What is Personal Bankruptcy?

Bankruptcy is a legal option available to you to resolve your debts and achieve a financial fresh start. The option to file for personal bankruptcy is yours – no creditor or other party can prevent you from seeking the protection of Canadian personal bankruptcy legislation. To understand if personal bankruptcy might be the right option for you (and if our trustees in bankruptcy can provide debt relief), consider the following signs of serious debt problems:

  • Making only minimum payments on credit cards
  • Wages are being garnisheed by creditors
  • Assets are being seized by creditors
  • Using overdraft most months
  • Uncertainty about how much you owe in total
  • Credit collectors are calling
  • You are considering consolidating your debts

It is important to realize that you are not alone in your financial challenges or your drive to become debt-free. Over the past 26 years, Sands & Associates, trustees in bankruptcy, has helped thousands of individuals in BC by providing debt relief and helping them achieve a financial fresh start.

Contact Us for a free, confidential evaluation to see if we can help you become debt-free.

Dave’s Story – an Independent Film 

Sands & Associates partnered with local filmmakers to make an independent film about one person’s journey through bankruptcy. Dave Malicki is a 46 year old lawyer, at the age of 39 he declared personal bankruptcy. Watch Dave’s story progress, from successful lawyer to an individual going deeper and deeper into debt.

There are many misconceptions and myths about filing for personal bankruptcy in BC. Here are the facts:

Myth: I will be in bankruptcy for seven years or longer

Fact: According to the Office of the Superintendent of Bankruptcy, for 80% of debtors, bankruptcy lasts nine months, and costs approximately $1,800 (minimum fees set by Government tariff). Most people pay $200 per month for the nine month term of their bankruptcy.

Myth: My credit rating will be destroyed and will never recover

Fact: Bankruptcy will negatively impact your credit rating and will be noted on your credit report for six years following your discharge. During your financial counselling sessions with us, we will provide you with proven tools and techniques to help you rebuild your credit after bankruptcy. There are a number of ‘after bankruptcy’ lenders who specialize in working with rehabilitated debtors. With the right saving and budgeting habits post-bankruptcy it is very possible to rebuild your credit much sooner than six years after your discharge. For many people who are considering bankruptcy, their credit rating has already been negatively impacted by missing payments on their current debts. Claiming bankruptcy and achieving a fresh financial start can be the best option for some people to repair their credit in the shortest time possible.

Myth: I will lose everything I own

Fact: Contrary to conventional wisdom and bankruptcy’s portrayal on Wheel of Fortune™ (where the contestant loses everything), most people keep all of their assets when they go bankrupt. As part of the bankruptcy process, you are required to swear a statement disclosing all of your assets and liabilities. BC legislation sets out a base level of assets that are considered “exempt property” (i.e. you are not required to surrender them if you go bankrupt). Exempt property includes the following:

  • RRSPs up to an unlimited value (except for contributions made in the 12 months prior to bankruptcy)
  • Equity in a home in Greater Vancouver and Victoria up to a $12,000 value (in the rest of the province up to a $9,000 value)
  • Household items up to a $4,000 value
  • One vehicle up to a $5,000 value (the vehicle exemption drops to $2,000 if the person is behind on child support payments)
  • Work tools up to a $10,000 value
  • Essential clothing and medical aids is unlimited.

Many people considering bankruptcy are concerned about the potential negative impact on their credit rating. We have developed a short animated YouTube video that provides concrete steps on how you can quickly rebuild your credit after a Personal Bankruptcy or Consumer Proposal:

We find that many individuals with whom we meet have various misconceptions about personal bankruptcy. Please click below to watch a short animated YouTube video that addresses the main misconceptions about personal bankruptcy proceedings in Canada:

Feel free to contact us or request a free consultation.

Are creditors harassing you? Are the endless phone calls and collection letters causing you stress? Are you living on your credit cards? Are you unable to maintain your minimum payments? Are you being pursued for government debt? If you answered "yes" to any of these questions, you are not alone. In the twelve-month period ending July 2016, more than 66,000 Canadians were in the same financial position and found relief by seeing a Licensed Insolvency Trustee and filing personal bankruptcy. Another 57,000 Canadians settled their debt management problems by filing a consumer proposal.

If you are not a resident of British Columbia, more information is available about bankruptcy in Canada.

No matter what the cause of your financial difficulties, the Bankruptcy and Insolvency Act does not restrict a person from filing personal bankruptcy or making a consumer proposal. For example, you could be in financial trouble due to the loss of employment, a divorce, a leaky condo, medical problems, gambling, substance abuse, or poor money management. Regardless of the reason, filing personal bankruptcy or making a consumer proposal to your creditors is based upon your unique individual circumstances and is ultimately your personal decision. In BC, both of these remedies can only be filed by utilizing the services of Licensed Insolvency Trustees. At Sands & Associates, our Licensed Insolvency Trustees understand that most people file into bankruptcy or make a consumer proposal to creditors because of unfortunate circumstances, and we will guide you through this difficult time. 

Personal bankruptcy or a consumer proposal to creditors can provide shelter from the financial storm. Each will stop virtually all legal proceedings, garnishees, and phone calls from your creditors. These legal remedies provide a fresh start by pardoning your debts including credit card debts, lines of credit, legal bills, utility bills, medical bills, automobile insurance, judgments, government debts, etc. A Licensed Insolvency Trustee can help you understand the relative merits of each of these debt management options within BC. 

At Sands & Associates, we make filing personal bankruptcy or making a consumer proposal to creditors simple. We will arrange for a free initial consultation with one of our knowledgeable staff to discuss your financial status, and help you to determine whether bankruptcy or a proposal to creditors is the right choice for you.

Should you choose to file personal bankruptcy or make a consumer proposal to your creditors, we will process the necessary paperwork, arrange for possible meetings with creditors, provide two credit counselling sessions at our convenient offices located in Vancouver, Burnaby, New Westminster, Richmond, Surrey, Langley, Coquitlam, Maple Ridge, White Rock, Abbotsford, Chilliwack, Victoria, Nanaimo, Kamloops and Kelowna. 

After you have filed personal bankruptcy or a consumer proposal, you are required to perform your duties as outlined in the Bankruptcy and Insolvency Act. Some of the duties in a personal bankruptcy include keeping the Licensed Insolvency Trustee informed of your current address, declaring your monthly income and expenses for a minimum of nine months, attending two credit counselling sessions, and paying the Licensed Insolvency Trustee an amount that is dependent upon your income and the assets that you own. 

If this is your first personal bankruptcy, the earliest that you will be eligible for your discharge is nine months after your date of filing. A discharge from bankruptcy means that your debts will be eliminated and your creditors can no longer pursue you for the outstanding amount owed. It provides peace of mind and a chance for a fresh financial start. 

If you choose to make a consumer proposal to your creditors and if the creditors and the court accept it, the contract is binding between you and the creditors. A certificate of completion, which discharges your indebtedness, will be given as long as you meet the terms of the contract and remit the appropriate funds or assets to the Licensed Insolvency Trustee.