Bankruptcies in Manitoba

Understanding Bankruptcies in Manitoba: A Complete How-to Guide

Bankruptcies in Manitoba are a complex and often misunderstood process that can provide a fresh start for those struggling with overwhelming debt 3. Filing for bankruptcy is a serious decision that requires careful consideration and guidance from a Licensed Insolvency Trustee (LIT) 3.

This comprehensive guide will walk you through the bankruptcy process in Manitoba, from understanding what happens when you file bankruptcy 1 to exploring debt relief alternatives 3. We’ll also delve into recent trends in bankruptcy filings, the psychological impact of bankruptcy, and success stories of individuals who have overcome financial distress 3. By the end of this article, you’ll have a clearer understanding of how to declare bankruptcy in Manitoba and navigate the process with the help of a licensed insolvency trustee 3.

Bankruptcies in Manitoba

Bankruptcy in Manitoba is governed by the Landlord and Tenant Act, s. 46(1) and the Bankruptcy and Insolvency Act 2. The number of Manitobans declaring bankruptcy is expected to rise, according to Leigh Taylor, a licensed insolvency trustee with LC Taylor in Winnipeg 4. In Q1 of 2023, 200 individual Manitobans filed for bankruptcy, which is higher than the first quarters of 2021 and 2022 4 26. Leigh Taylor predicts that the second quarter could see even more bankruptcies 4. The causes for personal bankruptcy are wide-ranging, but higher interest rates are putting more pressure on credit card and mortgage payments 4.

Recent data shows:

  • In June 2023, there were 2 bankruptcies and 2 proposals filed by businesses in Manitoba under the Bankruptcy and Insolvency Act (BIA) 5.
  • The total volume of BIA insolvencies filed by businesses in Manitoba for the 12-month period ending June 2023 is 38 5.
  • There was a 0.0% change in the number of BIA insolvencies filed by businesses in Manitoba from May 2023 to June 2023 5.
  • Compared to June 2022, there was a 22.6% increase in the number of BIA insolvencies filed by businesses in Manitoba in June 2023 5.

Personal bankruptcies and consumer proposals in Manitoba increased by 31.5% in February 2023 compared to the same month in 2022 6. Bankruptcies specifically in Manitoba rose by 66.7% in the same period 6. In 2018, the number of consumer insolvencies per thousand residents in Winnipeg, aged 18 years or above, hit 3.1 7. In Q3 2023:

  • There were 925 total BIA insolvencies in Manitoba, representing a -4.3% change compared to Q3 2022 8.
  • There were 8 business bankruptcies in Manitoba, representing a 60.0% change compared to Q3 2022 8.
  • There were 5 business proposals in Manitoba, representing a 66.7% change compared to Q3 2022 8.

Manitoba has seen significant regional variations in bankruptcy filings:

  • Winnipeg experienced a 46.7% increase in the second quarter of 2022 compared to the previous quarter 10.
  • Southeast Manitoba saw a 62.5% increase quarter-to-quarter but a 45.8% decrease year-over-year 10.
  • South Central Manitoba saw a 150% increase quarter-to-quarter and a 45.5% decrease year-over-year 10.
  • Southwest Manitoba saw a 56.3% increase quarter-to-quarter and a 25% increase year-over-year 10.
  • North Central Manitoba remained stable quarter-to-quarter but saw a 62.5% decrease year-over-year 10.
  • The Interlake region went from four to nine bankruptcies in Q2 2022, but still a drop from 13 filings the previous year 10.
  • The Parklands region decreased from eight bankruptcies last year to five in Q2 2022 10.
  • The North region decreased from six to three bankruptcies in Q2 2022 10.

Understanding Bankruptcy in Manitoba

Bankruptcy in Manitoba is a legal process governed by the Bankruptcy and Insolvency Act and the Landlord and Tenant Act 11. It offers eligible debtors significant benefits, including immediate protection from creditors, stopping collections calls, wage garnishments, frozen bank accounts, and legal actions against the debtor 3. Filing for bankruptcy allows the elimination of unsecured debts, with a few exceptions such as child support, alimony, student loans less than 7 years old, fines and penalties of a court, and debts that are the result of fraud or misrepresentation 3.

