Personal Bankruptcy in Ontario

What is bankruptcy?

Bankruptcy is a legal process that provides immediate financial relief and enables an individual burdened with debt to make a fresh start. Bankruptcy typically releases an individual from most, if not all, of their debts. The procedure is called “Filing an Assignment”.

Who can file a bankruptcy?

In order to file an assignment in bankruptcy you must meet certain criteria, i.e.:

  • Owe at least $1, 000.00;
  • Be unable to pay your bills as they become due;
  • Your debts exceed the value of your assets; and
  • You are not already bankrupt.

What happens to my assets?

A common concern for those faced with filing personal bankruptcy in Ontario is the fear of losing all their assets. Certain assets you own are considered exempt from seizure under provincial law. For example, when declaring personal bankruptcy Ontario residents can retain the following:

  • Personal effects up to a value of $5,650
  • Household furniture up to a value of $11,300
  • Motor vehicle up to a value of $5,650
  • Tools of trade up to a value of $11,300
  • Most pension plans, life insurance policies and certain RRSPs
  • There are also special exemptions for farmers

Contact the offices of Paddon + Yorke Inc. for further information.

What debts are not included in a bankruptcy?

As previously stated, filing for personal bankruptcy in Ontario will relieve you from most, if not all of your debts except those under Section 178 of the Bankruptcy and Insolvency Act as follows:

  • Fines or penalties imposed by a court;
  • Award of damages by a court with respect to intentional bodily harm, sexual assault or wrongful death;
  • Alimony, child support or maintenance payments;
  • Debts arising from illegal activity such as fraud, embezzlement or misappropriation;
  • Debts incurred by fraudulent misrepresentation or false pretenses;
  • Dividend for creditors not disclosed to the trustee, and
  • Student loan debts less than 7 years old.

Duties imposed upon the bankrupt

When an individual files An Assignment in Bankruptcy, they are required to perform the following duties under section 158 of the Bankruptcy and Insolvency Act as follows:

  • Provide to the trustee a complete statement of assets and liabilities including creditors names, addresses, account numbers, statements or invoices and amounts;
  • Advise the trustee of the details of all assets disposed of during the twelve months preceding the bankruptcy;
  • Advise the trustee of the details of all assets disposed of as gifts during the five years preceding the bankruptcy;
  • Disclose and turn over to the trustee, as required, all assets in your possession or control;
  • Make available to the trustee all books and records relating to your assets or affairs;
  • Deliver to the trustee for cancellation, all credit cards in your control;
  • Meet with the Official Receiver, to be examined under oath as to the facts relating to the bankruptcy; if and when requested;
  • Attend the first meeting of creditors and any other meetings if called upon by the trustee;
  • Notify the trustee of any material change in your financial situation;
  • Notify the trustee of any change in your place of residence until discharged.

The trustee will explain all of these duties at your initial assessment.

  • Thank you most sincerely for your kindness, gentleness and sensitivity in helping me through this most painful and distasteful episode. I respect and admire your compassionate professionalism and appreciate your helping me “keep my dignity.” — Heather