The law as it relates to what is bankruptcy in Toronto and the rest of Canada is complicated and varies substantially from province to province. While this site is designed to provide general information in a question and answer format we strongly urge you to contact us to discuss your unique situation.
Bankruptcy is a formal legal process, which allows insolvent people relief from their debts and the opportunity to start over.
It starts with a consultation with a Licensed Insolvency Trustee, filing of legal papers with the court and notification of your creditors. For a period of time, all legal actions are placed on hold – garnishees stop and creditors are not entitled to seize assets. If you wish to retain certain secured assets, for example a house or car, you must continue to pay on these debts – otherwise, they are turned over to a secured creditor.
After nine months, you are eligible for your discharge from bankruptcy. A creditor may stop your discharge if they have valid grounds. The trustee may stop your discharge if you have not performed your duties under the act, or, if there are reasons why you should not be discharged (fraud, etc). Upon your discharge most debts are absolved and you have no legal obligation to pay them.
You are entitled to retain certain assets, which varies by Province. Depending on your income, you may be required to make payments to your trustee during the nine months that a bankruptcy in Toronto typically lasts.