Declaring Bankruptcy in Canada From Abroad

Declaring Bankruptcy in Canada From AbroadFinancial distress does not recognize geographical boundaries. Many Canadians living abroad grapple with the challenge of managing their Canadian debts. If you find yourself in such a situation, you might be asking, “Can I declare bankruptcy in Canada while living overseas?” The response to this question is multifaceted, but the rules governing this process are straightforward. This comprehensive guide will help you understand the process of declaring bankruptcy in Canada from abroad.

Understanding the Process of Declaring Bankruptcy in Canada

When you are unable to manage your debts, declaring bankruptcy might be a feasible solution. This process provides a legal means for individuals to eliminate most, if not all, of their debts. However, declaring bankruptcy in Canada while living overseas can be a complicated affair.

The Eligibility Criteria for Declaring Bankruptcy in Canada from Abroad

Before diving into the process, it’s essential to understand the eligibility criteria for declaring bankruptcy in Canada while living abroad. The Bankruptcy and Insolvency Act outlines three key criteria:

  1. Business Operation or Employment in Canada: If you are currently working or operating a business in Canada or have been doing so within the year preceding your bankruptcy filing, you are eligible to file for bankruptcy.
  2. Residency in Canada: You must be living in Canada or have resided in the country within the 12 months preceding your bankruptcy filing.
  3. Property Holdings in Canada: If the majority of your assets are in Canada, you qualify for bankruptcy. These assets can include real estate, money in Canadian banks, investments, and other tangible properties.

If you meet any of these criteria, you can file for bankruptcy in Canada.

The Process of Filing for Bankruptcy in Canada from Abroad

The ideal and straightforward way to file for bankruptcy would be to return to Canada. After filing the necessary paperwork, you can then leave the country. However, you must ensure that your trustee is informed about your overseas residence.

If you wish to stay outside Canada, you can still file for bankruptcy by fulfilling the above eligibility criteria. Once you have determined your eligibility, you can commence the bankruptcy filing process.

It’s important to note that even if you are living abroad during your bankruptcy filing, you are still subject to the rules and regulations under the Canadian Bankruptcy and Insolvency Act. You must ensure that your trustee has your up-to-date contact information, declare all your assets (even those held outside of Canada), and report all your liabilities, regardless of where the debt is owed.

Essential Duties When Declaring Bankruptcy in Canada from Abroad

When you file for bankruptcy in Canada, you are required to perform certain duties as a condition of your discharge from bankruptcy. These duties include attending two mandatory financial counseling sessions and reporting your monthly income and expenses to the trustee for the duration of your bankruptcy.

The Cost of Declaring Bankruptcy in Canada from Abroad

The cost of administering a personal bankruptcy is set by government regulations. This cost will be discussed at your initial meeting with a trustee.

Locating a Trustee for Bankruptcy Filing

To find a licensed trustee in your area, you can search the Trustee Registry of the Office of the Superintendent of Bankruptcy website. Alternatively, you can contact the office in your region that deals with insolvency matters.

Dealing with Cross-Border Debts

If you have accumulated debts in both Canada and your current country of residence, you may have to file for bankruptcy in both countries to deal with the respective debts. Even though a bankruptcy filing in Canada will list all your debts, regardless of where they are owed, the other country may not recognize the Canadian bankruptcy. Therefore, to effectively manage your debts, you may need to file for bankruptcy in both countries.

The Impact of Bankruptcy on Your Future

Declaring bankruptcy in Canada from abroad can provide you with a fresh start from your debts, especially if you plan to return to Canada in the future. However, it’s crucial to understand that bankruptcy is not a quick fix and can have long-term effects on your financial future. Therefore, before deciding to file for bankruptcy, it’s advisable to seek professional advice and explore all available debt relief options.

In Conclusion

Declaring bankruptcy in Canada from abroad is a complex process that requires careful consideration and understanding. If you find yourself struggling with Canadian debts while living overseas, consider seeking advice from a professional trustee who can guide you through the process and help you make an informed decision.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.