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Bankruptcy is a legal procedure that allows you to be released from most of your debts if you are insolvent and facing serious financial difficulties.

Bankruptcy may be voluntary or involuntary. In the case of a voluntary bankruptcy, your decision must be made after consulting a trustee in bankruptcy, who will then take charge of your case and ensure that the bankruptcy procedure follows its proper course.

You may also be forced into bankruptcy if one of your creditors requests it and is able to prove that you are insolvent under the criteria set out by law.

Advantages and consequences

If you are going bankrupt for the first time, you will be released from your debts in a few months.

You will also be able to suspend most of the proceedings instituted against you by your creditors. However, you will have to surrender most of your seizable property in order to pay them what you owe.

Bankruptcy will have a significant impact on your credit rating.

Last, in some cases you may lose your professional practice rights for the duration of the bankruptcy procedure.

Other solutions

In general, bankruptcy should only be considered as a last resort. There are other solutions you can apply to pay off your debts, including consumer proposals and voluntary deposit.

To learn more about the various options, you should consult a trustee in bankruptcy or a legal advisor.

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