- Bankruptcy can help you survive a financial crisis.canadian 20 image by dwags from Fotolia.com
Bankruptcy can be a frightening experience. You need to know what's going to happen to you if you need to take advantage of Ontario, Canada's Bankruptcy and Insolvency Act (BIA). - You find yourself headed for bankruptcy when you don't have the money to pay your monthly bills. Before filing for bankruptcy, you will want to meet with your creditors and try to arrange a payment schedule. Yet your creditors might not be willing to work with you or your bills simply might be too high. If that is the case, then you can use the provisions of the BIA to make your life livable again.The BIA is intended to permit debtors to make a fresh start by receiving a complete discharge of their debts, allow for a complete, orderly distribution of the debtor's assets, allow for a complete investigation of the debtor's situation and deal with any fraudulent activities found in the debtor's affairs.
- The BIA allows each province to deal with the exemption of some of the debtor's property. In Ontario, items under the value listed are excluded from seizure:
* Clothing and personal effects - $5,650
* Furniture and household goods - $11,300
* Tools of the trade - $11,300
* A motor vehicle - $5,650
* RRSPs, or Registered Retirement Savings Plans - might be subject to a clawback for some contributions made during the previous year
* Some insurance policy situations - You may keep your house if you're able to pay the equity in your house to the trustee and your bank agrees. Declaring bankruptcy gives the bank the right to ask for an immediate payment of the entire mortgage. A similar demand may occur with your car. You may have to pay the trustee the amount of the value of the car that is clear or surrender the car.
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