What to expect if you file for bankruptcy

Summary

After talking with a Licensed Insolvency Trustee, David and Julie decide that bankruptcy is the most appropriate option to handle their debts. The trustee explains the way their creditors will be paid and what they will need to do during the bankruptcy process.

Transcript

(Soft music begins and continues in the background throughout the video. The blank screen has the Government of Canada logo at the top left and the Canada wordmark on the bottom right. A broad bar of dark grey opens up between the logo and wordmark, revealing in the centre the title, "What to expect if you file for bankruptcy." The title collapses, the logo and wordmark fade out, and the screen is blank again. The words "David & Julie" appear along the bottom of the screen.)

It's been a tough time for David and Julie

(Above the names, appears an illustration of David's face sporting a mustache and beard. He's smiling. To his right appears an illustration of Julie, with long hair and glasses. She's smiling too. All the people in the video are represented by illustrations of their faces. They both blink occasionally.)

—David has been laid off,

(David and Julie stop smiling.)

credit card payments have slipped and the other bills are also falling behind.

(David and Julie and their names move left and off the screen, leaving the screen blank.)

Thinking bankruptcy may be an option, he sits down

(A line illustration representing a computer monitor appears bit by bit on the screen. A search bar displays the word "bankruptcy.")

and begins an online search to get information about the topic.

(The computer monitor zooms out on the bottom of the screen.)

He finds the Office of the Superintendent of Bankruptcy Canada,

(The words "Office of the Superintendent of Bankruptcy Canada" appear one letter at a time.)

the federal organization that licenses and regulates Licensed Insolvency Trustees, professionals who can provide the information he needs.

(The title slides right and disappears off the screen.)

Using the search tool,

(The words "Find a Licensed Insolvency Trustee" and two search bars move on to the screen from the left. The top search bar says "Name" and the bottom search bar says "City.")

David finds a Licensed Insolvency Trustee in his area

(A search button appears below the search bars, with a cursor ready to click on it.)

and makes an appointment.

(The search button is clicked. Then the title, search bars and search button move up and off the screen. The words "Name" and "City" slide right and off the screen. The cursor drops down and off the screen.)

Seeing a Licensed Insolvency Trustee is a great first step.

(An illustration of a man's face, the trustee, pops up in the centre of the screen. He has short hair and glasses. He blinks occasionally.)

The trustee will explain the options to Julie and David,

(The trustee smiles as four speech bubbles pop up around him. The bubbles contain the numbers 1, 2, 3 and 4, representing the options. A white dot creates a trail of blue that partly encircles the numbers.)

giving them the information they need to make a well-informed decision.

(The trustee returns to a neutral expression. The blue trails rotate around the numbers.)

After an open and frank discussion about what they earn, what they own and how much they owe, Julie and David decide

(The speech bubbles zoom out and disappear, leaving only the trustee.)

that bankruptcy is, in fact, the most appropriate choice.

(The trustee zooms out and disappears too.)

The trustee then files the bankruptcy application

(A file folder with a sheet showing and labelled Office of the Superintendent of Bankruptcy Canada swings up from the bottom of the screen, straightening out before resting in the centre.)

with the Office of the Superintendent of Bankruptcy Canada.

Once the application is filed, the trustee will take care of legal obligations

(The file folder zooms out to the left to be small enough to insert itself into an old-fashioned mailbox that appears from the bottom of the screen. As the folder is inserted, the flag on the mailbox raises up to indicate that the mailbox contains mail.)

and Julie and David will stop making payments directly to their creditors.

(The mailbox zooms in and drops down and off the screen, leaving it blank.)

As the trustee is now in charge of the file,

(A red circle with a white outline fades in and then transforms into a stop sign. The words "Legal actions stop" appear below the stop side one letter at a time.)

any and all legal actions against them will stop and no one will be able to garnish their wages.

(The octagonal stop sign changes back to a circle and fades out. The words drop and fade out, one letter at a time.)

