How to File Bankruptcy in Canada

One of the world’s greatest financiers and world’s richest men, W.B. is reported as saying that the most important thing to do when you find yourself in a hole, is to “Recognize where you are and stop digging.” This sounds ridiculously simple, but knowing when to stop and when to consider a significant change and seek professional help or consider filing for bankruptcy, is difficult to do. In order to do so, you have to believe that your financial situation is serious and you can’t make it on your own.

For most people in Canada, the prospect of having to file bankruptcy is not their first choice. It is important to recognize however, that a bankruptcy filing may be one’s best and sometimes only option.

Almost every client we have that decides to file bankruptcy in Canada says exactly the same thing, and that is, “I wish I would have filed bankruptcy sooner!” As a general observation, our Bankruptcy Trustees see that people don’t seek our help to file bankruptcy until they have beaten themselves up emotionally and once they make a decision to file bankruptcy, and see how quickly the stress dissipates, they beat themselves up again for not filing sooner. Hindsight is, of course, 20/20.

How do I File Bankruptcy in Canada?

Our presentation on how to file bankruptcy in Canada details six steps in the bankruptcy process from the first contact with a bankruptcy trustee to registration of bankruptcy documents and notification of creditors.

Learning how to file bankruptcy is the easy part. Deciding whether a bankruptcy is the right option is more complicated and we encourage you to find out more. We offer clear explanations and practical solutions to debt relief with free, no obligation consultations in a relaxed environment.

What Happens After I File Bankruptcy and My Creditors are Notified?

As you might expect, there is more to filing bankruptcy than notifying your creditors and registration of paperwork and documentation. In return for forgiveness of your debts, the Federal Government, specifically the Office of the Superintendent of Bankruptcy, imposes a series of duties you MUST complete while bankrupt, the principal obligations are outlined in a Power Point Presentation:

See our cost to file bankruptcy page to see the other factors which affect the overall cost of filing bankruptcy. Our Bankruptcy Trustees can be reached by selecting one of the local offices or meeting locations identified on the left hand side bar of this website or by e-mailing us.

How to File Bankruptcy In Canada

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Contact a Bankruptcy Trustee to Make an Appointment

You need to initiate contact with a Licensed Trustee in Bankruptcy who can review your situation with you, discuss options and provide you with a professional assessment and feedback regarding the prospect of filing bankruptcy. This usually takes the form of a free, no-obligation, initial consultation and that usually takes 45 minutes to an hour.
Meet with a Bankruptcy Trustee to Discuss Options and Ask Questions

At your initial meeting, a professional Bankruptcy Trustee will review your financial details and outline the options and any alternatives to filing bankruptcy that you may have. The decision to file bankruptcy depends not only on how bad your finances are, but how long you have been struggling and whether you have the energy to enter a prolonged debt recovery program or are looking for a more timely solution.
Complete a Financial Information Summary

If, after researching your options with a Licensed Bankruptcy Trustee, you decide that filing bankruptcy is your best option, and want to start the process, the Trustee, with your input, has to put together a Statement of Affairs. In order to do so, your Bankruptcy Trustee may ask you to fill out and complete an Information Summary or form. Our Licensed Bankruptcy Trustees believe that making a decision to file bankruptcy is stressful, and find that our clients prefer that we complete the forms together.
The Bankruptcy Paperwork and Documents are Prepared

Once the Information Summary and Statement of Affairs are completed, the Bankruptcy Trustee will prepare the required bankruptcy documentation and paperwork for your signature and filing.
The Bankruptcy Documents are Signed and Submitted for Registration with the Federal Government

Once all paperwork is signed, they are scanned and submitted to the Office of the Superintendent of Bankruptcy in Ottawa electronically, who records all bankruptcy filings, and the Superintendent will issue a Certificate of Appointment, evidencing that you have filed bankruptcy. The Certificate of Appointment provides you with the protection from your creditors. The registration of the paperwork provides you with a legal Stay of Proceedings which prevents your creditors from initiating or proceeding with collection activities. It is at this point that your bankruptcy starts.
The Trustee Receives a Certificate Confirming Bankruptcy and Notifies Creditors

