There are a number of tasks that you must complete during bankruptcy.
Duties at the start of bankruptcy:
As soon as your bankruptcy begins, you must surrender your credit cards and all non-exempt assets to your licensed insolvency trustee.
For most personal bankruptcies, there is no creditors’ meeting. A meeting of creditors is held if requested by the Superintendent of Bankruptcy or by the creditors with an aggregate of at least 25% of the proven claims. These meetings are usually held at the office of the trustee.
You must give the licensed insolvency trustee your T-4 slips and any other information necessary to complete any outstanding tax returns as of the date of bankruptcy. When you file for bankruptcy, the day you file is considered the end of your fiscal year so that in the year you file bankruptcy you actually have to file two different tax returns. All income tax debt will be included in your bankruptcy, although you may be required to pay it separately. Any refund to which you are entitled will be considered an asset and included in the distribution of funds to creditors.
Each month, you must report your household income and living expenses and any change in your family situation to your licensed insolvency trustee, along with copies of your pay stubs. Your licensed insolvency trustee will give you the appropriate forms to fill out in order to provide him or her with this information.
From your income and expenses, your trustee determines if your net income was higher than the limit allowed by law for you to live. If you have any “surplus income”, you will be required to make a payment each month to the licensed insolvency trustee. In a bankruptcy the more you earn, the more you are required to contribute to your estate for the benefit of your creditors.
For most people, it is the monthly income reporting that requires the most homework. However, the monthly income and expense reporting throughout bankruptcy is usually very helpful for most people, as they now keep track of the money coming into the household, how they spend it and when.
To be eligible for an automatic discharge after 9 months, you must participate in 2 credit counseling sessions. The counseling can be one-on-one, between you and your trustee, or if you prefer, it can be in a group consisting of other bankrupts and your licensed insolvency trustee.