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Despite the negative implications of filing for bankruptcy, one has sometimes no choice but to commit to this plan of action. Unpaid bills, demand letters from lawyers, continually maxed out credit cards – all these are signs that you need help with your finances.

The logical step would be to get competent advice. In this area, you can’t go wrong with entrusting your financial health to a Licensed Insolvency Trustee (LIT). Only Licensed Nanaimo Bankruptcy Insolvency Trustees are recognized by the Canadian government as reputable agents in giving sound financial advice. They can institute proceedings to protect you from creditors, harassment, and garnishment. Part of the license requirements for LITs is that the fees they charge are regulated, you are assured of a fair service charge. A LIT may even steer you away from filing for bankruptcy and instead offer a solution that will not affect your credit rating as much as a bankruptcy process will.

Note that the Canadian Bankruptcy and Insolvency Act protects a debtor from overwhelming debt but also seeks to indemnify creditors as much as possible. It is not an escape clause, nor an excuse for, bad spending habits.

However, if declaring personal bankruptcy in Nanaimo is your best avenue, this is how you go about it:

  1. A bankruptcy proceeding must be undertaken with the guidance of a Licensed Insolvency Trustee. The LIT’s role is to ensure that both debtor and creditor are treated equally fairly.
  2. Obtain a debt assessment. The LIT will assess your financial situation and give you guidance on how to proceed. The LIT may also propose an alternative course of action, one that does not involve filing for a personal bankruptcy.
  3. Sign the documents prepared by the LIT declaring your personal bankruptcy. The two basic documents you need so sign will be the one assigning your assets to the bankruptcy trustee and the other will be a statement which enumerates your income, assets, liabilities, and expenses. Upon signing these documents, you become legally bankrupt, and the process will go forward.
  4. After completing the previous step, collectors are legally bound to stop calling you and the LIT can also halt any wage garnishments, if necessary. On your part, you are bound to make bankruptcy payments, make statements on your monthly budget, attend credit counselling sessions, and keep the LIT updated about your situation.
  5. A Certificate of Discharge is issued in your favor as you complete your duties. This certificate eliminates your debts and is usually automatic for a first time bankruptcy.

In some situations, a creditors meeting is also held, where you will be questioned about your financial status. The creditors may also vote for a change of trustee if they are not satisfied with the current one. Statistics show that only 1 in 1,000 meeting result in a creditors meeting, and a significant tax debt is usually the reason for calling such a meeting.