The process of filing for bankruptcy in Manitoba involves three steps 3:

  1. Finding a Licensed Insolvency Trustee (LIT) who will administer the bankruptcy, provide financial counseling, communicate with creditors, and hold any payments received in trust for the benefit of the creditors 3.
  2. Meeting with the LIT to review all debt relief options, including consumer proposals, Division I proposals, and bankruptcy 13.
  3. Filing for bankruptcy by providing necessary information such as personal details, a list of creditors, and a list of assets 3.

After filing for bankruptcy, the debtor is required to complete certain obligations, such as 3:

  • Providing a monthly income statement to the Trustee
  • Attending two mandatory credit counseling sessions
  • Keeping the Trustee updated on contact information
  • Providing the Trustee with tax information

The bankruptcy discharge usually takes 9 months if there is no excess income and 21 months if there is excess income 3. The discharge process in Manitoba includes automatic discharge, court application for discharge, conditions for discharge, preparing your own application for discharge, required documents, serving documents, at the hearing, and types of orders 2.

Recent Trends in Bankruptcy Filings

Recent trends in bankruptcy filings across Canada and Manitoba reveal the impact of economic challenges on various sectors and individuals:

  • The agricultural sector has been significantly impacted, with many farmers facing financial distress due to low commodity prices and rising input costs 9. The construction industry has also seen a high number of bankruptcies, largely due to project delays and cost overruns 9.
  • In March 2023, the total number of insolvencies (bankruptcies and proposals) in Canada increased by 28.1% compared to the previous month 16. Consumer insolvencies increased by 28.0% and business insolvencies increased by 36.8% in March 2023 compared to the previous year 16. For the 12-month period ending March 31, 2023, the total number of insolvencies increased by 19.9% compared to the 12-month period ending March 31, 2022 16.
  • The total number of insolvencies in Canada increased by 23.6% in 2023, with business insolvencies surging by over 41% in the same year 17. Credit card debts have reached an all-time high of $11.34 billion in the fall of 2023, a 16% increase from the same period in the previous year 17. Wages are not keeping pace with inflation, forcing people to borrow money while interest rates remain high 17. The high cost of living is also impacting business insolvencies, as employees demand better salaries and businesses struggle to balance these increases 17.

In October 2023:

  • Total insolvencies (bankruptcies and proposals) in Canada increased by 6.0% compared to the previous month 18.
  • Consumer insolvencies increased by 25.8% and business insolvencies increased by 63% compared to the same period in 2022 18.
  • For the 12-month period ending October 31, 2023, the total number of insolvencies increased by 22.6% compared to the same period in 2022 18.
  • Retail trade, accommodation and food services, and construction registered the biggest increases in the number of insolvencies for the 12-month period ending October 31, 2023 18.

The Psychological Impact of Bankruptcy

Declaring bankruptcy can lead to various negative emotions such as stress, loss of self-esteem, depressionanger, sadness, and shame 19. It can also result in feelings of personal loss, reduced interpersonal power, and a perceived loss of identity 19. Bankruptcy can feel like a loss, adding to the distress of other unfortunate life events such as job loss or medical conditions 20. The emotional cost of bankruptcy can be significant, often leading to feelings of depression, shame, embarrassment, guilt, grief, anxiety, hurt, hopelessness, insecurity, numbness, and apathy 22. These emotions can have a profound impact on a person’s career, relationships, and physical and mental health 22.

The psychological effects of declaring bankruptcy can be overwhelming and wide-reaching, affecting relationships and causing stress 23. Many people who turn to bankruptcy have juggled their debt for so long that they’re emotionally exhausted by the time they’re ready to file 23. The act of filing bankruptcy can be psychologically difficult, causing stress on relationships and even being traumatic for a family 23. A person’s self-esteem often takes a hit, with the problem being more internal than external 23. Many misguided beliefs build anxiety and fear, such as the belief that bankruptcy won’t offer relief or that a credit score will be permanently destroyed 23.

