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Financial stress can be very overwhelming, especially if you have accumulated more debt than you can afford to repay. Don\u2019t let the threat of legal action and collection calls keep you up at night. In Canada, you have options when it comes to debt resolution. Bankruptcy<\/a> is often a last resort, but it also offers creditor protection and gives you the chance to start over. Knowing and understanding how the process works can help put your mind at ease. If you are considering bankruptcy, this article will be an excellent resource for you. We discuss each step of the process, from your first meeting with a Trustee<\/a> to receiving your certificate of debt freedom. There are three segments and five stages to filing for bankruptcy in Alberta. Want to know what to expect before, during, and after filing for bankruptcy? Keep reading.<\/p>\n If you have come to this article, you likely want to learn more about the bankruptcy process before taking that next step. The federal and provincial laws around debt resolution can be complicated. We will give you clear answers to the most important questions about filing for bankruptcy in Alberta. If you have specific questions about your debt situation, you can always talk to a Licensed Insolvency Trustee (LIT)<\/a>.<\/p>\n This is the first step if you are struggling with debt. The meeting is risk-free, and you are under no obligation. LITs are legally required to explain all your options to you and ensure you understand how each one would impact you, based on your financial situation. Trustees are the most highly trained debt consultants in Canada. They are bound by a code of ethics<\/a> and are recognized as officers of the court. First, your LIT will want to hear your situation and with that information, they can explain your options.<\/p>\n Yes, you heard right – there are options! In Alberta, you do have alternatives to bankruptcy. Your Trustee will explain each option to you as well as how each one would apply to your situation. This is the perfect time to ask questions. We want you to feel confident about your next financial decision. If you decide that bankruptcy<\/a> is the way to go, your Trustee will facilitate the following steps and ensure that you know what your bankruptcy exemptions are in Alberta<\/a>.<\/p>\n <\/em><\/strong><\/p>\n QUESTION: How does payment work for a Licensed Insolvency Trustee (LIT)? <\/em><\/strong><\/p>\n <\/p>\n Bankruptcy is not something you can file on your own \u2013 it can only be administered by a Licensed Insolvency Trustee (aka Bankruptcy Trustee<\/a>). Your Trustee is responsible for compiling all the necessary information in order to complete the documents required to file. Without this paperwork, it is not possible to file for bankruptcy. At this step, your LIT may ask for a deposit.<\/p>\n Your Trustee will be in contact with you for the standard questions such as your legal name, place of residence, and date of birth. You will also be asked to provide a list of ALL your assets, such as the value of your home, mortgage balance, vehicle(s), pensions, insurance plans, money in the bank, and any other property. You will need to offer complete disclosure during this process. Any discrepancies about your assets could prevent you from obtaining a discharge from your debts<\/a>.<\/p>\n <\/p>\n In addition to these essential documents, there will be some additional paperwork your LIT will complete and get you to sign. When the preparation of all bankruptcy documents is complete, you will meet with your Trustee to review and approve the forms. Prior to signing the documents, your Trustee will explain everything to you in detail and ensure all your questions are answered<\/strong>. When you are ready, the final step to filing is signing the bankruptcy documents.<\/p>\n <\/p>\n QUESTION: Can I request to review the bankruptcy documents before meeting with the Trustee to sign them? \u00a0<\/em><\/strong><\/p>\n <\/p>\n As soon as your documents are signed and witnessed, your Trustee can file to the government. This is done electronically by your LIT. The system for filing is set up to ensure that all cases are registered in the same manner. After your document has been uploaded, your LIT will obtain a Certificate of Appointment which confirms the beginning of your bankruptcy. Now your creditors can be advised that a \u201cStay of Proceedings\u201d is in effect and that they must deal directly with your Licensed Insolvency Trustee going forward. The \u201cStay\u201d safeguards you from collection calls, interest charges, wage garnishment, or legal action. You can breathe a sigh of relief knowing that your LIT will handle all negotiations with your creditors on your behalf.<\/p>\n <\/strong><\/p>\n Before you can be released from bankruptcy, you must fulfill your legal duties as a bankrupt. These obligations will have already been explained to you in your first meeting with the LIT and at the signing of documents. But, if anything changes to your situation that affects your ability to fulfill your obligations, we advise you to contact your LIT right away. Depending on the circumstances, it may be possible for your Trustee to grant you an extension. Upon completion of your term and obligations, you become eligible for release from your debts.<\/p>\n <\/p>\n After filing for bankruptcy, your first duty is turning over your assets (non-exempt) to the Trustee. The Alberta bankruptcy exemptions<\/a> will have already been explained to you by your LIT, so you are aware of what assets you can keep. Your LIT handles the sale of your assets and ensures the proceeds are placed into the bankruptcy estate. The bankruptcy estate holds the money that will be used to pay your creditors. The payment of creditors in Canada follows a stringent set of rules outlined in the Bankruptcy & Insolvency Act (BIA)<\/a>.<\/p>\n When you declare bankruptcy, you must turn your credit cards over to your LIT to be cancelled and closed. This applies to ALL your credit cards. A third-party credit card that you are authorized to use, such as a spouse, employer or friend, will not be affected by this rule.<\/p>\n The BIA requires that you attend two sessions of credit counselling with a licensed professional before you can be released from your debts. You have 60 days to attend the first session and 210 days to complete the second session. This is in the best interest of your financial future. These new strategies, habits, and skills will help to prepare you for a fresh start. Your LIT will coordinate these meetings with you.<\/p>\n You are legally required to produce a report of your income and expenses to your LIT every four weeks. Based on these numbers and factors such as family size and additional expenses, the Office of the Superintendent of Bankruptcy (OSB) can determine whether surplus income payments are required. This is a standard part of the bankruptcy process and will have already been discussed with you in your first meeting.<\/p>\nAre You Considering Filing for Bankruptcy?<\/h3>\n
Step 1: Book A Free Consult with A Licensed Insolvency Trustee<\/a> (LIT)<\/h3>\n
Preparing for Your First Meeting:<\/h4>\n
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Step 2: Gathering Bankruptcy Documents<\/h3>\n
Key Bankruptcy Documents in Alberta:<\/h4>\n
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Step 3: Filing Bankruptcy Documents<\/h3>\n
A \u201cStay of Proceedings\u201d safeguards you from:<\/h4>\n
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What Happens After Declaring Bankruptcy in Alberta?<\/h2>\n
Step 4: So, What Duties & Legal Obligations Can I Expect?<\/h3>\n