Can I afford to file for bankruptcy?

You’re drowning in debt and something needs to be done but you’re worried about the costs of going bankrupt. Can you afford to file for bankruptcy? Even though you are struggling to make ends meet, there is a minimum fee that a Trustee in bankruptcy is required to charge to file your bankruptcy. The minimum fee ranges from $1,800 to $2,000 for a first time bankrupt. Most Trustees will accept payments over the term of your bankruptcy.

There are other factors that determine the amount you must pay to your Trustee – your family income, the size of your family, the value of your assets and any transfer of assets prior to filing bankruptcy. The Superintendent of Bankruptcy has determined that a family of one should be able to live off of an income of $2,006 per month. If your monthly net take home income exceeds this amount, then 50% of the surplus has to be paid to the Trustee for the benefit of your creditors for the term of your bankruptcy.

If you wish to retain your assets that have equity – for example your house or RESPs for your children – then you must pay the Trustee the value in order to keep those assets. As well, while you are bankrupt, any windfall of cash such as a lottery win, insurance settlement or inheritance must be paid over to the Trustee to be distributed to your creditors.

For those in serious financial trouble that can’t afford even the minimum fee, there is the Bankruptcy Assistance Program.

In order to qualify for the Bankruptcy Assistance Program, you:

  • must have consulted with at least two Trustees who have told you they can’t help you as you are unable to pay their fee;
  • can’t be incarcerated; and
  • You must provide proof that you can’t afford a Trustee and proof you have no extra income.

It is advisable to set up a free consultation with a Bankruptcy Trustee to review your unique situation. There are a variety of options available to you and your Trustee can guide you to a solution that fits you.


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