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Filing Bankruptcy in Vancouver

If you are dealing with a large amount of debt and having difficulty meeting your financial obligations, bankruptcy may be an option for you. Bankruptcy is a legal process that can provide relief to those who are unable to meet their financial commitments. The Bankruptcy and Insolvency Act provides bankruptcy protection to anyone who lives in Canada and who has a minimum amount of unsecured debt (usually $1,000 or more).

“Honest but unfortunate debtors” who require a way to eliminate their debts and who require legal protection from creditors may choose to file for bankruptcy. Bankruptcy is one of the potential options that is available. Meeting with a licensed trustee in bankruptcy can help you understand if this option is the right one for you. Only a licensed trustee can help you file for bankruptcy.

As Vancouver bankruptcy trustees, we are legally required to explain all debt relief options that are available to you. Different options work for different people. Every financial situation is unique and only by considering all available options can you choose the right one for you. In addition to bankruptcy, other options such as a consumer proposal may be possible.

Should I File for Bankruptcy?

When Should I file For BankruptcyThe decision to file for bankruptcy is a personal one. As mentioned, every financial situation is different and each person will need to make the decision for themselves. However, there are warning signs that can tell you that you may need to look into debt relief options.

These warning signs include:

  • You are only able to make the minimum payments on your credit cards
  • You need to use one credit card to pay another
  • You’re receiving calls from creditors
  • You’ve missed bill payments
  • You aren’t able to make rent or utility payments
  • Your debt is causing you significant stress

If any of these warning signs apply to you, you may want to consider professional financial help. Meeting with a Vancouver bankruptcy trustee for a consultation is free and it can help you understand the options available to you so that you can choose the right one for your situation.


How the Bankruptcy Process Works

If you are looking to file for bankruptcy in Vancouver or anywhere else in Canada, it’s important to understand how the process works. Your bankruptcy trustee will work with you to help you understand the process and answer any questions that you may have.

After your consultation, if you decide that bankruptcy is the right option for you, your trustee will work with you to ensure that all required forms are completed and filed properly.

Once you file, your debts are frozen and no additional interest is charged. You also receive legal protection from your creditors. They are not able to call, send collection agencies after you or start any legal action or wage garnishments. Any legal action or wage garnishments that have already been started will be stopped. In addition, all communication with your creditors will be done through your trustee.

While meetings of creditors are rarely called, you will be required to attend one if it is called.

During bankruptcy, you will be required to report your monthly income to your trustee. You may be required to make payments to the trustee who will distribute them to your creditors. This will depend on your particular financial situation.

You will also need to attend two financial counselling sessions. These sessions are designed to help you with budgeting and money management, assist you in rebuilding your financial life and avoiding problems in the future.

In most cases, you will be automatically discharged from bankruptcy nine months after filing, if it is your first bankruptcy and you fulfill all of the duties outlined to you by your trustee. You are then free to start rebuilding your financial life.

Your Assets in Bankruptcy

When you file for personal bankruptcy in Vancouver, you do not lose all of your assets. Under British Columbia law you are entitled to keep:

  • Equity in your home up to $12,000 in the Greater Vancouver area or Victoria. In the rest of BC, you are able to keep $9,000 in equity in your home.
  • A personal vehicle up to $5,000. This amount is reduced to $2,000 if you are behind on child care payments.
  • Household furniture and appliances up to $4,000.
  • Tools of the trade up to $10,000
  • An unlimited amount of clothing and medical aids.

You will also be able to keep RRSP contributions made more than 12 months ago. However, contributions made in the last 12 months are not exempt. This applies to all regions in Canada.

You will also be able to keep locked in pensions and life insurance, in most cases.

When you file for bankruptcy in Vancouver, your trustee will review your assets and ensure that you are able to keep all exempt assets.

Bankruptcy and Your Spouse

Many people wonder if their spouse will be affected if they file for bankruptcy. The general rule is that each person’s debts are their individual responsibility. Therefore, if your debts are yours and yours alone, your spouse will not be affected by your bankruptcy. However, if you share your debt with your spouse, both individuals are responsible for the debt. For example, if you have a joint credit card or have taken out a joint loan, one spouse will be responsible for 100% of the debt if the other spouse files for bankruptcy protection.

Speaking with a Vancouver bankruptcy trustee and outlining your financial situation can help you determine if filing for bankruptcy is the right option for you.