David Sklar & Associates Inc.

Consumer Proposal & Bankruptcy Trustees
Serving the Greater Toronto Area

Living in Bankruptcy

Bankruptcy is not fun, it is the last option recommended for getting people out of crippling debt. In Toronto as in all of Canada, it can only be filed by a Licensed Bankruptcy Trustee who has reviewed the applicant’s finances in detail and agrees that bankruptcy is the best option for the situation.

While bankruptcy is tough, it is not a punishment – it is a method to return as much money as possible to unsecured creditors, while enabling bankrupts to get a ‘fresh start’. For more information on the Bankruptcy Process visit here.

Depending on their incomes, first-time bankrupts will be living in bankruptcy for 9 to 21 months during which time:

• they will live on a strict budget set up by them and their Trustee
• they will provide detailed budget/expenses reports each month to their Trustee
• where applicable, they will pay surplus income into their Bankruptcy Estate through their Trustee
• they will advise their Trustee of any changes in their income (changes can affect the length of time they are in bankruptcy)
• they will attend credit counseling sessions

During bankruptcy many people experience a major shift in their standard of living. Depending on the details of their situation, they may not necessarily lose their home. For residents of Ontario, if their vehicle has a value of more than $5,600 and is not secured by a creditor, they may lose their vehicle. In addition, many of their luxury items may be gone.

With all of this going on you would imagine that people living in bankruptcy are depressed, sad, despondent souls who have lost all sense of hope and well-being, and for the most part – you would be wrong.

While the adjustment to the regimen of bankruptcy can be difficult, it comes with some wonderful benefits. All collection efforts by unsecured creditors must cease once a person is in bankruptcy – this includes:

• collection calls,
• written notices,
• wage garnishees, and
• all legal actions.

Many of our bankruptcy clients report sleeping soundly for the first time in years. They know that they have challenges ahead, but with the burden of unmanageable debt lifted from their shoulders, they have regained their sense of hope. They recognize that at the successful end of their bankruptcy, they will be released (discharged) from their unsecured debt, and will be able to start their lives anew.

Of course it is better to resolve your debt issues without going into bankruptcy – but if you or someone you care about needs the help that only a bankruptcy can provide – contact a local Bankruptcy Trustee to discuss all the options.

Note: in the Greater Toronto Area, David Sklar & Associates - Licensed Bankruptcy Trustees, offers a free initial consolation and welcomes your inquiries. Call 416-498-9200 to book an appointment.