Bankruptcy Laws of Ontario

Ontario Bankruptcy Laws Help You Get Out of Debt

Before you file for bankruptcy in Ontario, you must be aware of the laws and legislation in place.

As of right now, there are four specific legislations put in place that govern bankruptcy law.

These are:



For a breakdown of what they are and how they work, carry on reading.

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The Canadian Bankruptcy and Insolvency Act (BIA)

This is federal legislation that offers the legal guidelines for any individual that’s suffering from debt problems.

The whole purpose of the Act is to give you a way of seeking relief and being free from your financial issues.

As such, it guides you through the process of filing for bankruptcy and the key rules you need to follow.

Alongside this, it contains additional information for other parties involved in the proceedings, including Licensed Insolvency Trustees, creditors, etc.

The main thing you need to know about the BIA is what it states about individuals who are looking to file for bankruptcy.

The key points covered are as follows:


  • It details how your property will be handled during the process and outlines some exemptions to assets that won’t be included in your bankruptcy;
  • It explains all the insolvency methods you can legally file;
  • You will see how all of your money is eventually distributed amongst your creditors;
  • Details of all the paperwork and meetings required.


There will also be a section that runs through what happens if these rules aren’t followed.

As such, it’s important to get professional help with bankruptcy from a Licensed Insolvency Trustee.

Limitations Act

The Ontario Limitations Act includes a lot of information that isn’t relevant to your situation.

As far as bankruptcy goes, there’s a section that speaks about debt.

More specifically, it details the statute of limitations pertaining to debt collection.

If you read the Act, you’ll notice it states:


  • Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.


This is found in Section 4 of the Act, and it basically means that a creditor can’t take legal action if you stopped making payments on a debt over two years ago.

More details are provided in the Act itself, so we suggest either reading it through yourself or getting professional help from debt relief specialists like ourselves.

Ontario Executions Act

This Act will list any asset exemptions in Ontario when filing for bankruptcy.

Now, the BIA will already provide a list of exemptions.

This means that you can keep certain assets under particular conditions.

Some examples include items that are already legally exempt from seizure, RRSPs, and a few more.

Different provinces add their own exemptions to the ones in the BIA.

The full list of exemptions for Ontario can be found in the Act.

If you don’t want to look through it, then your Licensed Insolvency Trustee will be able to keep you updated on everything.

Personal Property Security Act

The sole purpose of bankruptcy is to get rid of your unsecured debts.

These debts include various loans, credit card debts, and anything that isn’t secured.

A secured debt is one where you have put something up as collateral.

Your asset acts as security to ensure you pay the debt.

A good example of this is a car loan where your car is collateral.

Fail to pay the debt, and your creditor can claim the car to cover the costs.

The PPSA is important as it demands that creditors register an interest in your secured assets.

This means that, if you wanted to sell the asset to raise money during your bankruptcy, they could step in and take the asset themselves.

But, if they don’t register an interest on the PPSA system, then they’re not entitled to take it.

Consequently, your Licensed Insolvency Trustee must take responsibility and conduct a search of the PPSA system during the bankruptcy proceedings.

This prevents instances where you attempt to sell something, and a creditor flags it up and steps in to claim the asset.

Contact us for bankruptcy in Ontario

There’s a lot to know about the bankruptcy laws of Ontario.

Don’t worry, we’re here to help with everything.

Get in touch with our team, and we can set up a consultation.

Here, we can go through the whole bankruptcy proceedings and explain the laws in more detail.

If we believe this is the best thing for you to do, then we’ll help you legally file for bankruptcy and eliminate your debt.

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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