If you are considering filing for bankruptcy in Alberta, Nunavut or Northwest Territories, you must first
qualify. To qualify, you must:
- Owe at least $1,000.00
- Be unable to meet required payments as they become due; or
- Own insufficient property to pay all your debts
The first step for filing for bankruptcy in Alberta, Nunavut, or NWT is choosing a Trustee. A Trustee is required to file a bankruptcy or proposal. For more information on Trustees, visit the Superintendent of Bankruptcy’s website or peruse our other helpful links.
Yes. Certain debts are not eliminated with your discharge from bankruptcy. For example:
- Fines or penalties imposed by the Court
- Alimony, maintenance, or support
- Debts obtained by fraud or misrepresentation
In most cases, declaring bankruptcy in Alberta, Nunavut, or Northwest Territories does not prevent a secured creditor such as a bank, credit union, or finance company from realizing on any assets which have been pledged as security for a loan.
House mortgages are unaffected if monthly payments are current. Vehicle or other chattel pledged to a financial institution is not affected if the payments are current as well. In most cases, an individual is able to maintain payments with a secured creditor.
Yes. Bankruptcy cannot be applied selectively. When claiming bankruptcy in Alberta, Nunavut, or Northwest Territories, you are required to list all debts, regardless of the source, even those owing to friends and relatives. Part of the legal process requires that you swear under oath that the information you provide is true and complete. If you intentionally fail to disclose debts, you will be liable for the dividend otherwise payable to that creditor.
If one feels a compulsion to pay back a friend or relative, or any other creditor, there are no restrictions on doing so after you have obtained your discharge. At that time, it is no longer a debt and any payment would be gratuitous.
Most people that we talk to about bankruptcy already have a poor credit rating. Many people are already registered at the Credit Bureau; unable to obtain a loan, or have had their credit cards suspended. Your credit rating can only improve following your discharge from bankruptcy.
Any individual who has found themselves filing for bankruptcy in Alberta, Nunavut, or Northwest Territories will normally be discharged 9 months after filing for bankruptcy for a first time bankrupt and 24 months after filing bankruptcy for a second time bankrupt, if the bankrupts income falls below the Superintendents’ Guidelines. The discharge will be automatic unless the bankrupt does not live up to his or her obligations or fails to perform the duties imposed upon him or her by the Bankruptcy & Insolvency Act or if a creditor objects to the discharge.
The bankrupt’s discharge can be denied for outstanding duties or a creditor can object to the bankrupt’s discharge, depending on the circumstances surrounding the origin of the debt. Third time or subsequent bankrupts are not eligible for an automatic discharge and the Trustee must apply to Court to obtain the bankrupt’s discharge.
Once you have made an Assignment in Bankruptcy, the Licensed Insolvency Trustee is required to notify all of your creditors. In addition, information regarding your bankruptcy will be kept on file by credit reporting agencies, Courts, Canada Revenue Agency, and the Superintendent of Bankruptcy. The Licensed Insolvency Trustee does not file any information with credit bureaus and will not respond to the Debtors’ requests to change information on their files.
A consumer proposal offers an alternative to bankruptcy. For example, you may ask your creditors to reduce the amounts owing to them or request more time to pay the amounts due.
A consumer proposal must be made to all preferred and unsecured creditors, but it does not affect the rights of secured creditors. The terms of the proposal must be completed within 5 years and must offer the creditors at least what they would be paid in a bankruptcy. Consumer proposals are aimed at those who do not have many debts or complicated financial affairs. Non-mortgaged debt must be below $250,000.00.
Once you file a consumer proposal, the Administrator will send a notice to all of your creditors affected by the proposal. If 25% of your creditors request a meeting of creditors and/or reject the proposal, a meeting will be held. If the meeting is held, your creditors will vote as to whether to accept your proposal. If no meeting is held, your proposal is automatically deemed accepted.