Filing Bankruptcy in Canada: Minimum Amount of Debt Needed

What is the Minimum Amount of Debt Needed to Go Bankrupt?

Should you file for bankruptcy in Canada?

More specifically, do you qualify for this?

Are there any terms you must meet before you go through the bankruptcy process?

It’s an extreme solution to debt problems, ensuring that you clear most of your debts and get a new start at life.

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The damage this does to your credit score means you should only consider it if you have no other options.

Still, is there a limit on how much debt you need to file for bankruptcy?

Technically speaking, the law states you can file for bankruptcy if you have debts totalling at least $1,000.

To some of you, this seems like a very low figure.

In fact, most people who file for bankruptcy have much larger debts than this.

However, this is the minimum figure, meaning you can’t file for bankruptcy if you owe less than this.

Why is the figure so low?

Some people assume this figure is low to encourage people to go bankrupt.

That’s not the case at all.

It simply exists as a way to give certain people a way out of their debt situation.

All Canadians are different, and you all earn different wages.

Some of you can handle a $1,000 debt and pay it off in a few weeks or months.

For others, this could be the equivalent of a $100,000 debt for the average person.

It all depends on income, expenses, and the individual’s personal situation.

Should you file for bankruptcy?

After seeing the minimum amount of debt required for bankruptcy, you may be inclined to go through with it.

However, this isn’t always recommended.

The truth is that it depends on how much debt you have over this threshold and how hard it is for you to pay.

Here are a few questions to ask yourself before taking any action:


  • Are you struggling to make debt repayments every month?
  • Are your debts continuing to rise?
  • Are you getting charged additional fees and high-interest rates?
  • Have you sought out other debt-relief solutions?


If you aren’t having difficulties making debt repayments, you don’t need to go bankrupt.

Similarly, if you have control over your debts – and they are decreasing instead of rising – this isn’t a solution you need to seek out.

Even if you answered yes to the first three questions, you shouldn’t go bankrupt until you’ve tried different debt-relief solutions.

Something like a debt management plan or a debt settlement can make it easier to repay your debts.

Debt consolidation loans are also useful.

There’s even another insolvency solution in consumer proposals that aren’t as extreme as a bankruptcy.

In summary, the minimum amount of debt required for bankruptcy is $1,000.

But, that doesn’t mean you should instantly go down this path if you’re in debt.

Explore other options and take action before your debts start increasing.

Call us for debt-relief help

Regardless of your situation, we can help you solve your personal debt crisis.

As professional debt-relief experts, we’ll assess your life and consider what options work best for you.

Even if bankruptcy is the only solution, we’ll guide you through the process.

Call us today to schedule a consultation – or fill in our evaluation form.

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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