How to File Bankruptcy: A Step-by-Step Guide
To file for bankruptcy, you will need all the information about your financial situation: credit card statements, bank statements, mortgage records, loan documents. Meet with a Licensed Insolvency Trustee and follow our step-by-step guide to eliminate your debt. Bankruptcy will provide you protection from creditors and a fresh start with your finances.
Step 1: Contact a Licensed Insolvency Trustee (LIT)
First you need to seek advice from a professional authorized to administer government-regulated insolvency proceedings. Only a Licensed Insolvency Trustee (LIT) can stop ongoing and pending legal and collection action, including lawsuits and garnishees. Bankruptcy is just one possible debt solution. An LIT will explain the merits and outcomes of various options available to you. Contact your local MNP LIT for a free consultation to discuss the appropriate life-changing debt solution for your unique situation. Start with a free consultation with one of our Licensed Local Insolvency Trustees.
Step 2: File the Paperwork
Your Licensed Insolvency Trustee (LIT) will help file the required forms to declare bankruptcy. Documents you will have to provide may include tax returns, proof of income and expenses of you and your family, and proof of any assets owned by you. Your LIT will register your bankruptcy with the Office of the Superintendent of Bankruptcy, a branch of the federal government that supervises this formal process.
Step 3: Bankruptcy Commitments
As you work through the bankruptcy process, you will be required to complete certain duties. Your local MNP Licensed Insolvency Trustee (LIT) will help you build better financial habits through budgeting and money management counselling. You will be required to cooperate with the LIT during the bankruptcy process. You must file monthly reports on your income and expenses and may be required to pay for equity in assets, surplus income and for administrative costs. Your LIT will file your personal income tax return for the year of bankruptcy.
Step 4: The Process Finishes
The final step in bankruptcy is the discharge. Upon completion of your duties you will be eligible for discharge in nine months or longer, depending on your situation. This means that you will be released from the obligation to pay the debts you had when you filed bankruptcy. If your duties are not completed, a court order will outline the remaining steps you need to finish to be released from bankruptcy.
Step 5: Moving On
With your debt burden relieved you can now work on re-building your credit score; in fact, this will be an important topic of conversation during your mandatory counselling sessions with your Licensed Insolvency Trustee.
Becoming Debt-free with Bankruptcy
Declaring bankruptcy is usually a last resort, but it may be the right debt solution for you to get the relief from your debt burden and to help you start living your life again. If you want to learn more about the bankruptcy process—or about the alternative debt solutions available to you—simply contact your local MNP Licensed Insolvency Trustee to book a free consultation.