A condition is not the same as a filing
Read the key facts before you choose.
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A condition is not the same as a filing
Section 2 of the Bankruptcy and Insolvency Act defines an insolvent person using specific requirements and financial tests. Bankruptcy involves a formal legal status and process. A missed payment, a poor score or a calculator result is not a complete application of the statutory definition. Get an assessment rather than diagnosing your legal position from one symptom.
| Term | What it refers to |
|---|---|
| Financial difficulty | The practical problem you are experiencing |
| Insolvency | A condition subject to legal definitions and tests |
| Bankruptcy | A formal process and legal status |
| Enquiry | A request for information or contact, not a filing |
How are they different?
See what is the same and what is not.
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An assessment should discuss alternatives
The OSB explains that LITs help people understand options and administer formal insolvency proceedings. Ask why a particular route fits and what the alternatives would require. A consumer proposal, creditor arrangement or repayment plan is not simply bankruptcy under another name. You should understand the actual process being recommended.
What should you ask?
See what to have ready and what to ask.
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Prepare facts rather than a label
Instead of starting with “I think I am bankrupt,” explain what changed: income fell, interest rose, payments were missed or an account entered collection. Bring a complete picture of debts, assets and income through the professional’s secure process. This gives the assessor evidence to work with rather than a conclusion they must first unpack.
What will it cost?
Check what you may pay now and over time.
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Keep urgent matters separate from general research
If you have court papers or a collection deadline, tell the appropriate professional immediately. Reading this guide or requesting a callback does not pause a deadline. Do not rely on this website for urgent assistance or assume that a future filing would address every debt or legal issue in the same way.
What to have ready
- What changed in your ability to pay.
- Every debt and whether someone else is liable.
- A complete asset and income picture.
- Any dated legal or collection notice.
You do not need account numbers, your SIN, bank passwords, or files to start.
Does talking to a trustee put me into bankruptcy?
No. A discussion is different from entering a formal proceeding. Ask the LIT to explain the specific documents, decisions and filing steps before you agree to an option.