Bankruptcy is a legal process in Nova Scotia and New Brunswick and throughout Canada under the Bankruptcy and Insolvency Act which permits insolvent debtors to make a voluntary assignment into bankruptcy to be released from their debts.
As the debtor, you meet with a licensed Trustee in Bankruptcy who reviews your financial affairs to determine if you are eligible to make an assignment in bankruptcy and to determine if there are other alternatives which may be available to you.
In order to declare bankruptcy you must be insolvent, which means that you:
In order to file an assignment in bankruptcy you will need to provide information to the Trustee to prepare a statement of assets, liabilities, income and expenses and other pertinent information. When you are ready to file for personal bankruptcy, the Trustee files the necessary documents with the Official Receiver and notifies creditors.
The date in which the bankruptcy is filed in Nova Scotia and New Brunswick starts immediate protection from collection or legal action by unsecured creditors, including the Canada Revenue Agency for income tax and HST/GST debt.
The Bankruptcy and Insolvency Act does not stop secured creditors from repossessing assets provided they have a valid lien against the assets. Secured creditors are not permitted however to repossess assets just because you file for bankruptcy. The filing of an assignment in Nova Scotia and New Brunswick bankruptcy does not release any co-signers.
The discharge from bankruptcy legally releases you from any further legal responsibility regarding your debts. To be discharged from bankruptcy, you are required to perform certain duties that include attendance of two financial counselling sessions, the completion and filing of monthly income and expenses statements throughout the period of bankruptcy, make your monthly payments to your Trustee and provide your Trustee with income tax information.
A first-time bankrupt is usually released or “discharged” from bankruptcy after nine months. The length of a bankruptcy depends in part on whether your household income exceeds the guidelines set by the Office of the Superintendent of Bankruptcy and based on the number of members in your household, which is defined as surplus income in the Bankruptcy and Insolvency Act. If you have surplus income, the length of bankruptcy is usually twenty-one months.
A second and third bankruptcy has a longer duration and is again subject to household income guidelines and surplus income. For example, a second-time bankrupt typically has a bankruptcy length of twenty-four months if there is no surplus income and thirty-six months if there is surplus income.
A WBLI Trustee will help you in advance of declaring bankruptcy by providing an estimate of the bankruptcy duration and its cost prior to filing and if there are any other alternatives available to you. To do so, the WBLI Trustee will review your net monthly household income and calculate your surplus income to determine if your net monthly income is greater or less than the guidelines set out by the Office of the Superintendent of Bankruptcy
Contact WBLI Insolvency Consultants Inc. today for your free, no obligation consultation. We can review your personal financial situation and provide information about a personal bankruptcy in Nova Scotia. There is no pressure to take a particular course of action; we view filing for bankruptcy as a personal decision. We can help you assess whether a personal bankruptcy or a consumer proposal debt restructuring plan is better for your situation.
WBLI has 17 offices for a personal bankruptcy or consumer proposal across Nova Scotia and New Brunswick. We will also come to you.