How Declaring Bankruptcy Works in Canada

How Does Filing Bankruptcy Work?

Speak to a Licensed Trustee About Bankruptcy

The main purpose of Canadian bankruptcy law is to give a person the chance to get a fresh start by eliminating their overwhelming  debt that they have no hope of repaying.

Most people who file bankruptcy keep all their assets and are out of bankruptcy in nine months." In most cases all unsecured debts are erased upon the discharge (when the person is out of bankruptcy).

Need Help Reviewing Your Financial Situation? Contact a Licensed Trustee for a Free Debt Relief Evaluation

Call 877-879-4770


The minimum cost of a bankruptcy is $1,800 payable at the rate $200 each month for 9 months.
Our bankruptcy cost calculator will give you the exact bankruptcy cost based on your personal situation.
People find bankruptcy is the quickest and cheapest method to get out of debt but it is not for everybody. You might find that you will be better off seeking alternatives to bankruptcy as a way to get debt free. Fortunately, our trustees can help you determine if going bankrupt or an alternative solution is right for you. Regardless of the solution you choose, you will receive credit counseling sessions to help you understand your spending habits and gain budgeting skills.

Find out why you can set your mind at ease when dealing with a Licensed Insolvency Trustee

  • Trustees are regulated by the Government.
  • The cost of bankruptcies and consumer proposals are regulated by the Government.
  • Fees are the same no matter which trustee in Canada you use.
  • If there is a dispute mediation is available. Trustees are the best trained and educated debt professionals.
  • Most have a university education and are CPAs.
  • Must pass a rigorous three year bankruptcy law course.
  • Are investigated by the RCMP before being granted a Trustee License.
  • Ongoing education is mandatory.

Other Qualifications of Trustees

  • Trustees are officers of the court.
  • Trustees do not work for the debtor or the creditors but have obligations to both.
  • Trustees are subject to strict codes of ethics set by the government and the CPAs.
  • Trustees are the only debt professionals who can prevent creditors, including CRA, from taking collection action against you.
  • Trustees are the only debt professionals who can stop wage garnishees.

How bankruptcy works is also by providing protection for a person filing bankruptcy

As soon as a bankruptcy or consumer proposal is filed, all actions including collection calls and wage garnishments, by law, must stop. If you don't have surplus income payments your first bankruptcy will be over in only 9 months. A record of your filing will remain on your credit report for several years, although you will be able to start working on your credit as soon as you have finished your bankruptcy.

Protection is also provided to bankrupts by the fact that

What happens when you declare bankruptcy in canada?

Declaring bankruptcy is a good way to get out of debt. The bankruptcy process allows you to clear unsecured debts such as credit cards, lines of credit, and tax debts that you to your unsecured creditors. Secured creditors cannot be included in your bankruptcy, as secured debts cannot be impacted by your case. While going bankrupt will eliminate most of your debts, certain debts survive the bankruptcy:
  1. Court imposed fines;
  2. Money that you owe for items obtained through theft;
  3. Money gained through misrepresentation;
  4. Child support and alimony payment arrangements;
  5. Damages that were awarded by the court for sexual assault or intentional infliction of bodily harm;
  6. Student loans if going bankrupt occurs prior to or within 7 years after finishing the studies.

What you can keep:

Your province or Territory sets the equity in assets you can keep. Remember that assets include a tax refund as at the date of bankruptcy and for the year of bankruptcy. Also included in assets are such things as inheritances, insurance settlements etc.

The cost and how long you will be in bankruptcy.

The cost and how long you will be in bankruptcy depends on:
  1. Your income and family situation;
  2. How much you earn;
  3. Whether you have been bankrupt before.
Our Calculator will tell you the cost and how long you will be in bankruptcy.

Overview of the Steps in a Bankruptcy

This article will give you a good overview of the steps in a bankruptcy.

Need Help Reviewing Your Financial Situation? Contact a Licensed Trustee for a Free Debt Relief Evaluation

Call 877-879-4770


The Superintendent of Bankruptcy regulates all cases involving a bankrupt.

How Bankruptcy Works from Earl Sands

Please read this to find out how bankruptcy works.

How to Choose a Trustee in Bankruptcy.

Please read this to find out how to choose a trustee in bankruptcy.