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Bankruptcy Duties Under The Bankruptcy & Insolvency Act


When filing for bankruptcy, there are specific responsibilities outlined in the Bankruptcy and Insolvency Act that must be performed to fully complete the process.  Think of the bankruptcy procedure as an agreement that you make with your Bankruptcy Trustee, your creditors (the people that you owe), and yourself.

You have debt that you cannot keep up with and you need help.  Personal bankruptcy can help you to get the fresh financial start that you desire, but only if you complete all of your required duties along the way. These duties are set by the Government of Canada in bankruptcy law and are consistent no matter who you file bankruptcy with.

Bankruptcy Duties:

  • Turn over your assets to your trustee. Don’t panic, you don’t lose everything. You keep your clothing, furniture, basic jewelry (your wedding ring), and even a car (within limits). Your trustee will use these assets to pay back a portion of your debts to your creditors.
  • Turn over all credit cards to your trustee. Even if a card has a zero balance on it, you need to surrender it for the purposes of your bankruptcy. You will not be able to use or obtain any credit during your bankruptcy term.
  • Assist your bankruptcy trustee in administering your file. You are required to provide a complete list of your creditors (including friends or relatives that you owe) and an inventory of your assets.
  • Report your monthly income and expenses to your trustee for a specific period of time. If your income exceeds the guidelines set by the Federal Government, your will have to pay a portion of this income to your trustee, who will then distribute the funds to your creditors.
  • Provide your trustee with all income tax documentation for the year. Your trustee will prepare and file your income tax return for the year of bankruptcy and any outstanding prior years. If you are to receive any refunds, these will be paid to your trustee and distributed to your creditors.
  • Attend two mandatory financial counselling sessions with an accredited credit counsellor. These credit counselling sessions cover budgeting strategies and credit repair information.
  • Disclose any assets that have been transferred or sold. Your trustee will review these assets to ensure that everything is documented correctly in your bankruptcy. Keep in mind that you cannot transfer your home to someone else, because you didn’t want to lose it in a bankruptcy.
  • Update your contact information if anything changes during your bankruptcy. If you move or your phone number changes, your trustee will need to know about this to update your file and to be able to contact you if needed.

What If I Do Not Complete My Bankruptcy Duties?

For the few bankrupts who do not carry out their duties, there are consequences.  The obvious one is that they will not be discharged – their bankruptcy will not be completed.  The courts will likely require them to do something like complete their duties or make a monetary payment to their creditors.

If you have questions about what duties are required to file bankruptcy, contact a Toronto bankruptcy expert for help.