Summary Administration | Bankruptcy Protection

If you owe $1,000.00 or more, are generally unable to meet your financial obligations as due, and have a disposable/seizable asset base of less than $15,000.00, a Summary Bankruptcy may be the right tool for you to regain financial control.  Essentially, you surrender your seizable assets to the Trustee, follow a number of rules and regulations as dictated by the Bankruptcy & Insolvency Act, and, in return, obtain a discharge from bankruptcy.  As it implies, the Automatic or Absolute Order of Discharge erases your debt.  While you are in bankruptcy you are fully protected in that a stay of proceedings is invoked.  Lawsuits are prohibited and discontinued, garnishments stop, and your creditors communicate with the Trustee, affording you the ability to re-attain financial comfort.

A Summary Administration is a streamlined process.  There is no notification of your bankruptcy in the newspaper. Usually a meeting with your creditors is not required.  Most often you do not need to attend Court.  Your costs are minimized in that you are not required to attain the services of a lawyer as the federal government has mandated that only Licensed Insolvency Trustees are able to administer this type of debt remedy.

Most individuals have the misunderstanding that they will lose all of their possessions and assets if they file for any type of bankruptcy relief.  This is not true.  There are a number of laws throughout Canada, both federal and provincial, that provide for asset protection with a view to allowing a certain basic standard of living.

Provincial Executions Acts (http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90e24_e.htm), the Pension Benefits Act (http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90p08_e.htm), the Insurance Act (http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90i08_e.htm), and the Bankruptcy & Insolvency Act (http://laws-lois.justice.gc.ca/eng/acts/B-3/) all embody protective mechanisms related to specific assets.  The Executions Act (Ontario) mandates that personal effects, household effects, and a vehicle within prescribed amounts and that do not have liens against them, be protected from seizure including the seizure envisioned in a bankruptcy administration.  If there is no equity in your real property (house or land) and your mortgage is in good standing, your property is protected from seizure by the Trustee.  Your employment income is not seized per se.  Rather, the Bankruptcy & Insolvency Act provides a guideline amount above which 50 percent of your net income is to be voluntarily remitted to the Trustee for the general benefit of your unsecured creditors.  As a result of protective legislation it is most common that you don’t lose any assets simply because you have filed for bankruptcy protection.

A bankruptcy can be a necessary and productive tool when attempting to regain financial control.  In most circumstances, no assets are lost.  A debtor obtains certainty on its cash-flow and is better able to manage and regulate his monthly budget.  Protection and relief from your creditors is provided for by legislation so that you can regain control over your finances.

We have simplified the Summary Administration process.  That is because with guidance from your Trustee a Summary Administration is in fact a very simple process resulting in a discharge of most, if not all, of your financial obligations.  Should you wish to discuss this financial remedy in greater detail, please do not hesitate to contact Jeff directly.