Does the government pay for bankruptcies?

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Yes and No. The government doesn’t give you money but they oversees the process through the Bankruptcy and Insolvency Act which allows you to erase as much as 80% of your debt. For a first-time bankruptcy, expect at least $2,250 in fees, payable over time. Costs like trustee fees also come from your pocket. Not all trustees can be trusted. Trustees get paid by the lenders and creditors and don’t advocate for Canadians in debt. We can help find the best and cheapest one for you. Reach out via phone, text, or live chat if you have questions.

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Government Pay Bankruptcies Question

Does the government pay for bankruptcies? I’ve heard some people say that filing for bankruptcy is partially covered by the government, but I’m not sure how that works or if it’s true.

From: Anonymous Question
Location: Hamilton, Ontario (ON)
Category: personal bankruptcy

Government Pay Bankruptcies Answer

The government is going to legally allow you to write off and erase as much as 80% of your debt! It’s an amazing program. You still need some money to pay off the remaining amount but it’s a heck of a lot better than paying 100% of the debt. The Canadian government also keeps an eye on the whole process, as least they are supposed to. You’ll be dealing with the Bankruptcy and Insolvency Act, which sounds pretty official and the government provides the rules and checks in on those Licensed Insolvency Trustees.

Trustees get paid by the lenders and creditors and don’t advocate for Canadians in debt. LITs can also double bill you or charge you extra. Beware! Reach out via phone, text, or live chat if you have any questions.

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

The government does not pay for bankruptcies in Canada. When an individual files for bankruptcy, they must cover the associated costs, which include the fees for the Licensed Insolvency Trustee and any required court fees. The Bankruptcy and Insolvency Act (BIA) outlines the obligations and procedures, but it does not state that the government subsidizes these costs. Specifically, the costs borne by the debtor for the bankruptcy process are detailed in sections concerning administration fees within the BIA and its regulations.

From: OSB Helper

Related Questions to If The Government Pays For Bankruptcies

Here are the top 5 frequently asked questions related to government assistance for bankruptcies in Canada, formatted as requested:

1. Does the government provide free grants for paying off personal debt?

• No, the government does not provide free grants specifically for paying off personal debts[1].

2. How can low-income individuals afford the fees for bankruptcy?

• Low-income individuals can access the Bankruptcy Assistance Program (BAP) which reduces the typical fees of a Licensed Insolvency Trustee[2][5].

3. What is the Bankruptcy Assistance Program and how does it work?

• The Bankruptcy Assistance Program (BAP) is a program administered by the Office of the Superintendent of Bankruptcy that helps low-income individuals by reducing the fees associated with filing for bankruptcy[2][5].

4. Are there any government-regulated programs to help with debt relief?

• Yes, government-regulated programs such as consumer proposals and bankruptcies, administered by Licensed Insolvency Trustees, are available to help with debt relief[1].

5. Do I qualify for the Bankruptcy Assistance Program?

• To qualify, you must meet specific criteria, including not being in jail, not being involved in commercial activity, and not being required to make surplus income payments[5].

If you have a question about debt see our debt questions or ask your own debt related question.

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