Upon receipt of the Certificate of Appointment, your Bankruptcy Trustee notifies your creditors via mail or fax, that you have filed bankruptcy. All your creditors will receive a copy of the Certificate of Appointment, your Statement of Affairs, and a Proof of Claim form which they can use to file their claim in bankruptcy with the Trustee, and attach evidence in support of the amounts you owe.
Step #1: Contact a Bankruptcy Trustee to Make an Appointment

Step #2: Meet with a Bankruptcy Trustee to Discuss Options and Ask Questions

Step #3: Complete a Financial Information Summary

Step #4: The Bankruptcy Paperwork and Documents are Prepared

Step #5: The Bankruptcy Documents are Signed and Submitted for Registration with the Federal Government

Step #6: The Trustee Receives a Certificate Confirming Bankruptcy and Notifies Creditors

Duties after you file Bankruptcy

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File Monthly Income and Expense Statements

You will be required to file monthly statements in a prescribed form, detailing your earnings / income and all household expenses. Your Bankruptcy Trustee will provide you with the prescribed forms for completion by you and submission at the end of each month. As part of this process, you will be required to attach proof of and documentation in support of all your earnings.
Attend Two Financial Counseling Sessions

You will be required to attend two Financial Counseling Sessions prior to the finalization of your bankruptcy. Trustees may provide these sessions in a group setting, where a number of individuals who file bankruptcy meet together in a meeting room and participate in group discussions. As we believe your privacy is important, our Licensed Bankruptcy Trustees do not offer group sessions. We offer personal one-on-one counseling sessions or if you prefer, sessions together with your spouse.
Provide Your Income Tax Information

As part of your bankruptcy file, you must provide your Trustee with your Income Tax information, so that your tax status is finalized and any tax obligations are written off and any refunds are dealt with prior to your discharge from bankruptcy.
Attend Meeting(s) as Required

Although rare, there are situations where your creditors or the Office of the Superintendent of Bankruptcy may request you to attend a meeting and answer questions or respond to enquiries. Attendance at these meetings is mandatory, and failure to do so can stop you from getting your discharge from bankruptcy and the forgiveness of your bills / debts.
Ensure Your Address and Phone Number(s) are Kept Current

You must keep your Trustee advised of your address and phone number throughout the period of your bankruptcy. The Bankruptcy and Insolvency Act and the filing of a bankruptcy does not stop you from moving to other parts of Canada, or even outside of Canada, but you must make yourself available so that your Bankruptcy Trustee can contact you when necessary.
Calculate Monthly Net Earnings and Remit a Share of Your Income

During the period of your bankruptcy file, you may be required to calculate and share a portion of your earnings with your creditors, making a monthly payment to the Bankruptcy Trustee for distribution to your creditors. This is separate and apart from your payment of the Trustee's fees and costs to administer your bankruptcy. The size of your monthly payment ranges from payment of the basic costs to administer your bankruptcy to a significant portion of your income. The amount of your payment depends on how much you earn and how many people you have in your family. Individuals who file bankruptcy will find that individuals who have fewer people in their family and make more, will be required to pay more to their bankruptcy estates. Our Licensed Bankruptcy Trustees would be happy to meet you to discuss how these payments are determined and work through a sample calculation with you before any decision to file bankruptcy is made.
Step #1: File Monthly Income and Expense Statements

Step #2: Attend Two Financial Counselling Sessions

Step #3: Provide Your Income Tax Information

Step #4: Attend Meeting(s) as Required

Step #5: Ensure Your Phone Number(s) and Address are Kept Current

Step #6: Calculate Monthly Net Earnings and Remit a Share of Your Income

How to File Bankruptcy in Canada

How do I File Bankruptcy in Canada?

What Happens After I File Bankruptcy and My Creditors are Notified?

How to File Bankruptcy In Canada

Contact a Bankruptcy Trustee to Make an Appointment

Meet with a Bankruptcy Trustee to Discuss Options and Ask Questions

Complete a Financial Information Summary

The Bankruptcy Paperwork and Documents are Prepared

The Bankruptcy Documents are Signed and Submitted for Registration with the Federal Government

The Trustee Receives a Certificate Confirming Bankruptcy and Notifies Creditors

Duties after you file Bankruptcy

File Monthly Income and Expense Statements

Attend Two Financial Counseling Sessions

Provide Your Income Tax Information

Attend Meeting(s) as Required

Ensure Your Address and Phone Number(s) are Kept Current

Calculate Monthly Net Earnings and Remit a Share of Your Income