Step-by-Step Guide to File for Bankruptcy
If your debt has become unmanageable, you need a solution. Personal bankruptcy is one way to get debt relief. But how do you know if you are eligible to file for bankruptcy, and what steps do you need to take to file for bankruptcy in BC? Vancouver bankruptcy consultants at Crowe MacKay & Company prepared this step-by-step guide to file for bankruptcy with the help of a Licensed Insolvency Trustee.
Vancouver Bankruptcy: Am I Eligible for This Debt Relief Option?
Personal bankruptcy may be the right solution for you – it can eliminate your debt, provide you protection from creditors, and give you a fresh financial start. To be eligible to file for bankruptcy, you must be insolvent. Here are the three criteria (also known as the “solvency test”) to consider in determining if you qualify for bankruptcy:
- Do you owe your creditors at least $1,000?
- Do you have debts greater than the sale value of your assets?
- Are you unable to pay your debts when they are due?
If you meet all three criteria, you are eligible to file for bankruptcy. However, it is one thing to be eligible for bankruptcy – the question of whether you should file for bankruptcy given your unique financial situation and personal needs is a separate issue. To make that determination, you should seek advice from an experienced Vancouver bankruptcy consultant.
How to File for Bankruptcy: A Step-By-Step Guide
The decision to declare bankruptcy can be a difficult one to make, but once the decision is made, the process of filing for bankruptcy is actually quite simple. Here is a step-by-step guide to filing for bankruptcy:
Look at Your Financial Situation and Decide If You Need Help With Your Debt.
There are some tell-tale signs of financial trouble. Are you missing monthly mortgage or loan payments? Is your credit card always maxed? Are you taking cash advances or making only the minimum credit card payment because you can’t afford more? Have collection agencies started calling, or have you received notice of legal action to collect debts against you? If any of these apply, or you feel like you can’t get out from under your debt without assistance, you would benefit from the advice of a debt expert (known as a Licensed Insolvency Trustee or “LIT”).
Reach Out to a Licensed Insolvency Trustee.
There are two primary reasons to reach out to a Licensed Insolvency Trustee to discuss your finances and debt:
• The first reason is that a Licensed Insolvency Trustee can evaluate your financial situation, explain all of the debt relief solutions (e.g., debt consolidation, consumer proposal, bankruptcy), and help you decide which alternative is the best for you.
• The second reason is that if you decide to file for personal bankruptcy, you must work with a Licensed Insolvency Trustee. LITs are the only professionals licensed by the Canadian Superintendent of Bankruptcy to administer consumer proposals and bankruptcies (in fact, Licensed Insolvency Trustees used to be called trustees in bankruptcy or bankruptcy trustees). Vancouver’s Crowe MacKay & Company offers a free initial consultation, so you have nothing to lose by reaching out.
Gather Financial Information and Documents.
When you reach out to the bankruptcy consultant, he or she will explain the information and documents that will be needed to get the full picture of your financial situation. For example, before your first meeting with the Trustee, you will likely need to gather documents that relate to your income (e.g. recent pay stubs, tax returns), your debt (e.g., credit card statements, bank statements, mortgage statements, loan documents), your assets and property, and your monthly expenses.
Meet with the Licensed Insolvency Trustee.
At the first meeting, the Trustee will review the details of your financial situation and explain the options that are available to you. Crowe MacKay & Company has a team of skilled Licensed Insolvency Trustees, ready to counsel you on your options and answer your questions. It is important to note that a Vancouver bankruptcy consultant will explain the options and the pros and cons of each alternative, but ultimately, decisions on how and when to proceed are yours to make, based on the information and advice you receive.
File the Bankruptcy Paperwork.
If bankruptcy is the right debt solution for you, the next step is to file for bankruptcy. Your Licensed Insolvency Trustee will prepare the paperwork and review it with you, then submit the forms on your behalf to the Office of the Superintendent of Bankruptcy and to your creditors. From that point on, creditors must immediately stop any collection efforts against you and the Trustee will deal with your unsecured creditors on your behalf.
Now that you know the steps in filing for bankruptcy, you are likely wondering what happens after you have filed for bankruptcy. See here for a discussion of what to expect during bankruptcy from our team of Vancouver bankruptcy trustees, or contact us at 604-689-3928 for more information.
Looking for a Bankruptcy Consultant in Vancouver?
If you are struggling with debt and considering filing for bankruptcy, Vancouver consultants at Crowe MacKay & Company are here to help you. Our Licensed Insolvency Trustees can evaluate your current financial situation, suggest solutions to deal with your debt, and guide you through the process for the option that is right for you. Vancouver, Burnaby, and Surrey office appointments are available, as are virtual appointments. Get started by filling out our Debtor Application Form or by calling us today to schedule your free initial appointment with one of our Vancouver bankruptcy consultants.