NS Bankruptcy Site Logo

Nova Scotia Bankruptcy FAQs: NS Bankruptcy FAQs.

Questions and Answers about NS Bankruptcy and NS Personal Proposals.

You've heard the myths about bankruptcy. Get the Facts!

How do I know if I am in financial trouble?

Is bankruptcy my only option?

How do I file personal bankruptcy?

Will my spouse be affected?

How much does it cost to declare bankruptcy?

If I go bankrupt, will I lose everything?

Will my creditors stop harassing me?

What happens if someone co-signed a loan for me?

What happens to my wages during a bankruptcy?

Will I still owe income taxes after I declare bankruptcy?

What debts are erased in a bankruptcy?

How long will I be in bankruptcy?

Who will find out that I have declared bankruptcy?

What happens during the bankruptcy?

Can a bankruptcy help alleviate the terrible stress I am under?

What if I have the cash flow to make a proposal?

Will I end up with a better credit rating if I use a credit counsellor?

Will I ever get credit again?

How do I prepare for my initial consultation with the Trustee?

 

 

How do I know if I am in financial trouble?

questionsThere are certain “warning signs” that may indicate you are in financial trouble, such as:

  • Receiving frequent calls or letters from creditors or collection agencies.
  • Having no savings.
  • Spending all your money before payday.
  • Stalling one creditor to pay another.
  • Buying things impulsively.
  • Using your credit cards or other loans to pay for everyday expenses.
  • Failing to budget or make a financial plan.
  • Having your consolidation loan applications rejected.
  • Having trouble making the minimum payments on your credit cards.
  • Not knowing what your real monthly expenses are.

 

Is bankruptcy my only option?

OptionsIf you are in financial trouble, you may believe that bankruptcy is your only option. In many cases there are options other than bankruptcy, including:

  • Proposals,
  • Credit counselling,
  • Third party settlements with creditors,
  • and refinancing.

 

 

 

How do I file personal bankruptcy?

In Canada you can only file bankruptcy through a trustee in bankruptcy.

PowerPoint Presentation: The steps in filing a personal bankruptcy.

In Canada you can only file bankruptcy through a trustee in bankruptcy. Trustees are regulated by the Superintendent of Bankruptcy and are highly trained professionals with stringent codes of ethics.


How much does it cost to declare bankruptcy?

Click the Speaker to hear a Trustee's Comments.

 

In most cases the cost of a bankruptcy is less than $200 a month for nine months.

In a bankruptcy, the costs are set by the government. In most cases the cost will be less than $200 a month for each of nine months. Payment terms can be arranged.

 

 



If I go bankrupt, will I lose everything?

ExemptionsNo, you will not lose everything. The Nova Scotia government has bankruptcy and proposal exemption laws which allow you to keep equity in certain assets.

Equity is the excess that the value of an asset has over any charges or encumbrances against that asset.

For example, if you have household goods worth $10,000 and there is a $6,000 secured debt against them then the equity in the household goods is $4,000. In Nova Scotia the exemption for household goods is $5,000 so in this example you are entitled to the equity of $4,000 and the unsecured creditors cannot take this.


Nova Scotia Bankruptcy Exemptions:

  • Necessary wearing apparel, household furnishings and furniture;
  • Necessary fuel and food;
  • Necessary grain, seeds, cattle, hogs, fowl, sheep and other livestock;
  • Necessary medical and health aids;
  • Farm equipment, fishing nets, tools and implements used in debtor's chief occupation, not exceeding $1,000;
  • Household goods not exceeding $5,000;
  • Motor vehicle not exceeding $3,000;
  • Motor vehicle if required for work or business not exceeding $6,500.

NOTE: Pursuant to the PPSA of NS, A debtor may claim the following items of COLLATERAL to be exempt from seizure BY A SECURED PARTY:

1 motor vehicle not exceeding $6,500 IF the motor vehicle is required for work/to retain employment AND IF the secured creditor does not have a PMSI on the asset (in other words, they took collateral on the asset but did not originally advance the funds to the debtor for the purchase of the asset).

 

Will my creditors stop harassing me?

Click the Speaker to hear a Trustee's Comments.

 

By law, all actions against you must cease once the bankruptcy or proposal documents are filed.

Yes, they will! By law, all actions against a bankrupt must cease once the documents are filed. That means most lawsuits and wage garnishments against you will stop. This does not apply to secured creditors such as banks holding, for example, a lien on a car.

 

 

Will my spouse be affected?

Click the Speaker to hear a Trustee's Comments.

 

Your spouse will not be affected by your bankruptcy if he or she is not responsible for any of your debt.

Your spouse, whether common law or married will not be affected by your bankruptcy if he or she is not responsible for any of your debt (did not sign an agreement or contract for any of your debt). If they have a supplemental credit card they are probably responsible for that debt. Your spouse's credit rating will not be affected by your bankruptcy and any assets in the spouse's name will not be part of the bankruptcy.

If your spouse is responsible for any of your debt or has his own debt then the spouse may have to file bankruptcy too.

 

What happens if someone co-signed a loan for me?

cosignerAnyone who has co-signed a loan for you will still be responsible to make loan payments after you go bankrupt.

 

 

 

What happens to my wages during a bankruptcy?

WagesYou will still continue to receive your wages.

 

 

 


Will I still owe income taxes after I declare bankruptcy?

Tax debt is erased in a bankruptcy.

Tax arrears and most debt is erased in a bankruptcy.

