Should You File Bankruptcy in Canada if Living Abroad?

Filing Canadian Bankruptcy From a Different Country

Like many countries around the world, Canada has strict rules and laws when it comes to finances.

You will sign complex contracts when you take on debt, binding you to agreements that dictate how much you have to pay back each month.

Of course, though, these contracts will also include the action that your creditor can take if you fail to make your repayments.

In most cases, this will give them the power to make demanding phone calls, send threatening letters and emails, and even take you to court.

But what happens when you no longer live in Canada when companies start chasing you for the money you owe?

This page will be answering this question, along with exploring whether or not you should file for bankruptcy in Canada if you’re living abroad.

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Do Canadian Creditors Have Power Overseas?

In short, the answer to this question is a firm “no”, but diving deeper will reveal that this is more complicated than you might expect.

No matter where you go in the world, creditors will always work as hard as they can to find you.

This means that you may continue to receive letters, phone calls, and other harassment until the debt is settled.

Beyond this action, though, they will struggle to do anything that will actually force you to pay back the money you owe.

It will be extremely difficult for them to take you to court in another country.

Lending laws will be different, and the legal system in the country you’ve moved to may not recognize your agreements as valid documents.

This will also be a very expensive process for lenders to go through, often costing more than the money they’re owed in the first place.

While they may struggle to kick off a lawsuit in your new home country, they will still be able to take you to court in Canada.

They have to give you a fair warning for this but can proceed with the case no matter whether or not you’re there, and this means that you could face judgements or lawsuits if you ever return to Canada in the future.

Will International Debt Impact Your Credit Report?

Many lenders and financial companies operate internationally, with examples like Equifax.

Fortunately for debtors, though, this doesn’t mean that they are able to share information about your credit history between countries.

Your credit report will always be unique to the country you call home, and this means that lenders in other countries won’t be able to see the impact of your past debt.

Of course, though, much like the legal side of an issue like this, you will still have to deal with your poor credit reports if you plan to return to Canada in the future.

How Will Cross-Border Bankruptcy Work In Canada?

Before deciding whether or not you should file for bankruptcy, it makes sense to think about the work that will have to go into a process like this.

It won’t be easy to handle bankruptcy from another country, and you will have to visit Canada several times throughout this process.

To get the ball rolling, you will need to meet at least one of the three following criteria:


  • You’ve conducted business in Canada within the last year.


  • You’ve been a resident in Canada within the last year.


  • The majority of your assets are within Canada.


These terms are quite broad, and this means that they can be quite flexible.

For example, someone who has lived in the US for five years but works for a Canadian company may be able to file for bankruptcy in Canada.

Of course, you will also need to have some debt with Canadian creditors to go through this process.

Alongside the basic requirements, there are also a number of logistical challenges that need to be overcome when you’re filing for bankruptcy in Canada but live overseas.

You will need a Canadian address, but this is just the start, and there are a lot of steps you will need to take as you go through this.



  • You will need to attend two face-to-face counselling sessions in Canada.


  • While rare, you may be asked to attend creditor meetings or a discharge hearing in Canada and will have to commit to this when you make the original filing.


  • You will have to declare all of your assets, whether or not they are in Canada. Your trustee can sell these to cover your debts, though this will be difficult and is usually more expensive than its worth.


  • You will need to declare all of your debts, including those with lenders that operate outside of Canada.


This is a lot of work and will involve many trips to and from Canada before the process is over.

While it might be hard to predict when you will need to file for bankruptcy, it will make your life much easier if you kick this process off before you move as all of the meetings and hearings you have to attend will take place in Canada.

Using Bankruptcy Canada To File For Bankruptcy

Bankruptcy Canada is a fully-licensed insolvency trustee with more than two decades of experience working with complex financial situations.

We’ve worked to help countless clients with their overseas bankruptcy filings, and have all of the skills and resources you need to handle this process smoothly.

We always recommend that you take a proactive approach with your money, even if you might be able to get away with ignoring it.

Filing for bankruptcy is a common process, and it could save you a lot of trouble in the future if you ever plan to return to Canada.

Of course, though, we also recommend that you speak to a financial expert before you dive into something like this.

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Personal Bankruptcy in Canada
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