How Long Does Bankruptcy Last in Canada?

Length of Bankruptcy

One of the main factors affecting the length of time you will be in bankruptcy is your income.

Our bankruptcy calculator will tell you how much a bankruptcy will cost you and how long you will be in bankruptcy.

The rules regarding the length of time in bankruptcy:

• A first time bankrupt without surplus income requirements will be eligible for a bankruptcy discharge in 9 months;
• A first time bankrupt who has surplus income payments required will receive their discharge from bankruptcy in 21 months, unless the court imposes a longer term;
• A person filing bankruptcy a second time who doesn’t have any surplus income payments will receive their bankruptcy discharge in 24 months;
• A second time bankrupt who has excess income payments required will receive their bankruptcy discharge in 36 months.

The minimum cost of filing bankruptcy in Canada is $1,800, which can be paid over 9 months.

How the Income Standards are Set:

Each year the Office of the Superintendent of Bankruptcy sets the income standards that are derived by the Low Income Cutoffs (LICO) released by Statistics Canada.

It uses the before-tax LICO for urban areas with 500,000 or more in population.

The standards are then increased by the current year’s Consumer Price Index (CPI) plus an adjustment respecting the current years expected CPI.

These standards are then passed on to trustees for them to follow.

How the Income Standards are Applied:

Superintendent’s Standards – Total Monthly Surplus Income

Please refer to this page for a surplus income chart and an explanation of how the payments are calculated, including an example of a couple where only one person is filing bankruptcy.

A bankruptcy can be extended if you do not complete your duties on time or you are not eligible for an automatic discharge for some other reason.

Some bankrupts will be required to pay surplus income, which will also extend the length of a bankruptcy.

If you have file a consumer proposal in the past, your debtors might oppose your discharge.