Bankruptcy is a legal process, governed by the Bankruptcy & Insolvency Act, applicable to businesses and individuals who have overwhelming debts and cannot repay them as they are due, causing legal actions from their creditors.
Bankruptcy is considered a viable solution when a business or individual has exhausted all options of repayment. They can then seek relief from all of their unsecured debt by filing a bankruptcy notice. This will stop all legal action against the business or individual from their creditors.
To file for bankruptcy the individual or business must meet the following criteria:
- Owe at least $1000 in debt.
- You do not have enough assets to pay off your debt.
- You cannot make the payments when they are due.
Businesses and Individuals that declare bankruptcy must submit all of their assets to a Licensed Insolvency Trustee who then works with the creditors to come to a financial resolution.