What Do I Need To Disclose To My Bankruptcy Trustee?

Before you file for bankruptcy in Canada, you are required to meet with a licensed bankruptcy trustee to complete a full debt assessment. This assessment serves two purposes:

• it allows the trustee to fully review your situation and provide you with personalized advice regarding your options, and
• it gives you the opportunity to ask questions and to fully understand your options before you make a decision about whether or not bankruptcy is right for you.

The initial bankruptcy assessment is really a chance to get to know you, it’s information gathering.

We want to understand who you owe money to, how much you owe, how much you can afford to pay towards your debt and what assets you might have. With this information we can recommend options to deal with your specific debts.

If you decide to file bankruptcy, at that time you will need to gather information which will be needed to complete the necessary filing documentation (I’ve provided a list at the bottom of this post). 

Do you need to bring this documentation to your first bankruptcy consultation? No. Your trustee will work with you to gather and prepare this documentation. This actually makes people feel a lot better knowing that they don’t have to decide and sign up at that first consultation. 

There are many factors that will impact your decision on whether or not you should file bankruptcy or a consumer proposal so it is important to disclose everything to your trustee, and to ask a lot of questions so that we can give you the best debt advice possible. In addition to providing a basic picture of your financial situation, you should also disclose to your trustee any other factors that will help them to advise you about your options. 

• Do you have a wage garnishment or lawsuit pending?
• Are any of your debts co-signed?
• Are you considering a separation in the future as this may affect who is responsible for debts in a separation.
• If you are off work for medical reasons, or if you expect to be off work in the future, explain your medical situation to your trustee. In some cases it may make sense to delay filing bankruptcy until you return to work.  In other cases, a quick bankruptcy is a better option.  With full information your trustee can help you make the decision.
• If you expected employment or income changes. If you expect to start a new job, or get a raise in the future, discuss it with your trustee.  The cost of a bankruptcy is based on your income, so if your income will be increasing, a consumer proposal may be a better option.  On the other hand, if you expect to be laid off or have your income reduced, that will also impact the bankruptcy process, so you want to be prepared for either possibility.
• If you are a student, how long has it been since you have been out of school?  Your last date of study is important in determining if student debt can be included in a bankruptcy or proposal.

When you are ready to file bankruptcy, information that can help in the preparation of the necessary bankruptcy filing documents can include:

1. A list of all of your debts.
2. Recent statements so you know roughly how much you owe to each creditor
3. A copy of your credit report is a great resource if you don’t know who you owe
4. Details about any assets you own, including a house, car and any investments like RRSPs and RESPs;
5. Your most recent pay stub.
6. A list of your household expenses.
7. Identification, like a birth certificate to confirm the correct spelling of your name
8. Information about your bank account if you want to go on automatic deposit to cover your bankruptcy payments.
9. Copies of your tax returns if you have tax debts.

If you are considering bankruptcy, talk with a Licensed Insolvency Trustee. The initial debt assessment process usually takes between 30 and 60 minutes depending on how complicated your situation and how many questions you may have. At Hoyes Michalos we won’t rush you. You can always book a second, free consultation with our trustees or converse with them via e-mail until you are ready to make a decision about what debt relief option is right for you.

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