This depends on the terms of the proposal you decide to make. However, the payment period cannot exceed 5 years.
F.A.Q.
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How long does the consumer proposal process take?
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Are my assets at risk when I file a consumer proposal?One of the objectives of a consumer proposal is to allow the debtor to keep all their assets. However, the higher the value of your assets, the more appealing the proposal must be to creditors.
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Which debts are not included in bankruptcy?You will be released from all your debts, EXCEPT:
- Fines and penalties imposed by a court, including traffic tickets and child support obligations.
- Student loans become dischargeable if your last year of study was 7 years ago. However, if you returned to school within that period, the timeline restarts from your last year of study, even if you didn’t take out a student loan.
- Compensation awarded in court for intentional bodily harm.
- Debts or obligations resulting from fraud, embezzlement, or breach of trust while acting as a trustee.
- Debts incurred through false representations to obtain goods or services.
- Dividends that a creditor would have been entitled to if they hadn’t been informed of your bankruptcy.
- Debts arising from interest on an amount related to a situation listed above.
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If I declare bankruptcy, will I lose my home?It depends on the available equity in your home. For example, if your house has a market value of $100,000 and you have a mortgage of $90,000, the difference of $10,000 is considered an asset for your creditors. The bankruptcy trustee would need to sell your home unless you can pay the difference to keep it. If you co-own the property with your spouse, you would need to pay half of the equity, which would be $5,000.
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Is it possible to declare bankruptcy even without a job?Yes. Unfortunately, losing a job can trigger financial problems that lead to bankruptcy. However, you will still need to make monthly payments to the trustee despite not having employment income.
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What are the tax implications of bankruptcy?Federal tax refunds, as well as GST refunds, are typically given to your creditors to repay your debts. However, you will be able to collect provincial tax refunds and the QST credit. Your tax returns will be split into two periods: from January 1st until the day before your bankruptcy (this part will be handled by the trustee), and from the date of your bankruptcy until December 31st of the same year.
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What happens to my tax debts (in a consumer proposal or bankruptcy)?Tax debts are unsecured debts, like credit cards or personal loans. You will be released from your tax debts by filing a consumer proposal or bankruptcy. However, if you own a business, you are personally responsible for payroll deductions and GST/QST refunds.
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What assets and income are protected from seizure?According to Articles 552 and 553 of the Code of Civil Procedure, the following assets are exempt from seizure:
- Inheritances (if stipulated in the will);
- Household furniture and items up to $7,000 (liquidation value);
- Personal clothing and work attire;
- CNESST and disability insurance benefits (these will be included in your income for determining your monthly payments).
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Will my employer know about my bankruptcy?No, unless your salary was garnished before you began the process.
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Can I keep a credit card?In the case of bankruptcy, you will need to surrender all your credit cards. In the case of a consumer proposal, you may keep one. Since creditors have the right to cancel cards following the filing of a proposal, it's best to keep a credit card with a bank where you have no other debts.
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Will I be able to open a bank account?Canadian law gives you the right to open a personal bank account. Even if you are unemployed, have no money to deposit, or have declared bankruptcy, you still have the right to open a personal bank account.
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How long does bankruptcy negatively affect a credit report?A credit report will show a bankruptcy notation for 6 years after the bankruptcy discharge, and the credit score will vary based on the financial behavior of the individual post-bankruptcy.
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Can I keep my vehicle still under financing in the event of bankruptcy?Yes, but you must ensure that payments are not overdue. The same applies to leased vehicles.
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If I file a consumer proposal, what will happen when I renew my mortgage?By law, a consumer proposal cannot be used as a reason to deny a mortgage renewal. However, if your mortgage payments are overdue, the financial institution can refuse the renewal.
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Can I leave the country despite filing for bankruptcy or a consumer proposal?Yes, neither a consumer proposal nor bankruptcy affects your passport.
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What is the difference between debt consolidation and a consumer proposal?Debt consolidation is a personal loan offered by a bank to consolidate your debts. A consumer proposal is a payment agreement allowed by law between you and your creditors. The monthly repayment amount is based on your income, expenses, and budget, and payments must be made over a maximum period of 5 years.
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Can you file a joint proposal or bankruptcy?Yes, if the majority of the debts are joint. This can help avoid doubling the costs.
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Will my consumer proposal or bankruptcy affect my spouse?It depends on the debts you have in common. If all your loans are joint, creditors will turn to your spouse. If you have no joint debts, your bankruptcy will not affect your spouse.
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Are my RRSPs exempt from seizure in the event of bankruptcy?Yes, RRSPs are exempt from seizure, except for contributions made in the 12 months prior to filing for bankruptcy.
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What is the difference between A.JB’s office and a trustee’s office?A.JB’s role is to welcome, support, protect, and guide clients to restore financial balance so they can continue living normally. Josée Brouillette, director and counselor at A.JB for 25 years, has extensive expertise in insolvency and knows the lowest amount a client can pay for creditors to accept a consumer proposal.The difference with a trustee is that A.JB cannot sign consumer proposals or bankruptcies, as there is no trustee at A.JB. We have been collaborating with the same trustees for many years.
The service offered is personalized, respectful, and professional.
In addition to her dedication to work, Josée has a unique approach and an extraordinary commitment. She provides the kind of service she would want to receive, ensuring clients feel respected, valued, and confident. Coffee, beverages, and snacks are available to clients. Children are welcome, with surprises, treats, and activities available on-site as well. By the final meeting, the client becomes part of the family.
We are available 7 days a week by appointment, offering communication in the language of your choice, and an assistant who communicates in sign language ensures impeccable service for hearing-impaired individuals.