How Do I Declare Personal Bankruptcy?

In Ontario, a bankruptcy is a legal process that can only be filed through a federally Licensed Insolvency Trustee. By filing bankruptcy you:

  • receive immediate protection from your creditors,
  • stop wage garnishments and other legal action and
  • begin the process of eliminating your debts.

If you are considering declaring bankruptcy in Ontario, your first step should be to contact a trustee for a free initial consultation. They will help you consider all of your debt relief options including ways you can avoid bankruptcy.

Filing The Bankruptcy Paperwork

If you decide to declare bankruptcy, your trustee is responsible for administering all aspects of your bankruptcy. Once you have signed the paperwork the trustee will electronically file the documents with the Office of the Superintendent of Bankruptcy, a division of the federal government that monitors all bankruptcies in Canada. Your bankruptcy will start immediately after the paperwork is filed. Within five days of filing all of your creditors are notified that you have filed bankruptcy, and they are directed to the trustee to file their claim for the amount they are owed.

Duties During Your Bankruptcy

During the bankruptcy period you are required to do the following:

  • Provide the trustee with your tax information to file your outstanding tax returns, including the current year;
  • Submit each month copies of your pay stubs and proof of other income;
  • Attend two credit counselling sessions to help with budgeting, and help you get a fresh start at the end of the bankruptcy;
  • Make the required contribution (including surplus income payments) to your bankruptcy estate;
  • Surrender any non-exempt assets;
  • Complete any other duties requested by the trustee.

Receiving Your Bankruptcy Discharge

At the end of the bankruptcy period, you are discharged from bankruptcy. This discharge releases you from your legal obligation to repay the debts covered by your bankruptcy.

The length of your bankruptcy will depend on whether this is your first bankruptcy, whether you were required to make surplus income payments, and whether or not you have completed all of your duties. If this is your first bankruptcy and you do not have any surplus income you could be discharged within nine months.

If you choose to go bankrupt, you will be able to get rid of most, if not all of your debts, but your ability to get credit in the future could be substantially impacted.

Since the rules can be complicated depending on your situation, we suggest you contact a trustee. Our trustees in Ontario offer a free initial consultation; to arrange for one and get your bankruptcy Ontario related questions answered, please contact us today.

Remember, financial problems do not usually go away on their own. The sooner you take action, the sooner you will get a fresh start.