There is a general lack of knowledge about what a bankruptcy proceeding is like in Canada, and that might not be all that bad. The less need there is to file for bankruptcy, the better. However, the fact of the matter is that a very large percentage of Canadians are in debt, and some so much so that filing for bankruptcy should be their best option. So, a knowledge of the process can only help.
A tough decision
First, there is the decision to file for bankruptcy, which is never easy. This is where consultation with a good bankruptcy lawyer or advisor can help. But, once the decision to file for bankruptcy is made, the process in Canada is in fact a very structured one, and it very much begins, and even ends, with what’s known as a trustee in bankruptcy.
In Canada, it is legally mandatory to obtain the services of a trustee in order to file for bankruptcy. A trustee in bankruptcy needs to be licensed. A registry of licensed trustees can be accessed from the Office of the Superintendent of Bankruptcy Canada (OSB). Sometimes it can be difficult for a debtor to afford a trustee or obtain his or her services. The OSB has a process in place to deal with such circumstances.
A trustee’s duties
Once a trustee is found, he or she will sit down with the debtor and determine the best solution to deal with the debtor’s creditors, whom the trustee deals with directly. The trustee in bankruptcy will seize control of the debtor’s assets, sell them, and then hold the proceeds in trust. The money will then be distributed to the creditors.
During the process, the trustee in bankruptcy can also act as a debt consultant to help the debtor not only deal with the current bankruptcy but also deal with ongoing debt problems. During the bankruptcy process, a debtor might have to undergo a more formal investigation under oath, and is also required to attend two sessions for financial counselling.
If you need a professional advice on family law, or if you’re thinking of divorce, please phone us here at Hosseini Law Firm (HLF) for a 15 minute free consultation: 416-628-4635, or please use the contact form provided on this page. Thank you.