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How to declare bankruptcy in Montreal

Declaring bankruptcy has a negative connotation as a societal concept but in some cases, it can be the most logical way forward to getting out of debt and reestablishing your financial health. Declaring bankruptcy is one of the more effective remedial measures you can personally take (among others such as debt consolidation) to remove the worst possible debt accumulation problems. 

Bankruptcy is generally divided into voluntary and involuntary, the former being when you declare yourself bankrupt and give a trustee control over many of your assets and the latter being when you are forcibly declared so by the bank or other creditors. Once the bankruptcy process is over in a few months you will have been able to detach yourself from a considerable chunk of your debt amount.

In most cases, you will need to consult/hire an Insolvency Trustee licensed to practice in Montreal. The next few steps of declaring bankruptcy is as follows:-

A Preliminary Meeting

Meeting with a trustee will ensure that you are taking the right step for yourself. These bankruptcy trustees are trained to evaluate financial statements and to ascertain how best you can climb out of debt and severe financial strain. 

The Paperwork

The trustee will after careful analysis prepare a balance sheet of all your transactions and financial decisions. You will then be given a form to fill out and sign that will transfer control of your remaining assets (that haven’t already been liquidated) to the trustee’s control. You will also need to provide copies of documents relating to your assets and bank information and so forth so that it is easier for the trustee to complete the task of filling out all the forms and registering them with an Official Receiver. After the filing of these necessary documents is complete, you will no longer suffer harassment at the hands of any creditors. 

Asset Disposal And Management 

The trustee will decide which of your assets to sell so that your debts (at least partially) can be dealt with. Do note that all assets cannot be subjected to sale due to legal implications and allowances. Assets you will be able to keep after filing for bankruptcy are the following:-

  • Personal and family belongings not exceeding the value of $7k.
  • Daily or professional life equipment needed for livelihood or functioning such as a laptop or a tractor. 
  • The value of your insurance life policy (this only applies if you have a close relative or spouse named as the beneficiary.) 
  • A portion of your current salary if you are not already unemployed. 
  • You may be able to keep your house only if it has low or nonexistent equity on it. 
  • Your RRIF/RRSP contributions remove those that were paid recently. 

At the end of this process, notes/letters will be sent to all your creditors to inform them of your new legal state. There may be a creditors’ meeting your attendance will be mandatory for and you will certainly be asked to appear for an interview at the office of the Superintendent for Insolvency or Bankruptcy. Furthermore, an optional meeting may also be set up with a Restructuring Advisor who will brush you up on improved practices of budgeting and financial management in the aftermath of bankruptcy in Montreal. Lastly, your debts will be cleared in what is known as a ‘discharge from bankruptcy and this takes 9-21 months for an automated discharge but a court hearing may get you one sooner. 

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