Can I Declare Bankruptcy Without Any Assets?
Yes, as long as you qualify for bankruptcy in Ontario, you can have a bankruptcy trustee file (declare) bankruptcy on your behalf, even if you have no assets.
In Ontario, only licensed trustees in bankruptcy, such as David Sklar & Associates, can file and administer bankruptcies.
In a bankruptcy, when there are no assets or equity to divide among the unsecured creditors, they are still required to write off all of your outstanding debt upon the successful completion of your bankruptcy.
In Canada, the laws that govern bankruptcy are meant to be fair to everyone involved, the debtor and their unsecured creditors.
If you have assets, the federal and Ontario governments have identified a number of assets that cannot be seized in a bankruptcy. Visit “What Can I Keep if I Declare Bankruptcy in Ontario” for more details.
An important factor in your bankruptcy, is the amount of surplus income you have. Check out ‘Surplus Income in the Bankruptcy Process’ for more details.
Basically, your total family income, less allowable deductions such as medication and child support, is compared to the number of people in your family . Then, based on guidelines set by the Superintendent of Bankruptcy – it is determined whether or not you have surplus income.
Your trustee will explain this to you in detail.
If it is decided that surplus income exists, then you will be required to pay 50% of the surplus into your estate for distribution to your unsecured creditors.
As well, if you have surplus income and this is your first bankruptcy, the length of your bankruptcy will go from 9 months to 21 months.
Release From Unsecured Debts at End of Bankruptcy
At the end of your bankruptcy period, if you have honoured all the terms of your bankruptcy, such as filing monthly reports, attending credit counselling sessions and making your required monthly payments – you will be released from the unsecured debts included in your bankruptcy.
Note – not all unsecured debts can be included in a bankruptcy, things like child support, alimony, court fines, and some student loans cannot be erased by bankruptcy.
Once again, your trustee will explain this to you in detail.
Considering Bankruptcy in Toronto?
If you live in the Toronto area, and are considering bankruptcy, you are welcome to call us at 416-498-9200 to book a free consultation. Our caring professionals will review your finances in detail and discuss all of your options for getting out of debt.