There is a drawback associated with residing close the United States as the biggest economy in the world. Canadians in search of local bankruptcy procedures may often get confused with American terminologies and requirements. A very good example is the utilisation of Chapter 7 and Chapter 13 Bankruptcy.
Bankruptcy-Canada explains the concept of bankruptcy in Canada herein elucidated.
America’s Chapter 7 versus Canada’s Personal Bankruptcy Jurisprudence
Whenever an individual is undergoing a financial mess in the United States, this individual can file personal bankruptcy, according to Chapter 7, Title 11 of the United States Code. This is now regarded as Chapter 7 bankruptcy. Debt.org explains about bankruptcy in US.
The Bankruptcy and Insolvency Act of Canada or simply BIA relates to bankruptcy in Canada.
Chapter 13 versus Consumer Proposal
Chapter 13 is an aspect of the law of the United States that enables individuals to manage and resolve their debts. This is known as the Consumer Proposal in Canada. The management or resolution is a plan where an individual settles all debts owed within a period of 5 years. This plan was created for those who have difficulty paying their debt fully and to enable them to desist from filing for bankruptcy.
Bankruptcy Lawyer versus Bankruptcy Trustee
The Bankruptcy procedures in US are different from Canada. A significant step in the US is to hire an insolvency lawyer before Chapter 7 or Chapter 13 Bankruptcy can be filed. The lawyer is in charge of organising and providing the required documents. These documents will be required to formally apply in Court in order to get your plan approved. Creditors are also allowed to show up in court, offer an alternative proposal agreement before the court approves and decrees an order and delegate your file to the Bankruptcy Trustee.
Debtor must personally appear at the office of the Bankruptcy Trustee in Canada when filing personal bankruptcy or consumer proposal. The Lawyers and the Court should show their attention in complicated cases after filing. (This agency handles over 3000 cases annually. The bankruptcy trustees and bankruptcy attorneys might only become involved in about 50 cases every year). The procedure in Canada is to ensure a reduced cost associated with filing bankruptcy or a consumer proposal so that most of your funds can be diverted into your debt repayment.
For residents of Canada in need of debt relief, you have to find out personal bankruptcy and consumer proposal. After you search Chapter 7 or Chapter 13 bankruptcy (11 or 12), there is a chance that you are on a American bankruptcy search page. Therefore, you need to modify your search parameters to match with Canadian Bankruptcy process.