Filing For Bankruptcy in Ontario

Bankruptcy is a legal process designed to provide relief to individuals and businesses struggling with insurmountable debt. However, the decision to file for bankruptcy is not a step to be taken lightly. In Ontario, Canada, there are specific laws and procedures that one must follow. This comprehensive guide will walk you through the process of Filing For Bankruptcy in Ontario, helping you understand what to expect, and the steps you need to take.

Understanding Your Financial Situation

Filing For Bankruptcy in OntarioBefore making any decisions, it is crucial to evaluate your financial situation thoroughly. Ask yourself, do you genuinely need to file for bankruptcy? Are there less drastic alternatives that may be better suited to your needs? You might need some form of intervention if:

  • You have missed mortgage or loan payments.
  • You are using credit card cash advances to pay bills, and your credit cards are almost always at their limit.
  • You are receiving threatening calls from collection agencies.
  • You have been given notice of legal action against you to collect your debts.

If debt is causing significant problems in your life, it’s time to explore debt relief options, which may or may not include bankruptcy.

Meeting a Licensed Insolvency Trustee (LIT)

The next step in Filing For Bankruptcy in Ontario is to seek advice from a professional authorized to administer government-regulated insolvency proceedings, a Licensed Insolvency Trustee (LIT). An LIT can halt ongoing and pending legal and collection action, including lawsuits and garnishments. They will explain the merits and outcomes of various options available to you, guiding you towards the appropriate debt solution for your unique situation.

Paperwork and Filing

If bankruptcy is the chosen option, your LIT will assist with the completion of the required forms. The paperwork for Filing For Bankruptcy in Ontario includes an “Assignment,” where you declare that your LIT is taking control of your property for the benefit of your creditors, and a “Statement of Affairs” that lists your assets, liabilities, income, and expenses.

Bankruptcy Duties and Commitments

As you proceed with the bankruptcy process, you will be required to fulfill certain duties. These duties include:

  • Attending two mandatory counseling sessions to help you build better financial habits through budgeting and money management.
  • Filing monthly reports on your income and expenses.
  • Making payments for equity in assets, surplus income, and for administrative costs.
  • Providing the necessary information for your LIT to file your personal income tax return for the year of bankruptcy.

Discharge from Bankruptcy

The final step in bankruptcy is the discharge. Upon completion of your duties, you will be eligible for discharge in nine months or longer, depending on your situation. This means that you will be released from the obligation to pay the debts you had when you filed bankruptcy.

Moving On

With your debt burden relieved, you can now work on re-building your credit score. This will be an important topic of conversation during the mandatory counseling sessions with your Licensed Insolvency Trustee. Becoming debt-free is not an easy journey, but with the right guidance and commitment, it is possible.


Declaring bankruptcy is usually a last resort, but it may be the right debt solution for you to get relief from your debt burden and to help you start living your life again. If you want to learn more about the bankruptcy process—or about alternative debt solutions available to you—simply contact your local MNP Licensed Insolvency Trustee to book a free consultation.

Remember, financial problems do not usually go away on their own. The sooner you take action, the sooner you will get a fresh start.

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.