The short answer is yes. The longer answer depends on whether you have any non-exempt assets, the size of your income, and how many dependents you have.Any assets (money and possessions) that are not exempt under federal regulations or the laws of the province you live in will have to be surrendered to the licensed insolvency trustee. They will then be liquidated and the funds raised will be distributed among your creditors as determined by the bankruptcy laws.
If you have any tax refunds or GST coming to you during the period of bankruptcy, that money will be used to pay creditors.
Once you don’t have to service your unsecured debts, you may find yourself with an income surplus. Effective September 18, 2009 the Surplus Income Directive as it applies to bankruptcies was amended.(See Surplus Income Worksheet), As a simple rule of thumb, if you are required to make surplus income payments to the Licensed Insolvency Trustee your bankruptcy will be for 21 months. If you are not required to make such payments then your bankruptcy will be for 9 months. Notwithstanding the non-requirement to pay surplus income you will be required to pay the Licensed Insolvency Trustee a minimum amount for the 9 month period of bankruptcy.
Any income above the determined guidelines (the limit is set by looking at your family size, expenses, and earnings) will have to be distributed to your creditors. This is one of the reasons why you are required to fill out and present a monthly budget to the licensed insolvency trustee until your debts are discharged by the court.
There are costs attached to filing for bankruptcy, including fees, mailing charges, etc. It is likely you will be asked to reimburse your licensed insolvency trustee for these expenditures.
Frequently Asked Questions
- What is bankruptcy in Canada?
- Will bankruptcy wipe out all my debts?
- Will bankruptcy stop my creditors harassing me?
- What are the advantages of bankruptcy?
- What are the disadvantages of bankruptcy?
- What is the difference between a consumer proposal and bankruptcy?
- What causes bankruptcy?
- What is a licensed insolvency trustee?
- Can I choose my own licensed insolvency trustee?
- Does the licensed insolvency trustee work for me?
- Will the licensed insolvency trustee come to my house?
- Are my tax debts forgiven in bankruptcy?
- Are tax debts different from other debts during bankruptcy?
- Why did my licensed insolvency trustee tell me to file all outstanding tax returns?
- How long does bankruptcy last?
- What is Chapter 7 bankruptcy?
- What is Chapter 13 bankruptcy?