Filing For Bankruptcy In Ontario: How Do I Declare Bankruptcy In Canada
Filing for bankruptcy in Ontario begins with a no-cost consultation with a licensed insolvency trustee . In that consultation, the Trustee will want to get a good understanding of your assets, liabilities, income and expenses. That way, the Trustee will be able to discuss with you all the available options and help you narrow them down to the most viable options to solve your debt problems.
At the end of the meeting, the Trustee will give you the standard intake form. By completing the form fully, you will provide the Trustee with the proper information needed for your filing for bankruptcy in Ontario. My Firm calls our standard intake form the Debt Relief Worksheet The information is then used in order for the Trustee to finalize his or her recommendations to you for dealing with your debt. The options available in general for dealing with personal debt are:
A consumer proposal is an insolvency process which is one of the best of all the alternatives to bankruptcy. It is much preferable than filing for bankruptcy in Ontario. In a consumer proposal, you are able to compromise your debt. You make an offer to pay less than the total you owe. You then make the monthly payment to the Trustee until you have paid the total you agreed to.
If you end up deciding on either a consumer proposal or bankruptcy, the Trustee will prepare the required documentation. This is the case for consumer proposal documents or those necessary for filing for bankruptcy in Ontario.
Student Loan Delinquency Or Default
Late student loan payments can start to hurt your credit after 30 days for private student loans and 90 days for federal student loans, and those delinquencies stay on your credit report for seven years.
Federal student loans go into default if you dont make a payment for 270 days. And the government has strong debt-collection powers: It can garnish your wages, Social Security benefits or tax refunds. With private student loans, your lender can term you in default as soon as youre late, but it has to take you to court before it can force repayment.
What to do: If youve paid late but havent defaulted, consider switching to an income-driven repayment plan, putting your loan in deferment or forbearance, or asking your lender for a modified payment plan.
If youve defaulted on your federal student loans, the government offers three options: Repayment, rehabilitation and consolidation.
How Long Does A Bankruptcy Or Consumer Proposal Stay On My Credit Report
How long bankruptcy stays on your credit report in Canada;will depend on the credit bureau that is reporting.
The largest credit bureau in Canada, Equifax, maintains this record on your credit report for a period from the date of your discharge or last payment:
- A first bankruptcy for six years from the date of your discharge.
- A second bankruptcy for 14 years.
The TransUnion web site states that they keep a bankruptcy on your credit file for six to seven years from the date of discharge or fourteen years from the filing date .
At this point the bankruptcy will leave the credit report and you will need to start to rebuild your credit.
How long a consumer proposal stays on your credit report again depends on the credit bureau that is reporting.
With Equifax, a consumer proposal is reported for three years after your last payment.
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Can I Improve My Credit Score After Bankruptcy
Even though bankruptcy remains on your credit report for up to ten years, you can start rebuilding your credit right away. Credit scoring companies look at several factors when computing your scores:
- your payment history
- your outstanding debt
- the length of your credit history, and
- how much new credit you’ve applied for.
You can start to improve your credit after bankruptcy by making all of your payments on time. Keep your debt load low, especially as compared to your available credit. And when you are ready, get a credit card, make small charges, and pay the bill off in full every month.
Is There A Program That Will Pay Me Some Of The Wages Owing If My Company Is Bankrupt
The federal Wage Earner Protection Program , offers some compensation to eligible employees who are owed money from a bankrupt employer or one who is in receivership.
To access this program you must file an application for payment with Service Canada.
For more information on the WEPP, call Service Canada at 1-800-622-6232.
For further information about the ESA please contact the Ministry of Labour, Training and Skills Developments Employment Standards Information Centre:
Greater Toronto Area: 4163267160
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Can You Remove A Bankruptcy From Your Credit Report
You may have heard that you can dispute information on your credit reports, but keep in mind that the dispute process only works for mistakes and misreported information. A bankruptcy will not be taken off your record through this process, so you are better off using your time and energy to improve your credit instead.
Also, be aware that after youve waited either seven or 10 years, depending on the type of bankruptcy, you wont need to do anything to have your bankruptcy removed from your credit reports. The details will be removed automatically by the credit bureaus.
Bankruptcy Exemptions In Newfoundland And Labrador
- Food and fuel required by you and your dependants for 12 months
- Clothing for you and your dependants up to $4,000
- Household furnishings and appliances up to $4,000
- One motor vehicle up to $2,000
- No limit on medical and dental aids for you and your dependants
- Items of sentimental value up to $500
- All pets are exempt from bankruptcy
- Up to $10,000 of equity in your home
- Tools of your trade or business up to $10,000
- Certain income and pension plans
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Can I Rebuild My Credit After Bankruptcy
You can rebuild your credit after bankruptcy, but its a long process. Your options will be limited at the start, but it is key to not get discouraged. As time goes on, if you consistently pursue a credit rebuilding strategy, your reports and scores can improve.
