Meeting with the Trustee

Once a decision has been reached to file for consumer bankruptcy, the first step is to meet with a Trustee. Trustees are the only individuals licensed by the Superintendent of Bankruptcy to administer bankruptcies under the Bankruptcy and Insolvency Act (The Act).

To prepare for your initial meeting with the Trustee to assess your situation and explain the bankruptcy process, assemble the following information:

• All of your most recent account statements
• A list of the liabilities for which you do not have a statement (include names, addresses, account numbers, and approximate amounts owed)
• A copy of any security (liens, chattel mortgages) held by creditors
• A copy of your last tax return filed
• A copy of your most recent pay stub
• Any other information that may be required by the Trustee such as:
• Insurance policies
• Leases
• Title papers.

Credit cards are also required to be turned over to the Trustee for cancellation.

It is important to note that the Trustee is considered an Officer of the Court whose responsibilities include making sure that your rights, as well as those of the creditors, are respected. The Trustee can also help you cope with the stress you may be feeling.

You are required under The Act to participate in two counselling sessions. The first session must occur between ten days and two months following the date of bankruptcy.

The second mandatory counselling session may be done individually or in a group session of up to twenty bankrupts. The objectives are to discover the causes of the financial difficulties, seek remedies available to deal with these causes, and to aid you in acquiring better budgeting and money management skills. A third session is optional. Failure to attend for counselling may delay your discharge.

Bankruptcy administrations cost money. They are not subsidized by the government, legal aid, or the creditors. This means that the Trustee must make arrangement for payment of fees, and expenses, where the funds in the estate following the realization on eligible assets are not likely to be sufficient to pay for the administration. Fees for consumer bankruptcies are set by the Federal Government. The tariff, as it is called, includes fees for the actual bankruptcy administration, two counselling sessions, and applicable G.S.T. There is also a filing fee paid to the Federal Government and, in some cases, a Court fee. As it is unusual for a person considering bankruptcy to have this amount of money available, it is common for the Trustee to take a deposit with arrangements to have payments made on a monthly basis. In the alternative, you may know of a third party who is available to make a guarantee deposit equal to the fees. This deposit would be held in trust until the administration is completed and fees are drawn. Funds from a third party which are not required to pay fees, are returned to the third party at the end of the administration.

Where the bankrupt has excess income it is required that monthly payments will be made to the estate in accordance with the guidelines set out by the Superintendent in Bankruptcy. These guidelines are updated annually and take into account the size of the bankrupt's dependent family. Failure to make these payments, where required, or to inform the Trustee of any material change in your family finances will likely affect your discharge.