Despite the challenges, bankruptcy can be seen as a fresh start 19. Addressing core insecurities and bringing negative feelings to a conscious level can reduce fear and a sense of being out of control 19. Various resources are available for those facing health or mental health concerns due to bankruptcy, such as 19:

  • The Substance Abuse and Mental Health Services Administration (SAMHSA)
  • United Way
  • State Office of Mental Health Services
  • Company employee mental health services
  • The U.S. Department of Veterans Affairs for veterans and their families

Seeking help from professionals like credit counseling services and bankruptcy attorneys can help manage the situation 19. It’s important to practice self-compassion and let go of resentment and blame 19. Bankruptcy is common and should not be viewed as a loss but an opportunity to start over 20. It’s a chance to understand the value of income and hard work, and to detach self-worth from bank account size 20. Recovery involves becoming financially independent and regaining a sense of self 20.

Bankruptcy Alternatives and Financial Recovery

For those facing financial hardships, there are several alternatives to bankruptcy that can help with debt relief and financial recoveryBudgeting is a crucial first step, which involves understanding income versus expenses and allocating funds towards essential needs, debt repayment, and savings 25Debt consolidation is another option, combining multiple debts into a single, more manageable loan 25Balance transfer credit cards can also help by transferring high-interest balances to a card with a lower interest rate 25.

Negotiating with creditors is an important step in managing debt. Open communication about financial hardships can lead to potential options and solutions 25. A consumer proposal is a formal agreement between the debtor and creditor, facilitated by a Licensed Insolvency Trustee 25. This can help reduce debt and extend the repayment period. Debt management plans provide a structured and manageable way to repay debts 26. Credit counseling services can assess financial situations and provide guidance on managing debt 26.

Building emergency savings is crucial for financial stability. Setting aside funds for unexpected expenses or income fluctuations can help prevent further debt 25. Automated savings contributions ensure consistent contributions to a separate savings account 25Financial education is also key, with online resources, courses, and workshops available to enhance personal finance knowledge 25. Seeking professional guidance from a Licensed Insolvency Trustee can provide personalized insights and strategies for managing debt 25.

Other alternatives include:

  • Private arrangements: Negotiating a debt repayment plan directly with creditors 27
  • Assistance from voluntary welfare organizations: Seeking help from social service agencies 27
  • Voluntary arrangements: A negotiated debt settlement under Part V of the Bankruptcy Act 27
  • Court dispute resolution: Negotiating a debt repayment plan through the court system 27
  • Debt Repayment Scheme: A repayment scheme for individuals with a regular income and debts not exceeding $150,000 27
  • Home Equity Investment (HEI): A service that provides up to $500k from home equity with no monthly payments 28

It’s important to note that while these alternatives can provide relief, it’s crucial to address the underlying causes of financial distress and develop healthy financial habits for long-term success.

Success Stories: Overcoming Financial Distress

Maribeth Tabanera, a millennial in Winnipeg, found themselves in $40,000 of debt due to overspending on credit cards for school, shopping sprees, trips, and things that represented success 29. Seeking help from a trusted friend, Tabanera learned how to budget, prioritize debt payments, and save 29. After moving back in with their parents, they saved enough for a down payment on a one-bedroom condo in 2019 29. Throughout the pandemic, Tabanera has been able to:

Tabanera considers it a huge accomplishment to be the first woman in their family line to buy a home on their own 29.

Marco Calliari, a Montreal singer-songwriter, faced financial problems due to the highs and lows of his 35-year career, debts, and a big investment into a festival that didn’t turn out as planned 30. Instead of declaring bankruptcy, Calliari found a creative solution by hosting concerts in his living room 30. He refers to it as group therapy, wanting people to talk about their problems, especially if they’re going through similar situations 30. This approach allowed him to maintain his passion for performing in front of an audience without adding more financial stress 30.

