The short answer to this question is that you should file a personal assignment in bankruptcy when you feel it is the best solution for you for a financial fresh start.  It is a very difficult step for many to take, and you should be ready to complete all of your statutory duties and be ready to rehabilitate yourself financially.  A Licensed Insolvency Trustee will review your financial situation in detail, explain possible solutions and the bankruptcy process, but the timing to actually sign and file the bankruptcy documents is in your hands.

In order to file a personal bankruptcy, you must owe more than $1,000; be unable to pay your debts as they become due; or be unable to pay your debts in full if all assets are sold.  I caution anyone to file an assignment in bankruptcy if they owe less than $6,000.00, but everyone’s situation is different, and $5,000 in debt to one person can feel like a $100,000.00 debt to another person. Bankruptcy can provide stress relief on any level of debt.

Some debtors will call to file bankruptcy as soon as they miss one debt payment, where other debtors will have their wages garnished for a full year before finally making the decision to file bankruptcy to provide them relief from their debt.

Some debtors will have cashed in all their savings hoping their financial situation will improve to enable them to pay their debts, where others are trying to protect and retain exempt RRSPs in a bankruptcy.

Let’s explore your options

The important thing is if you are struggling with debt, make an appointment to see a Licensed Insolvency Trustee to explore solutions.  You can then leave that meeting educated on your options and make the decision if and when you want to file a personal bankruptcy.

By Kathy Lenart – Insolvency Partner, Licensed Insolvency Trustee
CPA, CA, CIRP
Member and Secretary of the Ontario Association of Insolvency and Restructuring Professionals (OAIRP)
Canadian Association of Insolvency and Restructuring Professionals (CAIRP)