 




What debts are erased in a bankruptcy?

Debt FreeAll debt is erased, upon the debtor being discharged from bankruptcy, except for the following:

  1. Fines imposed by a Court;
  2. Money owing for things stolen;
  3. Things obtained by misrepresentation;
  4. Alimony or maintenance payments.
  5. Award of damages by a court for intentionally inflicting bodily harm or sexual assault.
  6. Student loans if bankruptcy is filed prior to or within ten years after the finish of studies.

 

How long will I be in bankruptcy?

Click the Speaker to hear a Trustee's Comments.

 

In most cases a bankruptcy is over in 9 months, at which time all eligible debt is erased.

For those people who have not been bankrupt before, an automatic discharge will take place after nine months if the creditors, Superintendent of Bankruptcy or trustee have not opposed your discharge and you have received counselling. Occasionally, creditors do object and the matter goes to mediation or is heard before a Registrar or a Judge. The discharge is usually granted where the bankrupt is only earning sufficient income to keep himself and his dependants reasonably provided for. It is the discharge of the bankrupt, with minor exceptions, that cancels the bankrupt's debts. In the event that you have been bankrupt before, your discharge will not be automatic and must be heard before a Judge or a Registrar.  

 

Who will find out that I have declared bankruptcy?

Click the Speaker to hear a Trustee's Comments.

 

Unless you're a prominent person and the filing is picked up by the media, the chances are very good that the only people who will know about a filing are your creditors.

Unless you are a prominent person, in most cases only your creditors will know you have filed for bankruptcy. Most bankruptcies are not published in the newspapers. Newspaper announcements are reserved for corporate and very large personal bankruptcies. Once you declare bankruptcy, the Trustee will notify all your creditors of your bankruptcy. The Superintendent of Bankruptcy will notify the credit bureaus. The credit bureaus will keep a record of your bankruptcy until 6 years after your discharge.

 


What happens during the bankruptcy?

How Long in Bankruptcy?The bankrupt must keep the trustee informed as to where the bankrupt is living and also must respond to the trustee's requests and assist him as required and provide whatever information is requested. The bankrupt must also provide the trustee with reports as to earnings and living expenses and any change in the bankrupt's family situation. The trustee will provide the bankrupt with appropriate forms to be filled in that will provide the trustee with the necessary information.  A meeting of creditors is not required unless requested by the Superintendent of Bankruptcy or creditors with an aggregate of at least 25% of the proven claims.  These meetings are usually held at the office of the trustee.

 

Can a bankruptcy help alleviate the terrible stress I am under?

Click the Speaker to hear a Trustee's Comments.

 

For most people the stress of the financial crisis will vanish as soon as a bankruptcy or proposal is filed.

Stress is alleviated for a number of reasons. Probably the major reasons are the stay of proceeding and the fact that the trustee will deal with your creditors allowing you to get on with your life.

 

 

What if I have the cash flow to make a proposal?

Click the Speaker to hear a Trustee's Comments.

 

A proposal allows you to avoid bankruptcy, while paying off only a portion of your debts.

PowerPoint Presentation: Steps in a Consumer Proposal.

If a person has the ability to make a proposal (i.e. his or her income exceeds living expenses), then he or she should consider making a proposal.

If any person files for bankruptcy when he or she has the ability to make a proposal, it is the Trustee's duty to oppose the bankrupt's discharge.  In this case, the bankrupt may be in bankruptcy up to an additional 12 months beyond the usual 9 months.  The bankrupt will be required to make payments in each of these months.

 

Will I end up with a better credit rating if I use a credit counsellor?

Click the Speaker to hear a Trustee's Comments.

 

Credit Counselling

No! So long as you're on any kind of payment plan the credit bureau will record that fact. Using credit counsellors will not give you a better credit rating faster. In fact, you will likely take longer to re-establish a good rating and pay much more if you use a credit counsellor rather than a trustee. For more information about credit counsellors and trustees refer to this page.

 

Will I ever get credit again?

Click the Speaker to hear a Trustee's Comments.

 

You can and you will get credit again, if your cash flow can support your payments.

After you have been discharged from bankruptcy or completed your proposal, you may be a good credit risk, since you have no debt. Naturally, you will find it a little harder to get credit until you can re-establish a good credit rating.  

You can get credit again after a bankruptcy or a proposal. The bankruptcy and proposal laws of Canada are intended to give you a fresh financial start. The ability to rebuild credit is part of that new start.

Have a look at our tips on how to rebuild your credit and also have a look at our After Bankruptcy Lenders.

 

How do I prepare for my initial consultation with the Trustee?

View our audio PowerPoint presentation on How to Prepare for your Meeting with the Trustee.

 

 

Bluenose Directory

Sponsor This Site

Home

Bankruptcy Questions?

Ask a bankruptcy trustee 
(It's confidential).

Information:

Personal Bankruptcy;
PowerPoint Presentation.

Consumer Proposals;
PowerPoint Presentation.

Bankruptcy FAQs;

NB Bankruptcy Exemptions;

NS Bankruptcy Exemptions;

Personal Proposals;
Avoiding bankruptcy.

Debt that is erased in a bankruptcy or a proposal;

Credit Counsellors & Trustees;
Get the facts!

Free Credit Report.

Credit Bureaus and Collection Agencies;

New Bankruptcy Laws;

Privacy Policy;

Disclaimer.

Form to take to your meeting with the trustee;

Other Links:

Email Button Email Us.