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If I file for bankruptcy, what is the process? Will I lose my house or car?
There are many things that can happen during the bankruptcy process. Before you file for bankruptcy, your Licensed Insolvency Trustee will look at your assets and debts. They can then tell you what your options are.
When you file for bankruptcy:
- to pay your debts, you might have to sell your assets, including your house or car
- you must give up all your credit cards
- if you plan to borrow more than $1,000, you must first tell the lender that you are bankrupt
- you must file monthly statements of your income and expenses with your Licensed Insolvency Trustee
- you will have the lowest possible credit rating (R9)
- you must go to 2 financial counselling sessions
While you are bankrupt, you will not have to make payments on most of your debts unless you have surplus income.
Your creditors will not be able to contact you about your debts. Any lawsuits about your debt will stop.
Your assets are things that you own that can be sold to help pay off your debts. Your assets include your:
- house and furniture
- car and other vehicles
- clothes and jewellery
- investments like RRSPs, Canada Savings Bonds, and RESPs
You must tell your trustee about all your assets before you file for bankruptcy.
While you are bankrupt, you are still allowed to:
- work, quit, change jobs, or get a new job
- go to school
- get married
But it is a good idea to talk to a Licensed Insolvency Trustee before doing any of these things because these actions can affect your bankruptcy. For example, getting married might change your surplus income payment.