Julie and David will likely be able to keep

(David and Julie fade in. The term "RRSP" fades in below David and a sofa fades in below Julie.)

some of the things they own, because those assets are protected by provincial and federal laws. However,

(RRSP and the sofa fade out. The words "Some assets may be sold" fades in below David and Julie, with a camping trailer, a motorboat and a painting below the words.)

some assets may be sold by the trustee and the proceeds used to help pay the debts they owe.

Their creditors

(All the screen images drop down and disappear.)

will be notified of the bankruptcy and,

(An image of a computer monitor displaying an envelope pops up. The number 1 appears in the top right corner of the envelope, indicating new email. A cursor moves up and clicks on the envelope, which opens.)

if a meeting of creditors is called,

(A hexagon with an exclamation mark in the middle comes out of the envelope. The computer monitor drops down but the top of the monitor peeks up from the bottom, while the hexagon with the exclamation mark stays centre screen. David appears on the left of the hexagon and Julie appears on the right.)

Julie and David will have to attend.

(David, Julie, the hexagon and the top of the monitor move right and off the screen.)

They will also have to attend two counselling sessions

(A horizontal line near the bottom of the screen comes in from the left, draws an outline of the numeral two in the centre and continues as a horizontal line off the screen to the right.)

to help them get back on their feet financially.

(The line starts to erase from the left, around the number 2 and disappears off the right of the screen.)

Finally,

(The trustee appears on the left of the screen.)

they may have to make payments toward their debt, called "surplus income payments."

(A speech bubble appears to the right of the trustee, with the words "Surplus income payments.")

These payments ensure that people who declare bankruptcy and have sufficient income, contribute to paying off a portion of their debt.

(The speech bubble and the trustee disappear.)

Eventually,

(The word "Debt" appears on screen in bold, all caps, letter by letter.)

their debts will be discharged, relieving them from the obligation of repaying most of the debt they had on the day they filed for bankruptcy.

(The word "Debt" disintegrates, starting with the "t" and moving backward to the "d", with the pieces flying off to the right of the screen.)

While this comes as a relief

(Julie zooms in on the left of the screen and then David zooms in to her right.)

to both Julie and David,

the trustee

also explains that some debts cannot be discharged. These include. . .

(The images fade to a blank screen.)

(A four-item checklist dissolves in, with check boxes on the left and the items on the right. A checkmark is drawn in the box next to the first item, which is "alimony, child support.")

. . .alimony and child-support payments,

(Now the second item on the list, "fines and penalties," is also checked off.)

court-ordered fines or penalties,

(Now the third item on the list, "debt from fraud," is also checked off.)

debts arising from fraud and,

(Now the fourth and final item on the list, "student loans," is also checked off, so that all items on the list are now checked off.)

in some cases, student loans.

(The checklist fades out.)

While the bankruptcy

(Five gold stars appear in a line across the centre of the screen.)

will affect their credit rating for a number of years,

(Starting from the right, the gold stars change to dark grey, with only the first star remaining gold.)

the trustee tells them that once the debt is discharged,

(The stars fade out. The trustee on the left and an industrial crane on the right move in from the left side of the screen. The crane is lifting the word financial and the word "future" is resting on the ground below it.)

they can start to rebuild their financial future.

(The crane gently lowers the word financial to rest on the word "future".)

It's not an ideal situation, but dealing with this does lift a weight off their shoulders.

(The hook for the crane releases the word "financial" and retracts upward, and moves horizontally toward the cab of the crane. The images fade to a blank screen.)

(The screen fills with four boxes. The top left box says: "What to expect if you file for bankruptcy." The top right box says: "Submitting a consumer proposal to your creditors." The bottom left box says: "Understanding the bankruptcy discharge." The bottom right box says: "Bankruptcy and surplus income payments.")

This is one of a series of videos available on our website.

(The boxes dissolve. The URL www.canada.ca appears below a row of five different trustees, who have zoomed in one at a time. They alternate woman, man, woman, man, woman. The Licensed Insolvency Trustee second from the right is the trustee who helped David and Julie.)

The website also includes a searchable database of Licensed Insolvency Trustees—the only professionals who can file a consumer proposal or bankruptcy application in your name—should you wish to contact one for information.

(The screen and the music fade out. The Canada wordmark appears in the centre of the screen and eventually dissolves.)

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