These success stories demonstrate that with determination, creativity, and support, individuals can overcome financial distress and achieve their goals. Whether it’s learning to budget and save, finding alternative income sources, or seeking help from trusted friends and professionals, there are many paths to financial recovery.

Navigating the Bankruptcy Process

Navigating the bankruptcy process in Manitoba involves several key steps:

  1. Meeting with a Licensed Insolvency Trustee (LIT) to review your financial situation and explore all available options, including bankruptcy 1 3 12 32 33 34 35. The Trustee will help you determine if bankruptcy is the best course of action for your specific circumstances.
  2. If bankruptcy is deemed the most suitable option, the Trustee will draft the necessary paperwork with your input 1 3 12 32 33 34 35. Once the documents are signed, the Trustee files the paperwork, and your creditors are notified, resulting in an immediate halt to all collection activities and wage garnishments 1 3 12 32 33 34 35.
  3. During the bankruptcy process, you are required to:
    • Submit monthly income and expense statements 1 3 12 32 33 34 35
    • Attend two mandatory financial counseling sessions to help you stay on track 1 3 12 32 33 34 35
    • Surrender assets, which are then liquidated, and the proceeds are distributed to creditors 12

For first-time bankruptcies, an automatic discharge may be granted in as little as nine months 1 3 12 32 33 34 35. However, if the Trustee has been discharged and you haven’t received your discharge, you must apply for it yourself 2. This process involves:

  1. Locating your bankruptcy file at the court registry and obtaining relevant documents, such as the Trustee’s report, any previous discharge hearing orders, and the disposition sheet 2
  2. Determining what conditions the court has imposed and what steps you need to take to fulfill them 2
  3. Booking a hearing date for your discharge application with the bankruptcy coordinator 2
  4. Preparing and serving necessary documents, including a Requisition, Affidavit of Service, and a draft of the order you are seeking 2
  5. Presenting your case in court to a judge or Registrar in Bankruptcy 2

The court will then make an appropriate order, which may include an absolute discharge, conditional discharge, or suspended discharge 2. Upon receiving an absolute discharge, you will be released from the obligation to repay most debts incurred prior to the date of your bankruptcy 2.


Bankruptcy in Manitoba is a complex process that offers relief for those struggling with overwhelming debt. By understanding the process, exploring alternatives, and seeking guidance from Licensed Insolvency Trustees, individuals can navigate this difficult journey and achieve a fresh financial start. It is crucial to recognize the psychological impact of bankruptcy and seek support from professionals and trusted sources.

While bankruptcy can be a challenging and emotionally taxing experience, it also presents an opportunity for growth and rebuilding. With determination, financial education, and the right strategies, individuals can overcome financial distress and achieve long-term stability. Remember, you are not alone in this journey, and there is always hope for a brighter financial future.


What assets are protected from seizure during a bankruptcy?

Certain assets are exempt from being taken by creditors in a bankruptcy. These include items such as household furniture, Registered Retirement Savings Plans (RRSPs), Registered Retirement Income Funds (RRIFs), and other retirement investments (with the exception of contributions made within the last year). Additionally, tools necessary for your profession cannot be seized.

What debts are eliminated by filing for bankruptcy?

Filing for Chapter 7 bankruptcy can eliminate various types of debts. This process can discharge debts such as credit card balances, medical bills, unpaid rent, payday loans, outstanding cellphone and utility bills, remaining car loan payments, and even home mortgage obligations, often within a four-month period.

Is it possible to recover from a bankruptcy?

Yes, individuals can recover from bankruptcy. Although it can initially affect your credit score, bankruptcy provides a chance to reset financially, allowing you to rebuild your credit and financial stability over time.

Which type of bankruptcy filing is most advantageous?

Many debtors opt for Chapter 7 bankruptcy due to its speed and efficiency. Most filers receive a discharge of their eligible debts within about four months. Additionally, filers are often able to retain most, if not all, of their property without being required to adhere to a three- to five-year repayment plan, which is typical of Chapter 13 bankruptcy.


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