Bankruptcy in Canada does not affect directly your spouse. Your debts are your debts, and you are solely responsible for them. If you decide to file for bankruptcy, you solve your financial problems and your partner, in fact, is not liable for your debts.

People believe that because they are married, your spouse is automatically liable for its debts. This is not true. Often, credit recovery agency will tell you that if you default, your spouse will be the one to pay. This is a tactic used by collection agency bullied into paying customers

The only exception in which your partner will be affected if you file for bankruptcy is if your spouse is a co-signer or is guaranteeing their debt. For example, if the two of you got a loan and both signed it, also is legally your loan. If you both have a credit card on the same account, the debt of this credit card legally belongs to you two.

Remember, your spouse is responsible for the debt, not because is your spouse, is because he/she signed the debt.

If all your debts are in your name, your bankruptcy will not affect the credit score of your spouse. However, the bankrupt spouse can not qualify as a co-signer in the future, this is how the bankruptcy affects indirectly in your relation ship.

If you are considering filing for bankruptcy in Canada and want to know how bankruptcy will affect your life, contact GS Financial Group, one of our asociate advisors will help you find the best solution for you.

Most collection agents are paid by commission or performance bonus based on the amount of debt they recover. They often use many different collection tactics to force you to pay your debts.
But can a collection agency take you to court?

The answer is yes – it is possible that a collection agency begins legal action against you. Typically, the collection agent who represents his first creditor will call you and send numerous threat letters.

However, it only takes you to court if they think you have the ability to pay, and have not been successful in recovering the money without going to court.

By going to court, the first step is to determine in the first court hearing if you owe the creditor. The court hearing is a very fast event because is well know that you owe the money.

The second step is sentencing by the judge, stating that you owe the money.

The next step is to enforce the sentence and this is done by freezing their assets, freezing their bank accounts or otherwise, or garnishing your wages. Furthermore, most people do not have assets that can be confiscated. Therefore, the creditor is more likely to attempt to garnishee his wages.

Many people worry that if they do not pay their debts will go to jail, but that’s not the case. Jail is the result of a criminal trial. Creditors are taking steps in a civil court, which as described above leads to a sentence or order of attachment, but not prison.

To go to jail should be convicted of a crime and must be charged with a crime by the police. If you rob a bank, you go to jail. If you commit fraud and sentenced, you can go to jail. Not paying your credit card is not a criminal offense

There are a number of duties that you should do while in bankruptcy.

As soon as you start your bankruptcy, you must give your trustee:

All credit cards.

Meeting of creditors

You must attend the meeting of creditors, if one of them is carried out. At this meeting, creditors will have the opportunity to ask questions about your bankruptcy. However, most personal bankruptcies are held without being present creditors.

A meeting of creditors is carried out at the request of the Superintendent of Bankruptcy or creditors with a total of at least 25% of their established claims. These meetings are normally held in the office of president.

Income tax

You must give the administrator of your T-4 and any other information needed to complete tax returns outstanding at the date of bankruptcy.

When you file for bankruptcy, the day file is treated as the end of its fiscal year, so that in the year of bankruptcy you really have to present two different statements.

Any income tax debt will be included in your bankruptcy, but you may have to pay separately. Any refund you are entitled to an asset manager to come to your creditors.

Monthly reporting

Each month, you must report your income and expenses and any change in family status to your trustee, together with copies of pay stubs. Your administrator will provide appropriate forms to fill in order to provide him or her with this information.

Of their income and expenses, the administrator determines whether its net income was higher than the limit allowed by law for you to live. If you have any “excess income” will be required to make a payment each month to the trustee. Most wins in a bankruptcy, more is required to contribute to its heritage for the benefit of its creditors.

For most people are reporting monthly income required for most tasks. However, the monthly income and expense reports over the collapse is very useful for most people, because now keep track of money coming into the home and how they spend and when.

Credit Counseling

To be eligible for an “automatic nine month discharge” must take two credit counseling sessions. Counselling can be one-on-one with you and your manager, or if you prefer, you can be in a group of other bankrupts and their commissioner.

The counseling session should be between 10 and 60 following the start of the bankruptcy, the second counseling session be held no later than 210 days after the date of bankruptcy. The cost of each individual counseling session is $ 85, plus VAT.

This credit counseling is designed to teach good budgeting and money management, so they are less likely to have financial problems in the future. Each session is approximately one hour and analyzed the budget and the causes of financial difficulties.

Experience shows that credit counseling enhances their income and expenditure reports, which gives better control of their finances.

Other duties

You must inform the administrator as to where you live.

You must respond to requests from the administrator, help him or her when necessary and provide all information requested.

If you borrow more than $ 500, you must tell the lender you are bankrupt.

There may be a director of a company.

Timely completion

It is essential to perform these tasks in a timely manner, so that bankruptcy may be completed as soon as possible. For example, if you miss a payment to your manager, your discharge date was postponed. The sooner you get your discharge, the sooner you will be able to rebuild your credit and live life normally.

As seen above, what to do during the bankruptcy is designed in part to help better manage your money. If you’re ready to put its financial problems behind you, please contact us.

The majority of people who file for personal bankruptcy in Canada never imagined they would be in that situation. For many, bankruptcy raises a number of moral dilemmas, one question that often arises from them is “Should I feel guilty if I file bankruptcy?

One thing to note is that in most cases the people had good jobs and were able to apply for a loan, but then, unexpectedly, the problems started. For many financial problems begin with the loss of employment, a marriage break up, or even health problems that prevent you from working.

For these reasons begin people start using credit to pay their bills, but then find themselves so far into debt that they have no choice but to declare bankruptcy.

This creates a kind of moral dilemma. They know they own the money, and they want to pay back, there is when the guilty feeling about bankruptcy show up. They are afraid of taking the “easy way out.”

The point is this: most people do not want to file for personal bankruptcy in Canada, and feel guilty for doing it, but if your debts are overwhelming, bankruptcy may be the solution.

It is better to go bankrupt that to have your wages garnished for many years. It is more important to feed your family and pay rent to pay the service of an embargo.

Of course there is always the option of a consumer proposal. If you want to avoid bankruptcy, an agreement or negotiation between you and your creditors might be the right choice. Although the proposal will cost more than a bankruptcy, by negotiating an agreement with your creditors may disappear the guilty feelings.