Dealing with bankruptcy can be painful. However, you will come across situations where filing for bankruptcy would seem like the only solution available. At the time of filing for bankruptcy, you should also have a basic understanding of the different types of bankruptcy that you will have to deal within Canada.
Bankruptcy in Canada can be divided into three different categories. Let’s deep dive and take a look at those three different types of bankruptcy.
- Personal bankruptcy
Personal bankruptcy can be considered as the most common type of bankruptcy that you can find in Canada. The exact reason that leads you towards personal bankruptcy vary. The most common reasons behind personal bankruptcy include loss of income, not being able to reduce the debt payments, relying on credit for day to day expenses, and having maxed out the borrowing potential. It is extremely common among individuals.
While dealing with personal bankruptcy, you have several types of discharge. Out of them, absolute can be considered as the best outcome that you can end up with. That’s because you will be able to get yourself released from all types of legal obligations so that you can repay your debt. However, you will not be able to get rid of some of the mandatory obligations, such as fines, child support, and alimony. Or else, you can go ahead with conditional discharge type, where you will have to complete certain conditions to get out of debt.
- Small business bankruptcy
Small business bankruptcy is the second type of bankruptcy that you can find in Canada. It is quite similar to personal bankruptcy. If you are running a business under sole proprietorship, this is the type of bankruptcy that you will have to deal with.
However, you will only be able to go ahead with small business bankruptcy if your company is not incorporated. In case if the business is incorporated, the process will become a challenging one. In such a situation, the conditions can be different. In fact, you will come across the need to locate a trustee to go ahead and file business bankruptcy.
You will be provided with the four discharge types associated with personal bankruptcy at the time of filing for small business bankruptcy as well.
- Corporate bankruptcy
Corporate bankruptcy is the last type of bankruptcy that you have to deal with Canada. In here, you will need to seek the assistance of a trustee, who specialize in filing corporate bankruptcy-related cases. That’s because corporations are large scale legal entities. They are independent as well. Hence, the business owners are provided with protection from liability. The assets of the business will be fortified, but the personal assets of the business owners will not be. However, there can be exceptions to this as well. Therefore, it is important to work along with a bankruptcy lawyer and then proceed with corporate bankruptcy cases to avoid frustration and end up with the best results. In case you have the credit or debt issues visit www.gtacredit.com or call 416 650 1100