I am in financial trouble and want to know if bankruptcy is a solution for me. Where do I begin?
There are a number of reputable non-profit organizations that offer credit counselling to consumers, and may be able to help you put together an informal agreement with your creditors.
If a more formal remedy is needed, a licensed bankruptcy trustee can help you understand the various options available to deal with debts, including proposals and bankruptcy. To locate a licensed trustee near you, consult the Yellow Pages of your telephone directory under
“Bankruptcy” or “Trustees in Bankruptcy”, or go to the
trustee's directory on this Web site.
Your first meeting with a trustee is called an assessment interview. The Trustee will review your financial situation and explain what options are available and the consequences of each. In most cases, trustees do not charge for the initial interview.
If you decide to file for a bankruptcy, the trustee will help you prepare the necessary documents, and will file them with the
Official Receiver. Sometimes this can de done on the same day; in other cases it may take a few days to gather all the information needed, especially if your financial situation is complex.
How can I declare bankruptcy?
If you wish to declare bankruptcy you must first retain the services of a trustee in bankruptcy. To locate a licensed trustee near you, consult the Yellow Pages of your telephone directory under “Bankruptcy” or “Trustees in Bankruptcy”, or go to the
trustee's directory on this Web site.
The trustee will review your financial situation and will explain the various options that are available to you, such as informal arrangement, debt consolidation, orderly payment of debts, voluntary deposit, consumer proposal, proposal and bankruptcy.
Only an insolvent person may declare bankruptcy. You are considered to be an insolvent person when:
- you are not bankrupt already (not currently undischarged bankrupt)
- you owe at least a $1000.00; and
- you are unable to meet your regular payments as they become due; or
- you would not be able to pay all of your debts if all of your assets were sold;
What does it cost to declare bankruptcy?
For information on this matter, please consult the
“Payments and Surplus Income” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
Who pays the trustee?
The trustee receives part of the amounts from the sale of your property and from the payments that you might be required to pay during the bankruptcy.
For more information on this matter, please consult the
“Payments and Surplus Income” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
Because of my financial situation, I am unable to pay the trustee. Can I declare bankruptcy without paying anything?
If you are overburdened by debt and can't obtain the services of a trustee, the Office of the Superintendent of Bankruptcy in your area will help you find one through its Bankruptcy Assistance Program. You will be eligible if:
- you have tried to obtain the services of a trustee after contacting at least two (2) participating trustees;
- you are not involved in commercial activities; and
- you are not in jail.
One of the participating trustees will be designated as your trustee. You will still have to pay certain amounts regularly; but those amounts will be smaller to ensure that you can maintain a reasonable standard of living.
I have not been discharged from my first bankruptcy. My trustee has been discharged. How do I obtain my discharge?
You should contact the trustee who handled your bankruptcy. The trustee will inform you of the reasons why you did not obtain your discharge. You may have to fulfill certain conditions in order to obtain this discharge. If you do not remember the trustee's name, contact the Office of the
Superintendent of Bankruptcy in your area for assistance.
I do not want to include all my creditors in the bankruptcy, especially the family members and friends who helped me. Can I continue to pay them back and include the other creditors in the bankruptcy?
No. All your debts must be included in the bankruptcy. All of your creditors must be treated equally. If you make a payment to one of your creditors (ex: a family member) without paying the others, the trustee is entitled to demand the reimbursement of such payment. Be aware that such
action may constitute an offence according to the Bankruptcy and Insolvency Act. However, nothing prevents you from repaying your family, friends or any other creditors once you are discharged from the bankruptcy.
I owe alimony (or maintenance) payments to my former spouse, from whom I am separated. Can I declare them in the bankruptcy so that I can be released from that debt?
For information on this matter, please consult the
“What is the effect of a bankruptcy discharge” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
Another person has guaranteed one of my debts to the bank (by endorsing a loan). Will that person be required to repay my debt if I declare bankruptcy?
For information on this matter, please consult the
“Co-signers” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
I want to obtain a copy of my certificate of discharge. My trustee tells me that my file was destroyed and that a copy is available at my local Office of the Superintendent of Bankruptcy.
When the trustee cannot provide you with a document concerning your bankruptcy, you can obtain the document from the
Office of the Superintendent of Bankruptcy and in some cases also the bankruptcy court. That court may not keep any records. You can then apply to the Office of the Superintendent of Bankruptcy located in the place where you lived at the time of the bankruptcy to obtain
a copy of the document you want.
The information in my record at the credit bureau is incorrect. What can I do?
