A Bankruptcy is a legal process which provides a debtor (who is unable to meet his or her financial commitments to their unsecured creditors) with a process for eliminating his or her debts in an orderly manner. The process is governed by the Canadian Bankruptcy and Insolvency Act..People who use a Bankruptcy are in essence declaring to their creditors that they are unable to pay off their debts when they become due. This arises either because the debtor has insufficient income or assets (that are not secured) to meet these obligations.
Which Debts Can Be Included In A Bankruptcy?
Credit card debts
Store credit cards
Bank loans and unsecured lines of credit
Amounts owing to suppliers for utilities and hydro
Unpaid income tax debt.
Other unsecured debts
Debts That Don't Qualify For A Bankruptcy
Child support payments
BStudent loans that are less than seven years old
Any debt incurred in a fraudulent manner