Should I Keep My Bank Account in a Bankruptcy in Canada?

Keeping a Bank Account When Going Bankrupt

If you’ve filed for bankruptcy in Canada, you might be wondering whether or not to keep your bank account.

In this article, we’ll explore the options and help you make the right decision.

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Should I keep my bank account in a bankruptcy?

If you’re in the process of seeking advice about filing for a personal bankruptcy in Canada, it is highly likely that a bankruptcy trustee will advise you against keeping your existing bank account.

In most cases, it is beneficial to open a new account with a bank you have not had dealings with in the past before you file for bankruptcy or submit a consumer proposal.

It is also advisable to cancel regular deposits and payments from your regular account and set them up with your new account.

Why is it beneficial to open a new bank account?

If you receive good customer service from your bank, or you’ve been with the same organisation for a long time, you might be reluctant to change.

The trouble with staying with the same bank and keeping your account open is that creditors could gain access to your funds.

If your account is open, creditors could withdraw money from it through debits.

If you have a credit card with the same bank, you could also find that a creditor will take money from your account if you’re unable to pay bills on time.

It’s also important to note that you may have given another bank permission to access your account, for example, when you took out a loan or a mortgage.

Many lenders implement agreements that enable them to access funds, as this increases the likelihood of them receiving their money.

It can be time-consuming to open a new account and switch over direct debits and set up new payments, but the effort will be worthwhile, as you can maintain control of your account.

Understanding your rights

If you’re in a situation where you’re thinking about opening a new bank account before filing for bankruptcy, it’s critical to understand your rights according to the Bank Act and the Bankruptcy and Insolvency Act.

Under these laws, you have the right to:

  • Open a bank account at any bank in Canada, no matter your financial status. A bank can provide reasons other than bankruptcy to refuse your request, but these must be compliant with the regulations set out in the acts mentioned above.
  • Keep your account open during bankruptcy proceedings (providing you have not engaged in any illegal actions).


Once you file for bankruptcy or begin a consumer proposal, you should not be harassed or harangued by creditors or debt collection agencies.

These companies should leave you alone, and they should not be able to withdraw money from your account.


If you’ve started bankruptcy proceedings, or you’re thinking about filing for bankruptcy in Canada, it is wise to open a new bank account with a financial organisation you have no previous dealings with to protect your money.

If you need advice or you have any questions, our team will be happy to help.

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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