What happens when you declare bankruptcy?

Oct 1, 2019 | Bankruptcy

Written by Crystal

Written by Crystal

Want to know what happens when you declare bankruptcy?

I’m often asked if declaring bankruptcy is anything like one of the most beloved scenes of the television show, “The Office”. The scene features one of the main characters getting advice from a well-intentioned, although extremely mis-informed friend, regarding his finances. Faced with looming debt, the character nervously enters the main office, and states in a loud voice, “I declare BANKRUPTCY!”. (never seen the show? If you have a decent sense of humor, or need a good laugh…..click here)  Funny as the clip may seem, it’s eerily close to how mis-informed the general public can be about the bankruptcy process. While it never hurts to get advice from friends, sometimes following that advise can prove detrimental. Want to know what really happens when you declare bankruptcy? Read on!

How do you declare bankruptcy?

Step One: Find a Licensed Insolvency Trustee

In Canada, a Licensed Insolvency Trustee (LIT) is the only professional who can complete a bankruptcy filing for you. In addition to their expertise, LIT’s possess the proper software to prepare and file your documents, the proper bank account system to handle trust assets, and are licensed and monitored by the government with respect to their duties, to ensure fairness in the process.

Not sure where to find an LIT? Our office is licensed to help people living in both Manitoba and Northwest Territories, but if you are looking for help outside of those areas, check out the government listing of LIT’s.

Step Two: Ask for a free consultation

Most LITs will offer you a free consultation, but be sure to ask if there is a cost when booking your appointment. Our consultations are free, and easy to book. We offer appointments that fit your schedule. You can request an appointment online here. Please know that there is no obligation to you after having discussed your situation with us.

Step Three: Work with your LIT to prepare the appropriate documents, and file the bankruptcy

Your LIT knows what is required to ensure your file meets all government requirements and will require your assistance to gather information such as paystubs, list of debts, and a list of your assets. Not sure you can get all these things together? Ask your LIT to assist you – they may be able to pull your credit report, access online tax information or use other tools with your permission, to compile the necessary details.

Step Four: Complete your duties, as outlined by your Trustee and the Bankruptcy Act

While every file is slightly different, there are common duties that every person is required to complete while in a bankruptcy. No matter what takes place in your file, be sure that you keep in touch with your LIT.  Keep them advised if your situation changes (address or phone number changes, income changes, household changes, or other), and be sure to read and review any and all information they give you.

Want to know what a bankruptcy might look like for your situation? Contact us for your no-obligation consultation today.

Learn more about filing a bankruptcy in Manitoba.

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