Alternate solutions >> Bankruptcy :

Q: What is a bankruptcy and what are its advantages?

A: A bankruptcy is a legal process which will discharge you from most of your debts. The objective of this law is to allow a honest but unlucky person to be discharged of his debts under reasonable conditions.

In order to declare bankruptcy, one must be insolvent, which means:

Owing at least $1,000 to your creditors and not being able to meet your obligations as they become due.

When you file for bankruptcy, your seizable goods are remitted to the trustee. The trustee will then be responsible to sell the goods and distribute the proceeds among your creditors. Furthermore, when bankruptcy is declared, your non-secured creditors no longer have the right to collect ther due by the means of seized salary or goods. Moreover, it is possible to jointly file bankcruptcy with your spouse. A joint bankruptcy consist in allowing two individuals, who maintain a close financial relation, to jointly resign their goods and have their cases proceeded as if there was only one case. The trustee will allow such a procedure if the debts are substantially the same and if it is in the best interest of both the debtors and the creditors.

Q: How can I file for bankruptcy ?

A: The first step is to come and meet one of our professionals, who will go over your financial situation. At the same time the trustee will explain what options are available to you. Then if you decide to declare bankruptcy, the trustee will help you fill out the proper forms. You will be declared bankrupt only when the trustee hands over these forms to the official receiver's office.

Q : What type of forms do I have to sign ?

A: You will have at least two forms to sign. One is the "balance sheet" and the other is a "cession". In the balance sheet, you state all your assets and liabilities as well as all your sources of revenue and expenses. In the second form, you declare that you remit all of your assets in the hands of the trustee to your creditors' benefit.

Q: What will happen at the first creditors' meeting ?

A: If a meeting is called, the trustee will present a report of your assets and liabilities. The creditors may ask questions related to your financial situation. Then, the creditors will have the occasion to vote on the trustee's nomination. They also have the possibility to vote on the nomination of inspectors. The creditors can also state some instructions regarding the administration of the debtor's file.

Q: When is a debtor discharged ?

A: In the case of a first bankruptcy, there will be an automatic discharge nine months after the bankruptcy was filed. Unless a creditor, the trustee, or the superintendent of bankruptcy objects to the discharge. The trustee can also recommend a conditional discharge in the following cases:

- The debtor has filed for bankruptcy when he should have filed for a "proposition"
- The debtor has not fully paid the agreed revenue surplus.
- If it is not the first bankruptcy, or the debtor is simply not admissible to an automatic discharge the trustee must, in the year that follows the registration date, ask the court to hear the discharge request. The court has a variety of decisions to choose from for those requests.

Q: What type of discharge order can be issued by a judge or a registrar ?

A: At the hearing of the request for a discharge, the court will decide upon whether to postpone the hearing, to reject the request, or to issue one of these three orders:

- Order of absolute discharge

Under the provided reserves in the law, this order discharges you from your accrued debts before the registration date of the bankruptcy.

- Conditional order of discharge

In this case, the court can place conditions as a prerequisite for the debtor's adsolute discharge. For example, the court can request the payment of specified amounts to your trustee that will be distributed among your creditors.

- Postpone the order of discharge

The court orders a delay in virtue of which the discharge will be granted at a later date.

Your discharge could be postponed by the opposition of one of your creditors, the trustee, or the superintendent of bankruptcy for reasons such as ; a criminal inquiry in process or a breach of one of the obligations stated in the bankruptcy and insolvency act.

Q: What can be the implication of a bankruptcy on employment ?

A: In most cases, a bankruptcy does not compromise your employment.

Q: Does it cost something to file for bankruptcy ?

A: Yes. There are registration fees that must be paid to the superintendent of bankruptcy. Moreover, the trustee is entitled to charge a professional fee as prescribed in the bankruptcy and insolvency general rules.

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