The cost of bankruptcy in Toronto, Ontario is largely dependent on your personal situation – although not completely since there are some common expenses that you should certainly take into the account when trying to determine the cost of filing bankruptcy in your case.

Below we provide a summary of some of the costs you can expect in regards to a bankruptcy process in Toronto, but for a thorough explanation of all the costs, we recommend that you interview several Trustees in your area.

Costs in a Bankruptcy Process in Toronto

First of all, when filing personal bankruptcy you will have to make a contribution to your bankruptcy estate to cover administrative costs, court fees, communication and government filing fees.

Next, you must pay a share of your “surplus income” into your estate. If you or your family earn over a certain amount each month, you will lose a fraction of your earnings over that limit.

You should also keep in mind that you will lose some of your assets, as well as any tax refunds and GST credits you would normally acquire during the bankruptcy period. You will also lose any windfalls (lottery winnings, inheritance) you receive throughout the bankruptcy.

For the most part, your total cost of filing bankruptcy will be determined mostly by your monthly income, your family size, and your assets.

Determining the actual final numbers can be difficult, so it’s recommended that you speak directly with a professional. Please note that an initial consultation is normally at no charge.

A trustee in bankruptcy is a person licensed by the Superintendent of Bankruptcy to handle the process of proposals and bankruptcies. Only licensed trustees can provide bankruptcy services. Although they represent creditors (those who are owed money), trustees are officers of the court who also advise debtors of their options with respect to debt problems.

If a person or company is unable to meet its debt obligations, it is said to be insolvent.

When that happens, there are three main Bankruptcy options:

• Bankruptcy – This is where assets of an individual or company are liquidated and the proceeds are given to people who are owed money. (Some assets are exempt from liquidation, depending on the province.)
• Proposal – This is where an offer is made to people who are owed money in an effort to settle the debt.
• Receivership – This usually happens to companies, not individuals. This is where a secured creditor (often a bank or other large creditor represented by a receiver) comes in and generally takes control of the assets of the company.

There are also three main individuals in the process:

• Debtor – The person or company that owes the money.
• Creditor – The person or company that is owed the money.
• Trustee – The people who are licensed to administer the proceedings.

When this happens, Bankruptcy Trustees then;

• advise debtors of their options with respect to debt problems;
• prepare official documentation that is both filed with the Superintendent of Bankruptcy and used to notify creditors;
• ensure the validity of claims;
• ensure that debtors are provided with mandatory counselling and access to mediation services if there is a dispute regarding any income they are required to contribute;
• sell the debtor’s assets (except those that are exempt from seizure) and hold the proceeds in trust for distribution to the creditors;
• assess the debtor’s conduct both before and during a bankruptcy, as well as the cause(s) of the bankruptcy; and
• make an application for a debtor’s discharge (in the case of individual debtors).

No matter which form you choose, it is important to understand what bankruptcy can and cannot do for you. It is very good for eliminating credit card debt, but some debts are considered obligatory and very rarely are discharged. Tax debts, student loans, child support, and spousal support all are such debts. If your debt load is comprised of such factors, look for an alternative to bankruptcy by calling a Toronto Bankruptcy Trustee and asking as many questions as you need to feel comfortable.