Here are some recommendations to start with:
- Understand the cause: Identify, accept, and learn from the root causes of your bankruptcy so you wont find yourself in the same position down the road.
- Stick to a budget: Re-evaluate your finances and see where you can cut expenses and save more money if you can.
- Start establishing a new credit history: No, this does not mean using an alias . It means starting fresh with whatever credit you can obtain.
This may mean settling for an extremely high-interest rate, taking on a co-signer, depositing cash into a secured credit card, or other options that have been designed specifically to help you re-establish a positive credit record.
Use these credit options sparingly and never put more on a card than you can pay off by the end of the month so your credit improves over time.
How Does A Consumer Proposal Affect My Credit Rating
When you file a consumer proposal, you are telling your creditors you can no longer make the required payments on what you owe them. And, yes, filing a consumer proposal will affect your credit rating but theres more to the story.
If you file a consumer proposal, your credit score will be negatively affected, just as it would be if you simply ceased to make your payments. Filing a consumer proposal will typically result in an R7 rating for 6 years from the date the proposal is filed, or three years from the day the proposal is complete, whichever comes first.
However, keep in mind that if youve been experiencing financial stress, your credit score may already have been damaged by unpaid, late or delinquent accounts on your file. Before we explore how a consumer proposal affects the credit rating, lets briefly examine the meaning of consumer proposal and how it works.
It is important to remember that filing a consumer proposal is a positive step, and the effect on your credit rating can be temporary.
Questions about consumer proposal? A Licensed Insolvency Trustee can answer your questions and help you explore your options. Contact a Trustee today for a free consultation.
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How Long Does A Chapter 7 In Bankruptcy Stay On Your Record
Today were going to be talking about how long chapter seven bankruptcy impacts a consumers credit report. Hi, my name is Mike Ziegler. Im the managing attorney for The Debt Fighters. Were a Florida law firm focused on strategically eliminating serious debt. So lets answer this a few different ways. First, just like any good attorney I have to give you the answer, but then all of the exceptions to the rule. So the answer to the question is that bankruptcy stays on a credit report for up to 10 years. That is can be longer than most information stays on a credit report. Most other information stays on credit report for seven years. However, the misconception is that a credit report is in the garbage can for the duration of that 10 year period and thats just not true. Theres plenty that you can do proactively to improve your credit score. Most clients we work with have a better credit score than when they started, in about two years of filing for bankruptcy. And you can definitely get reasonable lending within a shorter period of time.
Can I Improve My Credit Score After A Bankruptcy
Attempting to dispute a bankruptcy on your credit report is not the only way to rebuild your credit score following a bankruptcy filing. You can also take other steps to try to boost your credit score and begin to improve your financial opportunities, even if your bankruptcy remains on your report for seven years or a decade.
Here are a few ways to improve your credit score following a bankruptcy:
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Why Consider Opting For A Consumer Proposal
If you have the capacity to make partial payments towards your debts, opting for a consumer proposal is an advantageous option for a number of reasons. It not only helps you avoid bankruptcy but can also relieve you of a significant proportion of your debt without interest. In addition, it consolidates your debts into one reasonable and affordable monthly payment, the terms of which can be negotiated with the guidance of a federally Licensed Insolvency Trustee. Moreover, there is no loss of assets in a consumer proposal,so assets like home equity investments, and secondary motor vehicles can be retainedwhile stopping collection calls and legal action from creditors. Proposals filed by Licensed Insolvency Trustees are the only debt settlement plans sanctioned by the Government of Canada. The Office of the Superintendent of Bankruptcy is the section of the Government of Canada that regulates the bankruptcy and consumer proposal processes in Canada.;
It is important to remember that filing a consumer proposal is a positive step, and the effect on your credit rating will be temporary. Questions about consumer proposal or how does a consumer proposal affect your credit score? A Licensed Insolvency Trustee can answer your questions and help you explore your options. Contact a Trustee today for a free consultation.
How Long Does Chapter 13 Bankruptcy Stay On Your Credit Report
Chapter 13 bankruptcy, also known as wage earners bankruptcy, is for people who earn too much money to qualify for Chapter 7 but not enough to actually satisfy their creditors’ demands.
As with Chapter 7 bankruptcy, filing for Chapter 13 bankruptcy will torpedo your credit score, but the filing will only remain on your credit report for seven years.
If you need to apply for another loan during that time, youll need to file a motion and obtain the courts permission first.
Under Chapter 13 bankruptcy, the court creates a payment plan for you to repay as much of your debt as possible over the span of three to five years.
