The LIT then calculates your surplus income. Surplus income is the part of your earnings that exceeds the amount of income a family needs to maintain a reasonable standard of living. This amount is set by the OSB annually. The larger your family, the more you are allowed to keep; the more you earn, the more you are required to contribute.
In other words, if your household income exceeds the level set by the OSB , then you must make additional payments to your LIT during your bankruptcy. Contact an LIT to find out the current limits for your family size.
A discharge releases you from the legal obligation to repay the debts you had as of the date you filed for bankruptcy, except for specific types of debts that are excluded by law.
These include alimony and child support payments, student loans if you stopped being a student less than seven years ago , court-ordered fines or penalties, and debts arising from fraud. The timing of your discharge depends on a number of factors, including whether this is your first bankruptcy, and whether you are required to make surplus income payments. If your surplus income is higher, your bankruptcy will be extended to 21 months and you will be required to make payments from your surplus income.
To ensure that a greater percentage of debts is repaid to creditors, the following standards set out when an automatic discharge will occur. If you do not qualify for an automatic discharge, the LIT will ask the court to hear your application for discharge. The court will then schedule a date for the discharge hearing. The first step is to contact the LIT who handled your bankruptcy. The LIT will inform you of the reasons why you did not receive your discharge. For example, you may need to fulfill certain conditions.
The LIT may agree to process the discharge for a fee. Alternatively, you can ask a lawyer to apply for your discharge. If you cannot afford the LIT or lawyer fee, you may wish to contact legal aid services in your province. In addition, some provinces offer a do-it-yourself discharge kit. To read more, go to:. Once a bankruptcy order has been made against you, your creditors cannot pursue you for payment. The trustee is responsible for payments. Once you're bankrupt, the Official Receiver, or appointed trustee, can sell your assets to pay your creditors.
Certain goods aren't treated as assets for example:. If you own your home, you might have to sell the property. This will depend on who owns the property, the value of the home, and whether the property is worth more than your mortgage. It may be possible for the joint owner or family and friends to make an offer to the official receiver to buy out your share of the equity.
This is helpful if there is little or no equity. The Official Receiver can look at your income taking into account expenses such as your mortgage, rent and household bills and decide if payments should be made to your creditors.
You might be asked to sign an 'income payments agreement' to pay fixed monthly instalments from your income for three years. If you don't pay or if you don't sign the agreement voluntarily , the Official Receiver can apply for an income payments order from the court to order you to pay.
This will run for at least three years from the date of the order. If your circumstances change, you'll need to tell the Official Receiver, so they can review these arrangements.
You'll still have to meet ongoing commitments such as rent or new debts after you become bankrupt. The Official Receiver or a trustee in bankruptcy can make other applications to the Court following a Bankruptcy Order. They include:. Even after the bankruptcy period, you may find it difficult to get credit. The Official Receiver does not send any form of notice to credit reference agencies.
The agencies pick up information from other sources such as the Insolvency Register, bankruptcy advertisements in newspapers and the Enforcement of Judgements Office. Details of your bankruptcy are also kept on the Insolvency Register which is maintained by the Bankruptcy and Chancery Office at the High Court and contains records of all insolvencies in Northern Ireland for the last ten years. Bankruptcy normally lasts for one year. Once you have filed, the bankruptcy trustee assigned to your case will arrange for a meeting of creditors, also known as a meeting for the section of the bankruptcy code where it is mandated.
This is an opportunity for the people or businesses that you owe money to ask questions about your financial situation and your plans, if any, to repay them. Your case will be decided by a bankruptcy judge, based on the information you have supplied. If the court determines that you have attempted to hide assets or committed other fraud, you may not only lose your case but also face criminal prosecution.
After you have filed for bankruptcy—but before your debts can be discharged—you must take a debtor education course, which will provide advice on budgeting and money management. Again, you will need to obtain a certificate showing that you have participated.
You can obtain a list of approved debtor education providers from the bankruptcy court or from the Justice Department. Assuming the court decides in your favor, your debts will be discharged, in the case of Chapter 7. In Chapter 13, a repayment plan will be approved. Having debt discharged means that the creditor can no longer attempt to collect it from you.
Both types of individual bankruptcy have some negative consequences. A Chapter 7 bankruptcy will remain on your credit record for 10 years, while a Chapter 13 bankruptcy will generally remain for seven years. Note, too, that there are limits on how often you can have your debts discharged through bankruptcy. For example, if you have had debts discharged through a Chapter 7 bankruptcy, you must wait eight years before you can do so again.
