Legal actions by creditors
- Collection proceedings
- Asset repossession
- Wage assignment
In Bankruptcy, there are conditions when certain assets are not exempt.
Your following assets will be exempt in a Bankruptcy:
- Property: when there is no equity available
- Income: an individual is within the Income Standards set out by the Office of Superintendent of Bankruptcy (no surplus), income to be monitored monthly.
- Personal effects up to $5,650.00
- Household goods up to $11,300.00
- Tools-of-trade up to $11,300.00
- Farmer’s tools up to $28,300.00
- Motor vehicles up to $5,650.00
Debts that can be eliminated with a discharge of Bankruptcy:
- Unsecured credit cards & lines of credit
- Unsecured personal loans
- Income tax debts: if not classified as overpayment
- Student loans: if more than 7 years old
- Business debts: personally guaranteed only
- Utility bills: should the services not be required anymore
- Pay day loans
- Medical bills
Debts that can NOT be eliminated with a discharge of Bankruptcy:
- Fines imposed by the court
- Certain government overpayment’s
- Debts that arose as a result of fraud or theft
- Court awarded damages for sexual assault or intentionally inflicting bodily harm
- Child & Spousal Support
- Student loans: less than 7 years old