Resources

Frequently asked questions

1. How do I know if I am in financial trouble?

There are certain "warning signs" that may indicate you are in financial trouble, such as:

  • Receiving frequent calls or letters from creditors or collection agencies.
  • Having no savings.
  • Spending all your money before payday.
  • Stalling one creditor to pay another.
  • Buying things impulsively.
  • Using your credit cards or other loans to pay for everyday expenses.
  • Failing to budget or make a financial plan.
  • Having your consolidation loan applications rejected.
  • Having trouble making the minimum payments on your credit cards.
  • Not knowing what your real monthly expenses are.

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2. Is bankruptcy my only option?

If you are in financial trouble, you may believe that bankruptcy is your only option. However, there are many options to help you solve your money problems - such as consolidating your loans or making a consumer proposal. Your Deloitte bankruptcy trustee can help you decide which option is best for you.

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3. Do I qualify for bankruptcy?

To qualify for bankruptcy, you must:

  • Owe at least $1,000; or
  • Be unable to pay your debts on time; or
  • Have insufficient assets to pay all of the money you owe.

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4. Should I declare bankruptcy?

Bankruptcy is only one option when you are having financial trouble. To decide which option is right for you, you should start by meeting with a Deloitte advisor for a free, no obligation, and confidential consultation. During this meeting, we can discuss your personal situation and explain your options, so you can make an informed decision.

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5. How much does it cost to declare bankruptcy?

In a bankruptcy, the trustee's fee is governed by legislation. In addition, at Deloitte we tailor our fee arrangements to your individual situation, so you get the help you need at a cost you can afford.

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6. If I go bankrupt, will I lose everything?

No! Although the trustee may use some of your assets to help pay your creditors, every province has a list of assets that are considered "exempt". In addition there is a new federal exemption for RRSP's. For instance, in many situations, you can keep your house and car in a bankruptcy, as long as you continue to pay your secured creditors. You can also keep your furniture, personal items, and various equipment you need for your work. Exempt items vary by province.

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7. Once I declare bankruptcy, what happens to the money I owe?

Once you declare bankruptcy, you will no longer have to deal directly with your unsecured creditors. Instead, the trustee will work with your creditors to pay them some of the money they are owed. That means most lawsuits and wage garnishments against you will stop.

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8. What happens to my wages during a bankruptcy?

When you declare bankruptcy, you will still receive your wages directly from your employer. However, each month you will be required to fill out an Income and Expense Form and send it to the trustee. Any money you earn above certain government standards is called "surplus income", and you will be required to pay this to the trustee during the bankruptcy.

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9. Will I still owe money after I declare bankruptcy?

Even when you declare bankruptcy, you will still owe money on certain debts. These include some student loans that are less than seven years old; alimony, child, or spousal support; certain court fines or penalties; and debts you incurred due to fraudulent misrepresentation.

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10. How long will I be bankrupt?

Most people who declare bankruptcy for the first time are eligible for an automatic discharge nine months after the bankruptcy started.

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11. Who will find out that I have declared bankruptcy?

Most bankruptcies are not published in the newspapers. Newspaper announcements are reserved for corporate and very large personal bankruptcies. However, once you declare bankruptcy, the trustee will notify all your creditors, the credit bureau, the courts (in some cases), and the Superintendent of Bankruptcy. Your employer may also be notified if the trustee has to stop the garnishment of your wages.

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12. How will bankruptcy affect my credit rating?

Bankruptcy is usually a last resort for people experiencing money problems. As such, many individuals already have a poor credit rating before they declare bankruptcy. Once you do declare bankruptcy, credit bureaus will normally keep a record of the bankruptcy for up to six years from the date you are discharged. This will affect your ability to get credit during that time.

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13. What does a Trustee in bankruptcy do?

Trustees in bankruptcy at Deloitte work with you to understand your financial situation. If you decide to declare bankruptcy, the trustee will help you complete all the necessary documents and file them with the Official Receiver. The trustee also notifies all your creditors of the bankruptcy and deals directly with your creditors during the bankruptcy. In fact, the trustee is considered a representative of your creditors. As such, the trustee will monitor your income during the bankruptcy and provide you with two counselling sessions to help you get a fresh financial start.

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14. How do I choose the right trustee?

It is important to work with a trustee that listens to your needs and understands your concerns. The trustee should have experience helping people like you solve their money problems. You may also want to look for a trustee that offers flexible payment options. If you work far from where you live, or plan to move to a new city, you should also try to find a trustee that has numerous convenient offices - either throughout the city or around the country.

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15. Is my spouse affected by my bankruptcy?

Just because you are married or common law does not mean that you are responsible for the debt of your spouse as long as you have not signed on that debt. If you have joint credit cards, or have co-signed on any credit/loans then you are responsible for these debts. Every situation is unique, it is best to contact a Deloitte trustee for a free, confidential assessment of your situation.

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