Personal bankruptcy in Canada: process, duties and alternatives

Start with a Licensed Insolvency Trustee, who reviews your finances and explains formal insolvency options. Ask for a comparison before deciding to file. Make sure you understand which documents you would sign, when filing happens, and how you will receive copies. DebtHelpers can be an enquiry starting point; it does not administer bankruptcies.

Assets and exemptions need case-specific review. Provincial rules, equity, ownership and secured borrowing can affect the answer. A page about bankruptcy in Ontario cannot establish the same outcome for an Alberta resident. Bring the asset values and outstanding secured balances to the LIT; do not assume that either “you lose everything” or “you keep everything” is accurate.

Bankruptcy involves cooperation with the trustee, disclosure and other required duties, including counselling. Ask how to report income and expenses, what payments may be required, and how a change in income is handled. Build a calendar for the requirements the LIT identifies. Keeping communication open is part of completing the process.

No. The OSB describes a possible automatic discharge after nine months for a first bankruptcy when conditions are met, including no opposition and no surplus-income payment requirement. Surplus income can extend that first-bankruptcy period to 21 months. Other circumstances change the timeline. Ask the LIT which assumptions apply to the estimate for you; filing and discharge are separate milestones.

Section 178 identifies debts that are not normally released, including support, certain fines, certain fraud-related debts and student loans within the applicable period. Identify these before comparing options. Also ask about any guarantor or joint borrower: your process is not a promise that another person’s liability disappears.

Instead of asking only “How much is bankruptcy?”, ask the trustee to compare the full expected obligations with a consumer proposal and any practical repayment route. Explain the outcomes that matter to you: a reliable vehicle for work, predictable monthly commitments, or knowing how a jointly held account is affected. Ask for a written explanation of the material differences.