Filing For Bankruptcy When Unemployed
If you don't have a job when you file for bankruptcy, it doesn't really make any difference to how your bankruptcy is administered. What does impact a bankruptcy filing is income from any source.
Even if you don't have a job, your income is still used to calculate the payment you make in a bankruptcy and the length of time that you are bankrupt. The payment a person makes into their bankrupt estate is set by the Bankruptcy and Insolvency Act and is a sliding scale much like the child support guideline calculation. If you're having trouble assessing your financial situation, we recommend speaking with a Licensed Insolvency Trustee.. Any kind of income you earn is used when calculating this payment, not just employment income. Income of all members of the family is also used to calculate the payment. For example, if you are receiving Employment Insurance, or a pension, that is still income used to calculate your payment into a bankruptcy in the same way that employment income is used.
If your income is below the standard set by the Bankruptcy and Insolvency Act, then the trustee will make an arrangement with you for payment that you can manage. . If your income is above the standard, the trustee will calculate your bankruptcy payment and let you know how much it will be and for how long. The time frame a person is bankruptcy and the length of payments also varies depending on whether this is your first bankruptcy.
Below is a table of how long a person will be bankrupt, depending on their individual situation.
| First – no surplus income | 9 months |
| First time bankrupt – surplus income | 21 months |
| Second time bankrupt – no surplus income | 24 months |
| Second time bankrupt – surplus income | 36 months |
| Third time bankrupt | Determined by court in all cases |
If you don't have a job, it is difficult for creditors to take action against you. A regular creditor cannot garnishee pension income or EI form source. However, they can get writs against your bank accounts and assets them that way. Not having a job does not make you judgement proof. A bankruptcy will stop the ability of a creditor to take this kind of action immediately.
If your debt is with the Canada Revenue Agency (CRA), then it can seize your pension income at source without going to court first. If you have substantial debt owing to Canada Revenue Agency, contact your local MNP Licensed Insolvency Trustee office today to find out your options. A Bankruptcy will stop Revenue Canada from taking any action against any kind of income.
Some people who don't have a job file for bankruptcy to reduce the amount of stress creditors cause by their harassing telephone calls. Stress can be mentally and physically debilitating and filing a bankruptcy will help relieve this stress.
The bottom line is that even if you don't have a job, filing a bankruptcy can still be a helpful tool in helping to move forward and changing your life. Contact your local MNP Licensed Insolvency Trustee office to learn what your options are and how they can help. There is no charge for a consultation and you really have nothing to lose.
