4 First Steps When Filing For Bankruptcy

When the time comes for you to file for bankruptcy, it can appear to be a scary or daunting task. However, it does not have to be. It is true that you probably wish that it had not come to this.

However, if nothing can be done, then try to view it in a different light. For example, think of it as a step in the right direction for you to get rid of your debts and remove the dark cloud that’s been hovering over you. It is time to start again. Here are the steps you need to take to file for bankruptcy in Canada.

1. Recognize Your Debt Situation

You must first understand what your debt situation is. You need to understand and perhaps even accept that you cannot work out this problem on your own. Here are a few things that will tell you that you are in serious financial trouble:

  • you have not made several payments such as a mortgage or loan
  • all credit cards are at their limit
  • credit card cash advances are how you’re paying bills
  • collection agencies are constantly on your back
  • the money you owe has resulted in legal action against you

2. Seek A Licensed Insolvency Trustee

If you have to declare bankruptcy, you need to get a Licensed Insolvency Trustee. They are the only ones who can administer bankruptcies. By getting their guidance, you will understand what you need to do to file for bankruptcy. You can also explore whatever debt relief options you have for your situation.

Please make sure that you select a trustee who is either local or one that you can at least easily get hold of. You also need to be comfortable working with them. You should be able to ask any questions regarding your predicament so that you understand it better.

A very important consideration is that they must be licensed by the Superintendent of Bankruptcy. As long as they are listed at Bankruptcy-Canada.ca, you don’t have to worry, because this means that they are licensed.

3. Prepare the Documentation

There is normally a free initial consultation. During this first meeting, you need to bring several things such as documentation that reveal your financial situation. There may actually be an option to bankruptcy, but it all depends on each individual’s situation. If you do have an option, then you will be advised about it. However, in the end, the final decision on what to do is entirely yours.

4. The Filing Process

If you do indeed need to file for bankruptcy because you have no other alternative, you will need to fill a form that your trustee will provide. They need to take care of the paperwork and they will require all of your personal information, such as full name, date of birth, a list of all your creditors and a list of your assets. Your trustee will start the paperwork and go through everything with you. You need to sign and then the actual bankruptcy process begins.

After filing, the lawsuits against you will stop and nobody can contact you for payment. Your trustee will send information to creditors. You will be advised on your duties. When all is said and done, your debts will be cancelled. Your credit report will have your bankruptcy information. Your bankruptcy trustee will help and advise you on rebuilding your credit and managing your money.

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