How a Personal Bankruptcy in Pickering Can Affect You

Filing for personal bankruptcy in Pickering may be the first thing you think of when you 
suddenly figure out that you can no longer pay your debts and creditors are starting to 
harass you. While it might turn out to be the right solution for your debt problem, you have 
to understand how the process works and get a clear picture of how it will affect you and 
your family in the years to come.

Here are some important things you need to know.

Bankruptcy can definitely help eliminate debts, but it will not get rid of all types of debt. It can 
erase most of your unsecured debt, such as the following:

• Credit card balances
• Unsecured  lines of credit
• Unsecured personal loans
• Accounts in arrears or in collection, such as income taxes and municipal house taxes
• Unpaid utility bills
• Medical bills
• Insurance premiums past due
• Income tax debts, HST and other tax debts
• Student loans that are more than 7 years old

Some debts cannot be included when you file for bankruptcy in Pickering and which you are 
still obligated by law to pay. This include:

• Secured debts, like mortgage loans, home equity loans and car loans.
• Student loans less than 7 years old
• Child and spousal support payments
• Debts incurred by fraud or theft.
• Criminal fines or any penalties imposed by the Court

Valuable assets that you own can also be affected. Depending on where you live in Canada, 
there are certain assets that can be exempt from seizure and there are some that you may 
lose when you go bankrupt.

If you live in Ontario, for example, you may be allowed to keep these assets:

• All personal clothing for you and your family
• Household furnishings and appliances up to $13,150
• Any vehicle up to $6,600 in value
• Up to $11,300 tools of the trade that are used to earn a living or run a business
• Your home if the equity does not exceed $10,000
• Some types of  life insurance products
• Funds held in an RRSP, RRIF and DPSP (Deferred Profit Sharing Plan) savings for 
  more than 12 months

These are some non-exempt assets you may have to give up when you file bankruptcy in 
Pickering Ontario:

• RRSP contributions made in the last 12 months;
• Home equity over $10,000
• RESPs, TFSAs and other savings plan
• Tax refunds
• Lottery winnings or inheritances
• Gifts, transfers of property or special treatment to creditors
• Any income above a certain threshold, surplus income

You will also have duties to perform during your time in bankruptcy and you will need to 
perform them all in order to get discharged. If you fail to perform all duties, you cannot be 
discharged and your debts cannot be cancelled.

Some important duties you will have to do include:

• Send proof of your income to your trustee every month.
• Make payments to your trustee every month for any surplus income.
• Provide your income tax information.
• Attend two credit counselling sessions for you to learn budgeting and money 
  management skills.
• Attend meetings with your creditors as requested.

There is a lot of information to consider before filing for personal bankruptcy in Pickering. 
It is certainly not a decision that you should make lightly. It’s important that you discuss 
with a Licensed Insolvency Trustee to get more information and find out if there are other 
options and solutions that could work better for your financial circumstances so you can 
decide on the best solution for you and your family.