Bankruptcy in Nova Scotia

Personal Bankruptcy Filings in Nova Scotia

A Comprehensive Guide to Regaining Financial Control

In recent years, Canada has witnessed a concerning rise in consumer debt, and Nova Scotia is no exception. With residents increasingly taking out loans for cars, furniture, and appliances, the average non-mortgage debt load in Nova Scotia has reached over $41,619 per person. This alarming statistic has raised concerns about the potential increase in bankruptcies and consumer proposals throughout the province.


Understanding Bankruptcy in Nova Scotia

Bankruptcy is a legal process regulated by the federal government, with specific regulations set by the province of Nova Scotia. It serves as a last resort for individuals overwhelmed by debt, providing them with a fresh start and eliminating most unsecured debts. To be eligible for bankruptcy in Nova Scotia, you must owe at least $1,000 in unsecured debt.

To initiate the bankruptcy process, individuals must work with a licensed bankruptcy trustee. The trustee creates a trust consisting of the debtor’s assets, from which creditors are paid. Certain exemptions allow debtors to retain some of their possessions. After approximately nine months, the trustee recommends discharge, and upon approval, the bankruptcy becomes official, erasing the covered debts.


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Pros and Cons of Bankruptcy in Nova Scotia

Before opting for bankruptcy, it is essential to consider its advantages and disadvantages. Some pros of filing for bankruptcy in Nova Scotia include:

  1. Legal protection from debt collectors, preventing harassment.
  2. Student loan forgiveness after seven years since the end of student status.
  3. Financial counseling to prevent future bankruptcy.

However, there are significant drawbacks to filing for bankruptcy, such as:

  1. Ineligibility for certain corporate board positions during the bankruptcy process.
  2. Ruined credit for seven years, making it challenging to obtain new loans.
  3. Exemption amounts that require surrendering a significant portion of assets.

Bankruptcy Statistics in Nova Scotia

To gain insight into the current state of bankruptcies in Nova Scotia, it is helpful to examine the annual consumer insolvency rates. These rates provide a snapshot of the province’s overall financial landscape:

Annual Consumer Insolvency Rates in Nova Scotia (Per 1,000 Population Aged 18 Years and Older)

Nova Scotia5.74.31.4
Cape Breton6.34.32.0
North Shore6.04.51.5
Annapolis Valley6.55.41.2

Source: Industry Canada

The Bankruptcy Process in Nova Scotia

To better understand the bankruptcy process in Nova Scotia, let’s delve into its various stages and requirements:

1. Initial Consultation with a Licensed Insolvency Trustee

Before filing for bankruptcy, it is crucial to consult with a licensed insolvency trustee. This initial meeting allows the trustee to assess your financial situation and discuss potential debt relief options. These alternatives may include budget restructuring, asset liquidation, debt consolidation, consumer proposals, or bankruptcy. The initial consultation is typically free, and there is no obligation to proceed with any specific course of action.

2. Filing for Bankruptcy

If you decide that bankruptcy is the best option for your circumstances, the licensed insolvency trustee will guide you through the filing process. The trustee will collect necessary information from you and prepare the legal documents required for bankruptcy, such as the Assignment in Bankruptcy. Once signed, these documents are filed with the Office of the Superintendent of Bankruptcy, marking the official start of your bankruptcy. The trustee will then notify your creditors of your bankruptcy filing, and they will have the opportunity to prove their claims against you.

3. Duties During Bankruptcy

Throughout the bankruptcy period, you have specific obligations outlined by the Bankruptcy and Insolvency Act. These duties typically include:

  • Submitting monthly income and expense statements with supporting documentation, such as pay stubs.
  • Attending two credit counseling sessions to learn about budgeting and credit re-establishment.
  • Making required contributions, including surplus income payments, to your creditors.
  • Providing income tax information for previous years and the current year.
  • Surrendering or buying back non-exempt assets as determined by bankruptcy regulations.
  • Fulfilling any additional duties requested by the trustee.

Complying with these duties is crucial to achieving a successful discharge from bankruptcy.

4. Bankruptcy Discharge

Upon completion of all required duties and meeting the necessary criteria, you become eligible for a bankruptcy discharge. An automatic discharge is granted in most cases, meaning you do not need to appear in court. This discharge releases you from your debts, and a Stay of Proceedings prevents creditors from contacting you further. However, certain types of debts are not dischargeable through bankruptcy, such as support arrears or debts obtained through fraud.

The length of your bankruptcy depends on various factors, including whether it is your first bankruptcy and if you are required to make surplus income payments. In a first-time bankruptcy without surplus income, the discharge can be obtained in as little as nine months. The trustee will provide you with detailed information regarding the expected duration of your bankruptcy.

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Bankruptcy or Debt Management Plan?

While bankruptcy may be a viable solution for some individuals, it is important to explore alternative debt relief options before making a final decision. One such option is a debt management plan, which allows you to repay your debts with the assistance of a credit counseling agency. To determine the most appropriate path for your specific situation, consider filling out a debt relief form to receive more information on debt management plans and other available programs.

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


Bankruptcy in Nova Scotia serves as a legal process to help individuals regain control of their finances when overwhelmed by debt. While it offers benefits such as protection from debt collectors and potential student loan forgiveness, it also carries disadvantages, including limited career opportunities and long-term credit repercussions. By understanding the bankruptcy process, fulfilling your duties, and exploring alternative debt relief options, you can make an informed decision to regain financial stability and pave the way for a better future.

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BankruptcyCanada has been a lifesaver for us. Without them, we would have been overwhelmed, merely meeting the bare minimum payments on 15 different cards without making any real progress. Filing bankruptcy has allowed us to get out of debt, stop collection calls and a wage garnishment and get our life back on track.