Are you struggling to pay your monthly bills, and it feels like your debt is growing faster than you could ever keep up with? In that case, you might wonder how to declare bankruptcy in Alberta and if this is the right choice. This post will cover everything you need to know about bankruptcy in Canada and how to decide if this is the right path for you.

It is no surprise that so many people in Alberta are curious about how to declare bankruptcy. After all, consumer debt levels in Alberta are higher, on average, than anywhere else in the country. 

How to Declare Bankruptcy in Alberta

Before we cover some of the specific steps you’ll take when you file for bankruptcy, let’s begin by discussing who can file for bankruptcy in the first place. 

Qualifying for a Bankruptcy Declaration

To qualify for a bankruptcy declaration in Canada, you must: 

  • Owe more than $1000 (although this is the minimum, debts in much more significant amounts are usually advisable before you file for bankruptcy)
  • You are insolvent (this means you are unable to pay your debts as they become due)
  • Live or do business in Canada
  • Have more debts than assets

If you meet these qualifications, here are the next steps you will take in the bankruptcy process.

how to declare bankruptcy in Alberta

Meet with a Licensed Insolvency Trustee

Your first step is booking an appointment with a Licensed Insolvency Trustee. At Fox-Miles & Associates, your first session is always free.

When you meet with a Licensed Insolvency Trustee like the ones at Fox-Miles, they will walk you through the specific steps you’ll take next. They will also discuss your options, including whether a consumer proposal or another debt management option would be best for you.

Before your meeting, be sure to:

  • Create a written list of ALL your debts, including who you owe, as well as specific amounts.
  • Prepare yourself to discuss your financial circumstances, including your income, expenses, and other financial details.
  • Compile a list of any questions you have about how to declare bankruptcy, etc.

Creating Bankruptcy Documents

Next, your LIT can begin administering the bankruptcy process—this is something a LIT must do. To do this, the LIT will need various information to compile the necessary documents for filing.

There will be some additional documents depending on your specific circumstances, but these bankruptcy documents will include: 

  1. The Assessment Certificate
  2. Your Monthly Income and Expense Statement (Form 65) 
  3. The Statement of Affairs (Form 79)
  4. The Assignment for The General Benefit Of Creditors 

Filing Bankruptcy Documents

Next, you will witness and sign these documents. Then, your licensed Insolvency Trustee can begin filing these documents. Filing is an electronic process, and once your document is uploaded, your LIT obtains a Certificate of Appointment. This certificate confirms the initiation of your bankruptcy.

Once this process is complete, your creditors can receive notice that a “Stay of Proceedings” is in effect. Then, they must deal directly with your Licensed Insolvency Trustee for future communication. With this “Stay” in place, it protects you from legal action on your debts, collection calls, interest charges, and wage garnishment.

Duties and Legal Obligations

During your first meeting with a LIT, they will explain the duties and obligations you can expect after filing for bankruptcy. 

These include:

  1. Handing over all non-exempt assets to your licensed Insolvency Trustee
  2. Giving your credit cards to your LIT for cancelling and closing
  3. Paying the set monthly payment towards your bankruptcy estate
  4. Completing two sessions of credit counselling before the deadline (Learn more about credit counselling here)
  5. If applicable, paying the required surplus payments
  6. Preparing a monthly income and expenses statement for your LIT
  7. Giving your LIT any information they need to file your tax returns

What’s next?

After completing your duties and obligations as bankruptcy, what comes next? 

If you have met all of these obligations and completed the bankruptcy period, you should receive an automatic discharge from your bankruptcy. If this is your first time filing for bankruptcy in Alberta, this should happen after nine months. In the event of your second bankruptcy, at 24 months.

(Visit this post next for tips on rebuilding your credit after declaring bankruptcy)

Learn More About How to Declare Bankruptcy in Alberta

The Licensed Insolvency Trustees at Fox-Miles & Associates have the expertise to help you through your financial difficulties. We will work closely with you to guide you in managing your debts moving forward. Speaking with an Insolvency Trustee is the best way to secure a comfortable, stress-free financial future for yourself.

Call today to schedule a free consultation.