Bankruptcy Counselling In Ontario: Should You Declare Bankruptcy?

Financial trouble is a prime cause of stress and anxiety. If you have unmanageable debt, it might be time for debt help. At the very least, you can gain some peace of mind with help from the experts.

When you meet with a Licensed Insolvency Trustee, one of the best tools they might utilize (among many debt relief solutions) is personal Bankruptcy. Let’s explore Bankruptcy counselling, that way you can prepare for this next stage in your debt journey (and see what alternatives to Bankruptcy you might want to consider).

What is Bankruptcy Counselling?

Bankruptcy counselling in Ontario involves meeting with a professional who can help control your financial situation. These professionals, called Licensed Insolvency Trustees (LITs), are licensed by the government to advise on your debt and navigate the Bankruptcy process.

Your LIT will review your income, expenses, and debts. They will also explain your options and help you decide whether Bankruptcy is the right choice. There are plenty of other ways to deal with your debt, and your Trustee will offer all possible solutions. If Bankruptcy is deemed the right move, they will guide you through the filing steps.

Why You Should Get Debt Counselling First

But before you opt for personal Bankruptcy, consider debt counselling. Bankruptcy is an aggressive option that can have some long-lasting consequences. A debt counsellor can help you create a plan (e.g. make a budget, advice on reducing expenses, etc) to get you back on track—without full insolvency.

A consultation with a Licensed Insolvency Trustee can also give you a clear picture of your options. This initial meeting is free and comes with no obligation. It is a chance for you to talk about your financial problems with a professional who can offer advice tailored to your situation.

What Happens if You Declare Bankruptcy?

If you choose Bankruptcy, your Licensed Insolvency Trustee will handle your case. They will work with your creditors (the people you owe money to) and oversee the process. For your part, you must attend insolvency counselling sessions to better manage your money and avoid future debt problems.

A Bankruptcy discharge is when you are officially released from your debts. However, not all debts are discharged in Bankruptcy. For example, you can’t discharge certain student loans, child support payments, and court fines.

What is the BIA Insolvency Counselling Program?

The Bankruptcy and Insolvency Act (BIA) governs Bankruptcy in Canada. In particular, it requires those who declare Bankruptcy to complete the BIA Insolvency Counselling Program. If you file for Bankruptcy, you must go to two mandatory sessions.

The first session usually takes place shortly after you file. It helps you understand why you ended up in financial trouble and gives you tools to manage your money better in the future. The second session is set for a later date and shows how you can rebuild your credit.

These counselling sessions are designed to help you avoid falling back into debt. They provide valuable advice on budgeting, saving, and making informed financial decisions.

Bankruptcy Alternatives

Bankruptcy isn’t your only option. Several debt relief alternatives might better fit your situation:

• Consumer Proposal: A Consumer Proposal is a formal agreement between you and your creditors to pay back a portion of your debt over time. It’s a good option if you want to avoid Bankruptcy but still manage your debt. A Licensed Insolvency Trustee can help you set up a Consumer Proposal in Ontario.
• Debt consolidation: Debt consolidation involves combining all your debts into a single loan with one monthly payment. That can make it easier to manage your debt and reduce the amount of interest you pay.
• Debt settlement: Debt settlement is when you negotiate with your creditors to pay a lump sum for less than the total amount you owe. This can reduce your debt, but it may affect your credit score.
• Credit counselling: Credit counselling involves working with a counsellor who can help you create a plan to pay off your debts over time. They can also offer advice on budgeting and managing your money.
• Government debt relief programs: The government offers programs for those in debt, such as interest relief or payment deferrals. These programs vary depending on your situation, so see whether you qualify.

What is the Role of the Office of the Superintendent of Bankruptcy (OSB)?

The Office of the Superintendent of Bankruptcy (OSB) is a federal agency that oversees the Bankruptcy process in Canada. They ensure that the process is fair for both debtors and creditors. The OSB also licences and regulates Licensed Insolvency Trustees so that they follow the rules and provide the necessary services.

If you are considering Bankruptcy or a Consumer Proposal, the OSB provides information and resources to help you make informed decisions. They also ensure that your rights are protected throughout the process.

What About Your Creditors?

If you file for Bankruptcy or a Consumer Proposal, your creditors will be notified. In a Consumer Proposal, creditors vote on whether they accept the proposal. If the majority agrees, the proposal becomes a legally binding agreement.

In Bankruptcy, creditors cannot take legal action against you once you’ve filed. However, they can object to your Bankruptcy discharge if they believe you’ve been dishonest or haven’t followed the rules.

Take Control of Your Finances with Debt Counselling

Deciding whether to declare Bankruptcy is a tough decision, but you don’t have to make it alone. Bankruptcy counselling in Ontario can provide you with the information and support you need to make the right choice.

A free consultation with a Licensed Insolvency Trustee is also a good first step. They can help you explore your options and find the best solution to your debt problems. Remember, Bankruptcy is just one option, and there are other ways to get your finances back on track without the long-term consequences of filing for Bankruptcy.

Take the first step today by reaching out for help. Whether you’re considering a Consumer Proposal, debt consolidation, or another solution, getting professional advice can help you make an informed decision and take control of your financial future.

At Adamson & Associates Inc., we’ve earned a trusted reputation as a licensed Ontario Insolvency Trustee and Consumer Proposal Administrator. Our priority is delivering you top-tier professional insolvency services. We recognize that Bankruptcy can be overwhelming and stressful, so we are committed to guiding you through each step, offering clear information to help ease your concerns and uncertainties about the future.