Credit bureaus are independent agencies that have no business relationship with the Office of the Superintendent of Bankruptcy. You must contact them directly.
For information on this matter, please consult the “
Credit rating and re-establishment of credit” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
When can I get credit again?
Immediately after filing, anyone can apply for credit during your bankruptcy; however, you must disclose your bankruptcy to the creditor. For information on this matter, please consult the “
Credit rating and re-establishment of credit” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
I have a student loan. Can I eliminate this debt by declaring bankruptcy?
A discharge from bankruptcy does not release you from student loans when the bankruptcy occurs before the date on which you ceased to be a full- or part-time student or within 10 years after that date. Therefore, student loans are only discharged through the bankruptcy process if you have
completed your studies at least 10 years prior to the date of your bankruptcy. After 10 years have expired, you can apply to the bankruptcy court for it to be discharged.
For additional information on this matter, please consult the “
What is the effect of a bankruptcy discharge” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
Whom should I contact to complain about a trustee's conduct?
The Office of Superintendent of Bankruptcy records and acts on complaints concerning allegations of wrongdoing by any person involved in the insolvency process. It also has to enforce the professional standards applicable to trustees. Your complaint will be acknowledged (by telephone or in
writing) within three business days after it is received. A staff member will try to resolve the complaint and inform you about it by telephone or in writing within 30 business days. Some complaints, however, are complicated and take more time. You will be notified if this is the case within the
30-day period.
The addresses for the Office of the Superintendent of Bankruptcy may be consulted on the OSB's Web site at:
http://strategis.ic.gc.ca/epic/site/bsf-osb.nsf/en/br01003e.html
Can I declare bankruptcy myself without a trustee?
No. You must meet with a trustee for assessment purposes. The trustee will advise you and suggest alternatives other than bankruptcy to solve your financial problems. For all intents and purposes the trustee then files formal documents with the Official Receiver.
For additional information on this matter, please consult the “
Where to go” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
If I declare bankruptcy, do I have to hand over my car or other assets?
In certain provinces, vehicles that have a specific value are exempted from seizure by the trustee.
For information on this matter, please consult the “
Assets and property” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
One of my creditors tells me that he will oppose my discharge. What does it mean?
For information on this matter, please consult the “
When is a bankrupt discharged” and the “
What kind of discharge orders can a judge or registrar issue?” sections from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
I have declared bankruptcy and been discharged. The Canada Revenue Agency has not been informed of this, and my tax refunds are being sent to the trustee. I am told that I must send a copy of my certificate of discharge to the Agency to straighten
out the situation. Is this true?
When you are discharged from the bankruptcy, the trustee will give you a certificate of discharge. The trustee is not obliged to send a copy of that certificate to the Canada Revenue Agency. You will have to provide a copy of the certificate when someone requests it. You should also consider
sending a copy to the
Office of the Superintendent of Bankruptcy.
My former spouse has declared bankruptcy and creditors are claiming amounts from me for the debts we incurred jointly. Do I have to pay my former spouse's share? What action can I take?
If you and your former spouse have contracted a joint debt, the creditor might be able to seek payment from either one of you. You may therefore become liable for a part or the entire debt owed to that creditor. However, if you pay the part of the debt that was owed by your former spouse, you
then become a creditor in his/her bankruptcy. As a creditor, you can file a proof of claim with the trustee. See also
Question 9.
What are the advantages of making a consumer proposal rather than declaring bankruptcy?
Generally, in a proposal, you get to keep your assets.
For information on this matter, please consult the “
Consumer proposal” section from the publication entitled:
Dealing with Debt: A Consumer's Guide published on our Web site.
I have declared bankruptcy and been discharged. One of my creditors has asked me to reimburse my debt which was previously declared in my bankruptcy file. Do I have to repay this debt?
No, you are not obliged to pay this creditor since an order of discharge generally releases you from your debts.
However, a discharge from bankruptcy does not release you from certain debts such as:
- alimony payments;
- fines or penalties imposed by a Court;
- debt or liability arising out of fraud or embezzlement; and
- debts for student loans when the bankruptcy occurs before the date on which you ceased to be a full- or part-time student or within 10 years after that date.
I have been discharged from bankruptcy and one of my creditors alleges that I have obtained a credit loan by false pretences and fraudulent misrepresentation. Therefore, this creditor claims full reimbursement of the loan. Do I have to repay
this debt?
In order to obtain reimbursement of this debt, your creditor must have a Court ruling stating that you have indeed obtained a credit loan through fraudulent misrepresentation or by false pretenses.
See also Question 3 of the Creditors FAQs.
Bankruptcy
