Credit Counseling and Bankruptcy: What Happens in the United States in Canada
In both Canada and the United States credit counseling is now part of the bankruptcy process. Credit counseling has been part of the Canadian bankruptcy process since 1992, but was only added to the American bankruptcy process in 2005.

An individual filing bankruptcy under either Chapter 7 or Chapter 13 in the United States is required to participate in a counseling session with an approved nonprofit credit counseling agency PRIOR to filing for personal bankruptcy. The certificate of completion must be included with the bankruptcy petition to start the bankruptcy.

In addition, prior to discharge an individual must complete a financial education course that will discuss budgeting, rebuilding finances after bankruptcy, and understanding and using credit. A certificate proving you have completed the course will be required to obtain your discharge from bankruptcy.

In Canada, credit counseling is required, but only after the personal bankruptcy process begins. In Canada, an individual must have two credit counseling sessions; one during the first 10 to 60 days of the bankruptcy or consumer proposal (similar to Chapter 13), and a final session 30 days after the first session, but within the first 210 days of the bankruptcy.

In both countries the sessions will deal with budgeting and the causes of the bankruptcy.

To learn more about how credit counseling impacts on personal bankruptcy, contact a U.S. bankruptcy attorney, or a Canadian personal bankruptcy trustee.

Changes to Bankruptcy Law in Ontario Canada

Effective December 14, 2005, the Province of Ontario has amended the limits on the amounts for certain assets which are exempt from seizure by a trustee in a bankruptcy.

Basically the increases allows for inflation since they have not changed in the last 5 years.

The new values are:

• $5,650 worth of personal possessions (clothing, jewelry, sports equipment, etc.);
• $5,650 worth of motor vehicles (cars, trucks etc.);
• $11,300 worth of furnishings;
• $11,300 worth of tools of the trade (equipment that you use to earn a living); and certain types of life insurance.

Furthermore, when the new Bankruptcy rules come into effect during the summer of 2006, RRSPs will also be protected, with some exceptions.

Do I Need a Lawyer to File Personal Bankruptcy?

In short, in the United States you do not need a lawyer to file for bankruptcy. In Canada you need a Trustee licensed by the Federal Government.

That being said, bankruptcy law is complex, and it is therefore strongly recommended that any individual considering filing for personal bankruptcy first obtain the advice of a competent bankruptcy attorney. Most bankruptcy attorneys will have a first meeting with you for free, or for a small charge, so that they can help you review your options.

In the United States if you file personal bankruptcy without legal representation, you will not be given any special consideration by the court and you will be held responsible for knowing the requirements of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.
This means if you miss a deadline, fail to perform a required task, or fail to respond properly to an action, your bankruptcy case could be dismissed, or you could be denied your discharge from bankruptcy, or you may lose property which you might otherwise have been entitled to keep.
In addition, the Clerk’s Office at your local bankruptcy court is prohibited by law from providing legal advice. Paralegals and typing services are also prohibited by law from providing legal advice. Only an attorney may provide legal advice. In Canada these people are called "Trustees". The following sites provide a list of attorney's and trustees by city in the US and Canada.

Residents of the United States: Chapter 7, 13 Bankruptcy Lawyers
Residents of Canada: Personal Bankruptcy Trustees

Whether you are considering filing for personal bankruptcy protection under Chapter 7 or Chapter 13, bankruptcy is a serious legal procedure, governed by federal law, and therefore the advice of a competent bankruptcy attorney is strongly recommended.