Do I have to pay a minimum portion of the debt I owe?

No. In a bankruptcy, you only have to turn over your surplus income as set out in the income standard. Proposals are simply an alternative to paying your creditors under the terms you initially negotiated with them. A proposal could provide for the full payment of your debts over a three to five year period, or a proposal could provide for the payment of a specified amount of money such as $100 per month. The amount is accumulated by the Trustee and distributed to your creditors usually every six months.

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Do I get to keep my assets such as a car, boat, or snow machine during a proposal?

Yes, if the terms of the proposal provide that you can deal with those creditors that hold security (or have taken collateral) against such assets as your car, etc... then you can keep those assets and continue paying the security holder.

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Do I lose my furniture if I go bankrupt? 

Not necessarily. If you have not pledged or given your furniture as collateral to any creditors, you are able to claim an exemption (or you are allowed to keep) up to $10,000.00 (of the resale value of the furniture). If you have given your furniture as collateral, you may want to negotiate a monthly settlement for its value with the security holder.

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What assets will I lose if I go bankrupt?

You lose whatever interest you may have in assets except furniture, personal effects, and tools of trade. These exceptions apply if you have not previously pledged or given those assets as collateral to various creditors. However, there are many situations where you may be able to keep vehicles, a house and other assets if the creditors agree. You should discuss these matters with the Trustee.

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When can I purchase a car or acquire other assets such as a boat, home, etc..?

Before your discharge is granted, you may lease or purchase assets from the exempt portion of your monthly income. This could include the purchase of cars, boats, RRSP's, etc...

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What happens to our income tax returns and GST funds?

Any refunds that you may have from previous years will become an estate asset available to all your creditors. The tax return for the year in which you become bankrupt is also an estate asset. This includes the period from January of this year until the date of bankruptcy (pre-bankruptcy return). A second tax return will have to be completed for the period from the date of bankruptcy to December 31 (post-bankruptcy return). Any refund can be voluntarily assigned to the Trustee for the benefit of the creditors, whether you are discharged or not.

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Do I have to make payments to any creditors during my bankruptcy?

The Courts and the Superintendent of Bankruptcy make use of an Income Standard that determines if you have a surplus income that should be paid into your estate. This Standard assesses your net family income, and sets the amount (if any) that you may have to pay into the estate. As the Standard changes yearly, the Trustee will assist you in determining what amount (if any) you will have to pay.

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Is my spouse responsible to pay any loan that he/she might have co-signed for?

Yes. Bankruptcy does not eliminate the debt; only the obligations of the bankrupt. Any other party that is not bankrupt is responsible for paying the loan. As a result, it may be necessary for your spouse to consider other options.

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Do I have to go to Court?

What most people relate to as the Court Hearing is in fact the creditor meeting. Due to recent changes in legislation it is extremely unlikely that you will be required to meet with your creditors. However, if a creditor opposes your discharge, or if you were bankrupt previously, you will likely have to attend before the Bankruptcy Court in your locality at the time of discharge.

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How do I pay the Trustee's fees?

The Trustee is generally the first one to be paid out of the bankruptcy estate. Your estate is created from proceeds of tax returns, the sale of assets, payments to estate, etc... The fees are set by the Court and the Trustee must present his/her account to be approved by the Court. In certain cases, a monthly payment may be negotiated.

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