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Here are the answers to the most common Kitchener Bankruptcy FAQ (Frequently Asked Questions):
1. What does it cost to file a Kitchener bankruptcy?
The cost depends on your family size, monthly income, and various monthly expenses. As your income increases above the limits set by the federal government, your monthly bankruptcy payment will increase. Your Kitchener bankruptcy trustee will explain these costs to you in detail before you file, and will arrange a payment plan including pre-authorized payments timed with your paycheque to ensure that you can make your bankruptcy payments as required.
2. What do I get to keep in a Kitchener bankruptcy?
If you go bankrupt you are allowed to keep one motor vehicle worth up to $5,650, household furniture worth up to $11,300, and personal belongings and jewellery worth up to $5,650. You are also allowed to keep equipment used to earn a living, called tools of the trade (such as a hammer if you are a carpenter) worth up to $11,300. These values are determined based on liquidation value, not what the goods would be worth to purchase new.
3. I have a loan against my car. Can I keep my car if I go bankrupt?
Since we don’t have a subway system in Kitchener, many people use a car to get to work, so this is one of the most frequently asked questions about bankruptcy in Kitchener. If your car is worth less than the amount still owing, and if the lender agrees, you could keep your car, as long as you continue to make your monthly payments. However, some banks have a policy that if you go bankrupt they will take your car, even if your payments are up to date. Banks change their policies frequently, so it is essential that you bring your car loan documents to your trustee so that they can advise you on what is likely to happen to your car if you go bankrupt in Kitchener.
4. Can I keep my house if I go bankrupt?
This is another common question, since for many residents of Kitchener-Waterloo owning a home is their number one financial goal. It is possible to keep your home if you go bankrupt. You will be required to have your house appraised, and provide the trustee with your mortgage balance owing. If the house is worth about what remains owing on the mortgage, the trustee will not take your house if you go bankrupt, and generally the mortgage company will allow you to keep making your monthly mortgage payments. If the house is worth significantly more than the balance owing on the mortgage, to keep your house you would be required to pay to the trustee the net equity in your house.
5. Who will find out that I went bankrupt?
Your bankruptcy is reported on your credit report, so for the next seven years anyone who runs a credit report on you will know that you went bankrupt. All of your creditors, and Canada Revenue Agency are also notified of your bankruptcy, as is the Office of the Superintendent of Bankruptcy. If you are being garnisheed, the court and your employer are also notified of the bankruptcy so that the garnishment can be stopped. If you are not being garnisheed, and if you provide your trustee with all required information, it is generally not necessary for the trustee to contact your employer.
For more information, or to get started, please read our Kitchener Bankruptcy Help article.
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