If you’re reading this, chances are you’re struggling with debt that feels unmanageable. Recognizing the problem is the first and most important step. Seeking the right guidance can set you on the path to financial recovery.
For many Canadians facing financial hardship, Bankruptcy is the most effective solution. It provides a structured, legally protected way to eliminate debt and rebuild a stable financial future. If you’re considering filing for Bankruptcy in Manitoba, here’s what you need to know.
What is Bankruptcy?
Bankruptcy is a legal process designed to give honest, hard-working individuals relief from overwhelming debt. The process itself is straightforward, but it’s crucial to determine whether it’s the right choice for your unique financial situation.
The Advantages of Filing for Bankruptcy in Manitoba
Bankruptcy offers immediate financial relief, legal protection, and a fresh start. Here’s how:
- Collection calls and wage garnishments stop immediately. Once you file for Bankruptcy, a Stay of Proceedings takes effect. This means creditors can no longer contact you, freeze your bank accounts, or garnish your wages.
- Debt repayment is based on what you can afford. Your required payments are determined by government guidelines, ensuring you have enough income to cover your basic living expenses. If you earn more than the government’s set threshold, you only need to pay half of the surplus to your Trustee for your creditors—the rest stays with you.
- A quicker and more affordable option than other debt relief programs. Unlike a Consumer Proposal or a debt consolidation loan, Bankruptcy is often the fastest and least expensive way to clear your debts—especially if your income is unstable or your financial situation is likely to change.
- Debt is erased, allowing you to rebuild your credit sooner. Most unsecured debts—such as credit card balances, personal loans, overdue bills, payday loans, and tax debt—are fully discharged when your Bankruptcy is completed, typically within nine months for first-time filers.
- You have the option to reassess secured debts. Bankruptcy applies to unsecured debts only, but it gives you an opportunity to decide whether to keep secured debts, like a car loan or mortgage. If you owe more than your car or home is worth, you may choose to surrender the asset and have the remaining balance discharged along with your other debts.
- You will receive professional financial counseling. During Bankruptcy, you’ll attend two mandatory financial counseling sessions. These sessions provide valuable tools for budgeting, saving, and preventing future financial difficulties.
Important Considerations Before Filing for Bankruptcy
While Bankruptcy offers significant relief, it’s important to be aware of certain limitations:
- Some debts cannot be discharged. Child support, alimony, court fines, and student loans (if they are less than seven years old) will not be eliminated by Bankruptcy.
- Your credit report will reflect the Bankruptcy for up to six years. That said, if you’ve struggled with debt for a while, your credit rating may already be low. The good news? You can begin rebuilding your credit immediately after your discharge through on-time payments on secured debts and responsible credit use.
Three Steps to Getting Bankruptcy Advice in Manitoba
Step 1: Recognize the Signs That You Need Help
If you’re experiencing any of the following, it may be time to seek professional financial assistance:
- You are missing mortgage or loan payments.
- Your credit cards are maxed out.
- You can only afford minimum payments on your debts.
- You have taken or considered taking a payday loan to cover expenses.
- You are receiving collection calls or having wages garnished.
Step 2: Contact a Licensed Insolvency Trustee (LIT)
Only Licensed Insolvency Trustees (LITs) are legally authorized to file Bankruptcies and Consumer Proposals in Canada. They are highly trained, government-regulated professionals who can provide honest, unbiased advice about your debt relief options.
A Trustee’s role is not just to file paperwork—they help you explore all possible solutions, including:
- Budgeting and financial counseling
- Debt consolidation options
- Consumer Proposals (an alternative to Bankruptcy)
- Bankruptcy, if it’s the best option for your situation
When selecting a Trustee, choose one who is accessible and convenient for in-person meetings. If you live in a remote area, the process can be handled through phone, email, and mail.
Step 3: Meet with Your Licensed Insolvency Trustee
Your first consultation is free—and at LCTaylor, it’s also unlimited in time. We take the time to fully understand your financial situation and provide a tailored solution that works for you.
During this consultation, you will:
- Provide an overview of your financial situation (debts, assets, income, and expenses).
- Ask any questions you may have about Bankruptcy or other debt relief options.
- Receive expert advice on the best course of action for your financial future.
If Bankruptcy is the best option for you, your Trustee will walk you through the filing process and ensure you understand your rights and obligations.
Take Control of Your Financial Future Today
If you’re struggling with debt, the most important thing you can do is take action. The sooner you seek professional help, the more options you’ll have available.
Bankruptcy is not the only solution—but it might be the right solution for you. Find out your best path forward by speaking with a Licensed Insolvency Trustee today.
Contact us today to learn more about filing for Bankruptcy in Manitoba and take the first step toward financial relief.
Leigh C. Taylor, LIT
