You would be surprised to hear how many times a week I meet with a new client and the first words out of their mouth is “I need to claim bankruptcy”. They haven’t told me about their work situation, what assets they own, or who or how much they owe. But they are sure that that they have to claim bankruptcy.
Well, at least they have done one thing right; they have contacted a professional. My job is to evaluate everyone’s situation when they come it to meet with me to make sure I have considered and explained all options. If all other options are ruled out, then bankruptcy may be the last resort.
So if we fast forward this a bit, assuming that bankruptcy is the best and only solution, I must gather a lot of information and paperwork, arrange to meet with the client one more time to explain all the documentation and have it signed, and then file it with the government.
The bankruptcy process is now underway. Getting to this point is usually more than half the battle. To make it this far, the person who needs help must acknowledge this and seek out advice. Next the advice giver, a bankruptcy trustee, must confirm that bankruptcy is the best solution. Once the process has started, the remainder of the bankruptcy is mostly administrative. The bankrupt has duties to perform, including attending counselling sessions, providing the trustee with their income information so that tax returns can be prepared, reporting their monthly income to the trustee to determine how much , if any, must be paid to the creditors, and making their payments.
One last point. Starting a bankruptcy is the easy part. Finishing it is harder. If a bankrupt, has complied with all their duties and made all their payments, most of the time they will be eligible for and get their automatic discharge after 9 months. This is when the bankruptcy is over and all their debts are wiped out.
While I have tried to explain filing for bankruptcy here, the best way to learn about the process is by meeting with a trustee who will walk you through these steps. If you would like our help, give us a call. Our toll free telephone number is 310-PLAN (310-7526, no area code required). Or send us an email. Let’s get started.