How Long Does Bankruptcy Affect Me?

Filing for bankruptcy in Canada is a serious financial decision that will impact your future.

In truth, most individuals should view this as a last resort.

Despite this, bankruptcy is still considered the most appropriate course of action for 125,000 Canadians each year.

It might be the right option for you too – but only after you’ve fully understood every aspect, including how long bankruptcy will affect you for.

Here’s all you need to know before entering the bankruptcy proceedings.

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The Bankruptcy Period Explained

After filing for bankruptcy, the first stage you encounter is the phase in which you are declared bankrupt.

This is also known as “undischarged bankruptcy”, which means you are waiting to be discharged from the bankruptcy proceeding before resuming the road to financial recovery.

It is a legal process that begins from the moment you complete the formal bankruptcy filing.

Under most circumstances, the bankruptcy procedure lasts for nine months and one day.

So, if you are a first-time user with an average level of income, you will stay bankrupt for the best part of a year.

However, when your income surpasses government thresholds, the bankruptcy period is extended to 21 months and one day.

The discharge is only achieved if you successfully perform all of your financial duties.

This includes making payments, attending financial counseling sessions, and providing tax info as well as monthly reports.

Your financial opportunities are severely hindered during the undischarged bankruptcy period, such as:


  • Unable to get a mortgage.
  • Needing to advise lenders of your bankruptcy before taking out a loan or credit agreement.
  • Unable to become a company director or working as an insolvency practitioner.


This is the hardest period of life after filing for bankruptcy, but is a relatively short process.

Once again, though, you should only consider this route when you are ready to satisfy the financial obligations.

On a side note, you should familiarize yourself with the debts that are not covered by the bankruptcy before entering the process.

However, if you’ve heard that it’s impossible to get a bank account during bankruptcy, you will be pleased to learn that this is incorrect.

On the contrary, it’s one of the first things you’ll do after filing for bankruptcy.

Post-Bankruptcy Financial Restrictions

As stated, filing for bankruptcy in Canada is not an issue that should be taken lightly.

While gaining a discharge will lift a weight from your shoulders, there are plenty of financial restrictions to consider.

The first 2-3 years are particularly tough, especially if you want to access additional credit.

However, it should be noted that the bankruptcy will appear on your credit report for at least six years, starting from the date of acquiring the bankruptcy discharge.

While this won’t necessarily preclude you from borrowing large sums of money, especially if you have a good level of income and can prove financial responsibility.

Throughout this post-bankruptcy period, you can expect to encounter;


  • Rejections from several credit agencies, banks, and lenders.
  • Higher interest rates as you are viewed as a bigger risk.
  • Lower limitations on how much you can borrow.
  • Reduced term agreement offerings, meaning you need to make faster payments.


If this isn’t your first bankruptcy, it may appear on your credit history for up to 14 years, which can cause further financial limitations.

What Can Be Done To Soften The Blow?

Despite the financial difficulties caused by bankruptcy proceedings, most individuals that complete the process find that removing the burden of debt is a positive move.

Nevertheless, it’s important to take a proactive approach to recover in style.

A range of credit building techniques can be used to speed up the journey to a better financial situation.

Prepaid secured credit cards are a good example, not least because they do not pose any major risks to you.

Cosigned agreements are another option that may be suitable for some individuals.

As you rebuild your credit score, new forms of credit will become available.

However, you should resist taking on more than you can handle.

Financial responsibility is the key to overcoming the bulk of your post-bankruptcy problems.

It’ll also enable you to secure larger credit agreements far sooner too.

Is Bankruptcy Right For You?

Bankruptcy will affect your financial situation for a long time.

However, the opportunity to start over is often an attractive prospect when multiple debts have spiraled out of control.

Before confirming that this is the right option, though, you should speak to an impartial agent.

Give us a call on (877) 879-4770 to take the first steps today.

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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