BANKRUPTCY
To declare bankruptcy is to exercise a right allowing you to get out of debt and have a fresh start, under fair and equitable conditions, in accordance with the Act. Bankruptcy is a legal option toward a financial turnaround for anyone who may have suffered a financial setback.
After you have declared bankruptcy, you are no longer required to make any payments to your creditors, except to those creditors that hold a lien on property that you wish to keep. Moreover, unpaid creditors cannot initiate legal proceedings against you, or continue any proceedings that are in progress.


PROPERTY EXEMPT FROM SEIZURE
The property that is exempt from seizure includes primarily :

  • The moveable property which furnishes the main residence, used by and necessary for the life of the household, up to a market value of $6,000.
  • The food and clothing.
  • The tools and instruments needed for the personal exercise of a professional activity (ex. Mechanic’s tools).
  • The personal documents and family portraits.
  • The alimony and child support paid to you.
  • The equipment necessary for a handicapped person to get around.
  • All goods received in an inheritance (provided that the last will contains the appropriate covenant).
  • CSST and invalidity indemnities.


ASSIGNEMENT OF PROPERTY
When you file for bankruptcy, you transfer all of your property (except for property exempt from seizure) to the bankruptcy trustee, to be sold or settled for the benefit of your creditors. The profit from the sale is then distributed to the creditors according to a predetermined order as set out in the Act.

DEBTOR'S COMMITMENT
In most personal bankruptcies, the debtor is required to make monthly payments to his trustee. The payments are based on his(her) capacity to pay, and are determined at the outset of the bankruptcy proceeding.
In order to make the bankruptcy option as accessible as possible, special consideration is provided for establishing a monthly payment schedule for those debtors that are self-employed or who do not earn income on a regular basis.

ORDER OF DISCHARGE
One of the most significant end results of the bankruptcy discharge is the release of the majority of the debtor’s debts.
The order of discharge releases all of the bankrupt’s debts, except for the following :

  • Any fine or penalty imposed by a court in respect of an offence, or any debt arising out a recognizance or bail (ex. Traffic violations);
  • Any award of damages by a court in respect of bodily harm intentionally inflicted, or sexual assault, or wrongful death resulting therefrom (ex. Conjugal violence);
  • any debt or liability for alimony;
  • Any debt or liability under an order for the maintenance and support of a spouse or child living apart from the bankrupt
  • Any debt or liability arising out of fraud, embezzlement, misappropriation while acting in a fiduciary capacity (ex. Social welfare or employment insurance benefits obtained by false misrepresentation);
  • Any debt or liability for obtaining property by false pretences or fraudulent misrepresentation (ex. Credit cards issued based on fraudulent information);
  • Any liability for the dividend that a creditor would have been entitled to receive on any provable claim not disclosed to the trustee;
  • Any debt or obligation in respect of a student loan guaranteed by the government where the date of bankruptcy occurred before the date on which the bankrupt ceased to be a student or within 10 years (soon to be reduced to 7 years by the end of 2008) after the date on which the bankrupt ceased to be student.
  • Any debt for interest owed on any of the above noted non-dischargeable debts.