1. What is Bankruptcy?

Bankruptcy is a legal method of eliminating debt and providing a means for debt-oppressed people to obtain a "fresh start." In many cases, bankruptcy means the elimination of the debt that you owe to your creditors.

2. Who is a Trustee in Bankruptcy?
A Trustee is an individual or a corporation licensed by the government to conduct the bankruptcy process. A Trustee is not a lawyer. You can ask for advice about certain bankruptcy matters but you are not a "client" of the Trustee. A Trustee is paid by the bankrupt and from the assets of the estate. If there are no available assets, the Trustee looks to the bankrupt for payment of fees and costs. An estimate of fees and costs can be given only after reviewing your file. The Bankruptcy and Insolvency Act sets out the Trustee's fees for both a summary administration and a consumer proposal. A Trustee cannot be discharged without approval from the Court or the Official Receiver, who reviews the statement of receipts and disbursements, including the Trustee's fees and costs.

3. Do I have certain duties as a bankrupt?
The bankrupt's duties are listed in Section 158 of the Bankruptcy and Insolvency Act. Read the section carefully and comply with its requirements. You must confirm in writing that you clearly understand your duties as a bankrupt

4. What happens to my wages during bankruptcy?
Wage assignments and garnishments are stopped once bankruptcy is declared.
The Trustee reviews the amount of your wages and your living expenses. Your income is then compared to guidelines set out annually by the Superintendent of Bankruptcy. These guidelines take into account the amount of household income and the number of dependents. A copy of the guidelines is available from the Trustee. The Trustee will also supply a monthly income and expense statement form for you to fill out and submit. If you have surplus household income, a portion may have to be paid to your creditors through the Trustee.

5. What happens at the first meeting of creditors?
A meeting of creditors may be called if requested by your creditors.
The purpose of this meeting is to:

• confirm the appointment of the Trustee
• appoint up to five inspectors who supervise the administration of the bankrupt estate, including approval of the Trustee's statement of receipts and disbursements
• allow creditors to obtain information about the bankruptcy
• allow creditors to give directions to the Trustee

6. When will I get my Discharge from Bankruptcy?
A first-time bankrupt is automatically granted a discharge nine months after filing bankruptcy unless a creditor, the Trustee, or the Official Receiver objects. If you are granted an automatic discharge, there is no court hearing and the Trustee sends you a copy of the discharge.

If this is not your first bankruptcy or if your discharge is opposed, the Trustee sends a discharge application to the Court. You will be advised by the Trustee if you are required to appear in Court for the discharge hearing. At the hearing, the Trustee's report informs the Court of the circumstances surrounding your bankruptcy. The Court will choose one of the following discharge alternatives:

7. Which of my debts are not discharged by bankruptcy?

• student loans, if it is less than two years since your schooling finished
• fine or penalty imposed by the Court
• alimony
• liability for dividend to an undisclosed creditor
• debt obtained by fraud
• liability for support or maintenance of spouse or child under an agreement or Court Order

8. What about my credit rating?
Usually, once your level of debt becomes so great that bankruptcy is required, your credit rating is poor in any event. Your ability to obtain and use credit after discharge depends on convincing lenders of your personal financial maturity. Your credit rating can only improve after bankruptcy. Send a copy of the Discharge Order to the Credit Bureau so that your credit record can be updated. All documents relating to your bankruptcy should be saved for reference by future lenders.

9. Are my spouse's assets included in my bankruptcy?
No. Only assets owned by the bankrupt are included in the bankruptcy. If assets are jointly owned with a spouse, then the bankrupt's portion may have to be sold and distributed to the creditors. It is important to make the Trustee aware of joint assets so that each case can be reviewed individually.

10. Do I require a lawyer?
Generally, you do not require a lawyer to go bankrupt. If you feel the need for legal advice and cannot afford a lawyer, legal aid is available. We suggest you start by educating yourself about the Bankruptcy Process. This can save you hundreds if not thousands of dollars in unnecessary legal fees.