Consumer Services

As you may have noticed, there are several different solutions to over-indebtedness. It is important to consult a bankruptcy trustee to conduct a thorough assessment of your situation. This will allow you to determine the solution that best suits your needs and financial circumstances. Many people face financial difficulties, and there is no single magical or universal solution that applies to everyone. Everything depends on a series of factors and variables that must be examined by an insolvency expert.

Personal bankruptcy involves the liquidation of the debtor's assets for the benefit of creditors. This becomes necessary when an individual has significant debt and lacks the income to maintain the payment structure of a personal proposal. In some cases, bankruptcy can lead to the loss of real estate, jewelry, cars, antiques, and other types of assets. Your bankruptcy can also financially affect other people. For example, if your parents co-signed a car loan for you, they could be held responsible for a portion of that debt if you declare bankruptcy. It is also important to know that bankruptcy damages your credit record. Bankruptcy negatively impacts your credit report for several years and can affect your future borrowing capacity. If a bankruptcy appears on your credit record, creditors might refuse to grant you credit or decide to offer you higher interest rates and less favorable terms.

A first bankruptcy generally affects your credit score for 6 to 7 years, while a second bankruptcy remains on your record for 14 years. Fortunately, you can rebuild your credit after bankruptcy, especially if it is your first time. Furthermore, following your declaration of bankruptcy, your trustee will provide you with advice on how to better manage your finances.

The main difference is that with a personal proposal, once filed and accepted by creditors, assets can be retained. They are therefore protected from seizure. A proposal can extend for a maximum of 5 years, whereas a first bankruptcy is typically finalized within 9 months.

If it is your first bankruptcy, the process can last between 9 and 21 months. If no one opposes your bankruptcy, your discharge will occur 9 months after your file is opened. However, if you have surplus income, the discharge will occur after 21 months. If it is your second bankruptcy in Quebec, the process lasts a minimum of 24 to 36 months. For a third bankruptcy (or more), a court hearing will take place 12 months after your file is opened. During this hearing, the duration of the bankruptcy will be determined. The duration is generally 12 to 36 months.

The main non-dischargeable debts are: - Child support or spousal support arrears; - Fines of a penal nature (e.g., traffic tickets); - Debts or obligations resulting from fraud, false declarations, etc.