If you become bankrupt you will be required to perform various duties in order to receive your discharge and be released from your debts.
If you don’t perform your duties
Canada’s Bankruptcy and Insolvency Act sets out your duties in section 158 and are both specific and general. General, for instance, by requiring you to be reasonable. If you do not comply with your duties you could find yourself in more difficulties including not receiving your discharge, creditors being able to pursue you again, being guilty of an offence, being fined, and possibly imprisoned.
Know your duties in advance
If you decide on bankruptcy, be sure to know what is required of you in advance. This includes:
- be reasonable.
- your assets – inform your LIT about what assets you have and provide them to your LIT when requested. If your LIT requests, make a list of those assets. If you are self-employed, it is a common request that you list your tools of trade. if your LIT needs help dealing with your assets you are to provide assistance.
- credit cards – give all your credit cards to your LIT for destruction.
- paperwork – your LIT wants a lot of documents from you including ID, papers regarding your assets, tax returns, insurance paperwork, bills and agreements with your creditors, separation agreements, court orders, bank statements, monthly reports of your income and expenses, etc.
- examination – you must attend for examination under oath if a request is made of you.
- statement of affairs – provide to your LIT the information s/he needs to prepare your statement of affairs, sign it and swear it to be true.
- transfers – inform your LIT of all assets you sold, disposed, or transferred in the last 12 months, what those assets were worth at the time, how much you received, what you did with the proceeds, and to whom. Also inform your LIT if in the last 5 years anything was sold or transferred for less than its fair market value.
- meetings – if requested, you are required to attend whatever scheduled meetings with your LIT or your creditors. This includes two counselling sessions.
- residence – keep your LIT informed where you live.
- pay monies – you may also have to pay monies in order to receive your discharge. This can be the amount you agreed to pay when you hired your LIT, the amount you agreed to pay in order to re-purchase certain assets back from your LIT, or your surplus income.