Bankruptcy FAQs

Personal bankruptcy is something you may not know much about until you are forced to consider it for the first time. If handled correctly, it can be a beneficial debt solution. If mishandled or without enough information, it can be extremely confusing.

D. Thode & Associates Inc. wants to help you find debt solutions that last, and we have provided this FAQ page on common personal bankruptcy and proposal issues to help you make educated decisions.

For advice from industry experts, please contact us.

Who will be notified of my bankruptcy?

Although personal bankruptcy is part of the public record, typically only parties involved will be notified of your bankruptcy claim. When you work through bankruptcy with D. Thode & Associates Inc., we will do all we can to keep your bankruptcy confidential.

Who is involved with a bankruptcy?

Bankruptcy involves your creditors, your trustee, an official receiver, a bankruptcy court and the Superintendent of Bankruptcy.

Is bankruptcy legally binding?

Yes. By signing the legal documents to declare bankruptcy, you show that you understand the significance of your situation. Before signing, be sure that you understand all details of your bankruptcy and provide accurate and honest information to your trustee. D. Thode & Associates Inc. will be with you throughout the process to give you the information you need.

Who is involved with a bankruptcy?

How does bankruptcy affect loan co-signers? Entering into bankruptcy does not negate a co-signer’s responsibility for the repayment of a loan. This means that bankruptcy has ramifications for both the signer(s) and co-signer(s).

Will garnishments be stopped?

When you declare bankruptcy, most garnishments and legal actions will stop, but there are certain areas that will not be affected, such as criminal fines. Your specific circumstance determines the cessation or continuation of garnishments, all of which can be explained to you by a D. Thode & Associates Inc. employee.

Do my credit payments stop?

Existing payments to creditors should stop once bankruptcy has been declared. Your trustee will then handle payments to creditors by determining your expenses and excess income.

Will filing bankruptcy stop the creditor calls?

Harassment from creditors should cease once you have entered into bankruptcy. All creditors that continue to contact you should be referred to your trustee. You have rights and deserve to have them upheld in a civilized manner.

Does entering into bankruptcy impact my credit rating?

Credit reporting agencies can obtain information about your bankruptcy since bankruptcies are entered into the public record. This may affect your credit, although the exact impact varies from case to case. For more information about how your personal credit will be affected, contact D. Thode & Associates Inc.

What about windfall profits?

Windfall profits – unexpected profits such as lottery winnings, unexpected inheritance, or demutualization increase – are given up as payment to your creditors during your bankruptcy period.

Will filing my taxes change?

Yes. When you enter into bankruptcy, you will need to complete two tax return forms. The first is for the period before your bankruptcy began. The second is for the period from your bankruptcy date to the end of the fiscal year. All tax refunds will be administered to your creditors as part of the bankruptcy settlement.

Does bankruptcy affect my employment prospects?

In most cases, employment prospects are not affected. The main exception is if a potential career requires you to be bonded. In some cases, this may be problematic. Your trustee at D. Thode & Associates Inc. can provide you with details pertaining to specific companies you are considering applying to.

How does a discharge from bankruptcy work?

First-time bankrupts who have obtained counselling are automatically discharged from bankruptcy 9 months after the filing date. (Note: If a discharge is opposed, this timetable may be extended.)

Are there alternatives to bankruptcy?

One alternative to bankruptcy is a creditor or consumer proposal. This is a proposal to your creditors where predetermined payments will be made over a set amount of time. Proposals have some similar characteristics to filing for bankruptcy and are most effective with professional assistance. Contact a professional trustee at D. Thode & Associates Inc. to learn more about creditor proposals.

Can I keep my home if I go bankrupt?

Whether you can keep your home is completely dependent on how much equity is available at the date of filing.  If you have equity in your property, a consumer proposal may be a better option for you. 

Will my student loan be included?

Your student loan will be included in the bankruptcy filing; however, if you cease to be a full or part time student less than 7 years prior to filing, your student loan will survive the process and you will be required to make repayment arrangements after the bankruptcy is complete.

Can bankruptcy help if I owe taxes?

Income tax, GST and Director’s liability for source deduction debts are dischargeable in a personal bankruptcy.

Will bankruptcy affect my spouse’s credit rating?

If your spouse is not joint or co-signed on your debts, then your spouse’s credit rating will not be impacted.  If they have co-signed or are joint on any of your debts, then they will become fully responsible for the debt if you file for bankruptcy.  Our Licensed Insolvency Trustees will be able to address these issues with you and your spouse.

What happens to my vehicle?

Each Province has its own exemptions for assets, in British Columbia the amount for a vehicle is $5,000.  If the equity in the vehicle is $5,000 or less, you will be able to keep it.  If you have financed your vehicle, and the equity is less than $5,000, you can continue to pay your car loan and keep the vehicle.

Will I ever be able to have credit again?

You can apply for credit once you are discharged from bankruptcy and will likely need to start off with a secured credit card. 

What would you do if you were me?

As Licensed Insolvency Trustees, we are asked this question all the time.  We help you clearly lay out all of the options available to ensure you understand how each option would impact you. At this point we can provide you guidance on the options so that you can feel comfortable making the ultimate decision to take care of yourself and your family.

Contact us for a FREE "Know Your Alternatives" consultation.
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Our B.C. Offices

Should you require bankruptcy solutions and counselling,  D. Thode & Associates has several offices to serve you throughout British Columbia.

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