After that span of time, any remaining debts are wiped clean, meaning that your creditors may not get the full amount you owe them. Chapter 13 bankruptcy allows you to repay some of your debt while still holding on to your assets, including cars, jewelry and property.
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Consider Applying For A Secured Credit Card
After filing for bankruptcy, its unlikely that you will qualify for a traditional credit card. However, you may qualify for a secured credit card. A secured credit card is a credit card that requires a security depositthis deposit establishes your credit limit.
As you repay your balance, the credit card issuer usually reports your payments to the three credit bureaus. Repaying your balance on time can help you build credit. Once you cancel the card, a credit card provider typically issues you a refund for your deposit.
When shopping for secured credit cards, compare annual fees, minimum deposit amounts and interest rates to secure the best deal.
How Long Can A Bankruptcy Stay On Your Credit Report
- Chapter 7. In a Chapter 7 bankruptcy, your assets are liquidated or sold to pay off your debt. At the end of your case, any remaining eligible debts are discharged or wiped out. This type of bankruptcy is only available to people in dire financial circumstances who have no hope of repaying their debts. A Chapter 7 bankruptcy remains on your credit report for ten years from the date you file.
- Chapter 13. A Chapter 13 bankruptcy is also known as a wage earners plan. Its for people who have a regular income but cant manage or repay all their debts. During a Chapter 13 bankruptcy, you get help setting up a plan to repay your debts over three to five years. At the end of the plan, remaining eligible debts can be discharged. A Chapter 13 bankruptcy remains on your credit report for seven years from the bankruptcy filing date.
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How To Check Your Credit Report Following A Bankruptcy
Its always good to keep a close eye on your credit report and score. This becomes even more important when you have a bankruptcy on your record. There are many different websites that allow you to access your credit report, but the only truly free option is;AnnualCreditReport.com.
To find your report, youll need your Social Security number, address, full name and date of birth. Once you pass a few security questions, youll receive a copy of your report in the form of a PDF.
How Does Credit Reporting Affect Me
Lenders throughout Canada will usually send a monthly report on their borrowers to the credit reporting agencies. The credit bureaus will also receive an update from the Superintendent of Bankruptcy on anyone who has filed bankruptcy. This update will also include anyone who has been discharged from bankruptcy. The credit reporting agencies including Equifax and TransUnion will then review this update and provide this information to lenders. This data enables lenders to review who is requesting to borrow from them, and make an informed decision. If, therefore, your credit report states bankruptcy and a poor repayment history, it could prove difficult for you to borrow. If you are looking to borrow from a lender, it is important that your credit report is as strong as possible.
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Can You Get Credit After A Bankruptcy
Myth: You cant get a credit card or loan after bankruptcy.
The truth: Credit cards are one of the best ways to build credit, and there are options out there for those with a checkered credit history. Secured credit cards, which require an upfront security deposit, have a lower barrier of entry but spend and build credit just like a traditional card.
Similarly, there are loans availablesuch as passbook, CD or that are secured with a deposit or collateral and help you build credit as you pay them off. Like secured credit cards, these loans are much easier to come by because the lender is protected in the event you cant pay. Do note that you may need to get permission from the court to take on new debt during a Chapter 13 repayment plan.
How Long Does Chapter 7 Bankruptcy Stay On Your Credit Report
Chapter 7 bankruptcy is the classic bankruptcy measure for people who have defaulted that is, failed to pay their loans. This form of bankruptcy clears most debts, including:
Credit card debt Medical bills Personal loans
Chapter 7 bankruptcy stains your credit report for 10 years from the date of filing. The bankruptcy can also cause your credit score to plummet by 200 points or more.
Any debts that were wiped away by filing for Chapter 7 bankruptcy will be included on your credit report.
To qualify for Chapter 7 bankruptcy, you must first pass a means test that assesses your income and assets-to-debt ratio. Oftentimes your property, cars and other valuables might have to be sold off in order to pay back as much of the debt as possible but some day-to-day essentials you own might be exempt under the law, such as your home or computers you use for work.
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Are All Bankruptcies The Same When It Comes To Credit
Myth: Bankruptcy affects the credit of all consumers who file equally, regardless of the amount of debt or the number of debts included.
The truth: Bankruptcies are far from created equal. As already stated above, some stay on your credit longer than others.
Creditors also tend to prefer to see Chapter 13 bankruptcies over Chapter 7 bankruptcies. Thats because Chapter 13 bankruptcy requires you to make some;payment on your debt, so it demonstrates that you do try to pay your debts whenever possible. However, that doesnt mean Chapter 13 is the right choice for everyone and every situation.
How much debt you have and how much is included in the bankruptcy can also make an overall difference on how your credit is impacted. In short, your credit is going to suffer, but theres no single number that can be provided for how much it will drop.