Filing for Bankruptcy in Toronto
Bankruptcy is one way of dealing with debts you cannot pay. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order. However, there is the possibility that in some cases the bankruptcy discharge period in Toronto and Ontario will be less than one year. Although bankruptcy has a bad stigma and is publicly advertised, it cannot be neglected when dealing with individual insolvency cases.
Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves.
Bankruptcy in Canada is set out by federal law, in the Bankruptcy and Insolvency Act and is applicable to businesses and individuals. The Superintendent of Bankruptcy is a federal agency, responsible for ensuring that bankruptcies are administered in a fair and orderly manner. The Act is modified by each province’s statutory amendments. A person in Toronto, Ontario can file a consumer proposal as an alternative to bankruptcy. It is a negotiated settlement between a debtor and their creditors. A consumer proposal can only be made by a debtor with debts in excess of $5,000 to a maximum of $75,000 (not including the mortgage on their principal residence). If the debts are higher, the proposal must be filed under Division 1 of Part III of the Bankruptcy and Insolvency Act. In this case, the assistance of a Proposal Administrator is required, who is generally a licensed trustee in bankruptcy.
In 2006, there were 98,450 personal insolvency filings in Canada: 79,218 bankruptcies and 19,232 consumer proposals. Out of the total number of insolvencies 12,345 were filed in Toronto alone.
Unlike in the US, bankruptcy trustees in Toronto, as well as all over Canada do not represent the legal side of the affair, but rather settle the accounting side of it. The trustee can give a debtor information and advice about both the proposal and bankruptcy processes and make sure that both the debtor's rights and the creditor's rights are respected. The role of the trustee in bankruptcy to insure all creditors are treated fairly and that any non-exempt assets are sold for the most money, which is then distributed to the creditors in accordance with their claims. Basic duties of trusties are to: Review the file for any fraudulent preferences or reviewable transactions; Object to the bankrupt's discharge; Chair meetings of creditors; Sell any non-exempt assets; Distribute funds to creditors.
There are no state agencies involved in a bankruptcy proceeding in Toronto as all matters are handled through the Canadian and Ontario bankruptcy courts. They will also participate in creditor meetings and has the power to discharge of debt if evidence of fraud or ineligibility is found with the creditor. Additionally, any actions required by new bankruptcy laws concerning money management and budget planning will also be reviewed by the trustee to insure the client is meeting all requirements. Typically, bankruptcy attorneys work with the same trustees on numerous cases and know how the paperwork needs to be filed to meet specific trustees’ concerns. Any concerns with how the trustee handles a case should be left up to the attorney to get answered.
In Toronto and Ontario, the trustee’s role in bankruptcy filing process differs with the type of bankruptcy filed. Whether Chapter 7, Chapter 13 or a Chapter 11 for businesses, his roles to determine the true value of any assets claimed and to protect the creditors from fraudulent claims, insuring they get a fair value of any assets. The trustee will accept payments from the client and distribute them to the creditors according to the plan approved by the court.
Information provided by Geary and Company, Toronto bankruptcy trustees and bankruptcy filing company in Toronto, Ontario. We are located at 1240 Bay, Toronto, Ontario and are providing free consultations at 416-927-7200
