Declaring bankruptcy is usually a life-altering decision. Considering it should not be taken lightly. The challenges arise though when trying to find correct and current information about the process. Due to the massive amounts of misinformation out there, discussing bankruptcy with a Licensed Insolvency Trustee (LIT) is an important first step. This guide will help you learn about the bankruptcy process, including how long it will last.

WHAT IS BANKRUPTCY
Filing for bankruptcy is a legal procedure where your equity in non-exempt property is surrendered to a Licensed Insolvency Trustee. The laws surrounding personal bankruptcy are designed to allow an honest, but unfortunate debtor the opportunity to reboot their financial situation.

HOW TO FILE BANKRUPTCY
There are several steps involved in filing for bankruptcy, they’re pretty simple, but are time-consuming. Recognizing your financial problems and knowing you need help can be the most difficult part of the process:

1. CHOOSE A LICENSED INSOLVENCY TRUSTEE
LIT’s are the only professionals licensed by the Canadian Superintendent of Bankruptcy, to administer bankruptcies and consumer proposals. Your trustee will give you information on both options to ensure you make the choice that’s best for your situation.

Filing for bankruptcy can be an emotional or sensitive time for many people. You should find a trustee you’re comfortable with, so you can speak openly about your finances and goals.

2. START THE PPROCESS
Once you and your trustee have decided on bankruptcy, there will be information that your LIT will collect from you. This includes:
– Personal information such as address, birth date, etc.
– A complete list of your creditors.
– A complete list of your assets.

As part of the process, you will sign the necessary documents and your LIT will likely discuss the next steps with you. This often includes going over your obligations during bankruptcy (discussed below)

3. THE STAY OF PROCEEDINGS
When your bankruptcy is filed the LIT sends a copy to your creditors. A “stay of proceedings” starts almost immediately. This means unsecured creditors will not be able to begin or continue lawsuits, garnish wages, or even contact you at all.

4. KEEPING UP WITH YOUR OBLIGATIONS
There are obligations that every person must do while in bankruptcy. This may include:
– Surrendering your equity in non-exempt assets to the trustee.
– Credit cards must also be surrendered.
– Attending at least one credit counselling session within 90 days of filing.
– Providing monthly income statements.
– Making payments on a monthly basis.

5. DISCHARGING BANKRUPTCY
The final step during the bankruptcy process is the discharge. This is when your debts will be officially released. Your LIT will be able to provide you with strategies to get your credit back on track, as well as manage your money.

HOW LONG DOES IT TAKE?
There are two “ends” to the bankruptcy process you can look forward to. The first is after nine months. Being discharged (discussed above) usually happens in nine months. That means (most people) will have their debts released and are able to start fresh in less than a year. If you have filed for bankruptcy before, or if your income is above a certain threshold, your bankruptcy term can be longer. Your LIT will fully explain your particular situation.

While your debts are cleared, your credit report will contain a note about your bankruptcy for usually six years after the discharge.

As you know a Licensed Insolvency Trustee is the only professional who can work with you through this process. Windsor residents have had a lot of success with Andrea Orr, an LIT who’s also a Certified Professional Accountant and member of the Canadian Association of Insolvency and Restructuring Professionals (CAIRP)