Unlike corporations and partnerships, individuals can file for bankruptcy without an attorney. It's called filling the case "pro se. Even the Internal Revenue Service is sometimes willing to negotiate. You may be able to reduce the amount you owe in taxes or spread your payments out over time.
Bankruptcy is sometimes the best way to get out from under crushing financial burdens, but it is not the only way. There are alternatives that can often reduce your debt obligations without the messy consequences of bankruptcy. Negotiating with your creditors, without involving the courts, can sometimes work to the benefit of both sides. Rather than risk receiving nothing, a creditor might agree to a repayment schedule that reduces your debt or spreads your payments over a longer period of time.
If you are unable to make your mortgage payments, it's worth calling your loan servicer to find out what options you might have, short of filing for bankruptcy.
Those could include forbearance , which will allow you to stop making payments for a specified time, or a repayment plan designed to stretch smaller monthly payments over a longer period. Another option might be loan modification , which will change the terms of your loan such as lowering the interest rate on a permanent basis, making it easier to repay. However, beware of unsolicited offers from companies claiming that they can keep your home out of foreclosure.
They may be nothing more than scam artists. This article might help: What happens if you transfer property before filing bankruptcy?. I am a cosigner on a vehicle, and I am filing for Chapter 7.
How do I put that when I am listing One of the forms you will file with the bankruptcy court is called the Statement of Intention. In this form, you tell the court what you plan to do with property that is securing a debt you owe, like real estate or a vehicle. If you own your vehicle but are still paying on the loan, you have a few options on how to deal with it in Chapter 7 bankruptcy.
You can reaffirm the debt , keep your vehicle, and continue making payments. This means the debt will not be discharged and you will continue making monthly payments during and after bankruptcy.
If you miss future payments the lender will have the right to repossess the vehicle and possibly try to collect on any deficiency between the balance you owe and the amount they get when selling the vehicle. If you select this option in your Statement of Intention, your car lender will send you a reaffirmation agreement for you to complete and return. In some bankruptcy cases a reaffirmation hearing will be scheduled. If you choose to surrender your vehicle, then it will be repossessed and the debt will be discharged in your bankruptcy.
Filers with high car payments they can't afford often choose to surrender their car to get out of the debt. The automatic stay stops creditors from repossessing a vehicle right after a bankruptcy case is filed. However, the stay expires 45 days after the meeting of creditors if the filer doesn't enter a reaffirmation agreement or redeem the property.
Creditors can then repossess the vehicle without first filing a motion for relief from the automatic stay. To redeem a vehicle in bankruptcy means to pay the lender the value of the car. To complete a redemption you will have to determine the vehicle's value and be able to pay that full amount.
If your vehicle is worth significantly less than the amount you owe, consider redemption by getting a private loan from a family member or friend, or exploring a redemption loan at redemption. This option requires that you file a Motion to Redeem with the bankruptcy court. The redemption must be approved by the bankruptcy judge. You may have to negotiate the value of the vehicle with the original lender. You can do this either before or after you file the motion. The judge can decide the value of the vehicle if you and your lender can't agree on it.
If you lease your vehicle , you have different options on how to deal with your vehicle in Chapter 7 bankruptcy. In your Statement of Intention you can choose to assume the lease to keep the car and continue making payments. Or, you can reject the lease, give back the car, and not have to make anymore payments on the lease. Car loans are handled differently in Chapter 13 bankruptcies.
Filers are able to keep their vehicle and continue making payments through their Chapter 13 bankruptcy repayment plan. If they don't want to keep the vehicle, Chapter 13 filers also have the option to surrender the vehicle. Your bankruptcy forms are signed under penalty of perjury.
When you file, you're declaring that the information in your bankruptcy forms is true and correct to the best of your knowledge. If you accidently leave something out or make a mistake, you'll need to make changes to your forms. This is done by filing an amendment with the court. You might need to file an amendment because you forgot to list an asset or a creditor , you need to add information that was originally missed, you change your mind about signing a reaffirmation agreement, or the trustee requests that forms be amended.
Remember that the automatic stay stops creditors from being able to contact you or try to collect from you after you file for Chapter 7 or Chapter 13 bankruptcy. Even collection phone calls must stop immediately.
Also, after you file bankruptcy your credit cards will be shut down.
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