Bankruptcy / Insolvency

Email: D. Lint

If you are unable to cope with your monthly financial situation you may be able to assist yourself by reorganizing your own monthly budget and debt obligations. If self-help does not solve your financial difficulties there are other options.

Credit Counselling Services of Alberta (CCSA) administers the Orderly Payment of Debts Program (OPD). Under OPD, you pay your unsecured creditors by installments over a period of time. CCSA assists you in developing a payment schedule and a Court Order is obtained to protect you from collection action by your creditors so long as you honor the payment schedule. Your monthly payment is made to CCSA, who in turn distributes the payment to your creditors. You may contact CCSA at 1-888-294-0076 to obtain more information.

A Trustee in Bankruptcy can also assist you in making a Consumer Proposal to your creditors. The form of your Proposal will depend on your particular circumstances. It may ask your creditors to reduce the total amount which you owe, ask for extensions of time to pay the amount owed, or ask them to reduce monthly payments. A Proposal cannot offer the creditors less than what they would receive in a bankruptcy but a proposal, accepted by your creditors and performed by you, will avoid your being forced to make an Assignment into Bankruptcy.

If neither OPD or a Consumer Proposal are workable alternatives, your last resort is to make an Assignment into Bankruptcy.Like the other options, while in Bankruptcy your unsecured creditors cannot garnishee your wages or seize your assets. Your obligations to secured creditors, (creditors holding mortgages or liens on your property), must be kept up to date. Subject to the rights of secured creditors, you do not lose all of your assets in a Bankruptcy. Alberta law declares specific assets to be "exempt" from your creditors' claims and you are entitled to retain those assets. The Bankruptcy process ordinarily takes 9 months and during that time you must report to your Trustee your monthly income and expenses. Depending on the amount of your income you may be obliged to pay part of your income to your Trustee for the benefit of your creditors. When you obtain your Discharge from Bankruptcy you have no legal obligation, subject to some exceptions, to pay any of your pre-bankruptcy debts.