Frequently asked questions
Does bankruptcy cover all debts?
Bankruptcy will eliminate most of your debts, particularly unsecured debts such as credit card bills, medical bills, and payday loans. You may still be required to make payments on your secured debts, such as your mortgage or car loan. Other debts that cannot be eliminated include court-imposed fines, debts incurred by fraud, alimony or maintenance payments, damages awarded by a Civil Court for intentional bodily harm, sexual assault, or wrongful death, and student loans if the bankruptcy occurs within seven years of completing your studies.
How do I know if bankruptcy is right for me?
If you’re considering bankruptcy, it’s likely because it feels like the only remaining option. Before proceeding, however, it’s important to ensure you’ve explored all alternatives—especially consumer proposals. While bankruptcy isn’t the right solution for everyone, in certain circumstances it is the best and only option. Once you file, all collection calls and legal actions stop immediately, and you are legally protected. Late fees and interest are frozen as well. Most importantly, the vast majority of bankruptcies in Canada are automatically discharged after just nine months, meaning most people can begin rebuilding their financial lives far sooner than they expect.
Do I qualify for bankruptcy?
To be eligible for personal bankruptcy, you must reside, do business, or hold property in Canada, be unable to pay your debts, and owe at least $1,000 in unsecured debts. In addition, the total amount you owe must exceed the value of the assets you own.
Will bankruptcy lower my credit rating?
Filing for bankruptcy does affect your credit rating and will appear as an R9 on your credit report. A first bankruptcy remains on your report for six years; a second, for fourteen. However, if you are already unable to qualify for a loan, your credit rating is likely already low—bankruptcy can actually be a first step toward rebuilding your credit by eliminating overwhelming debt and allowing you to start fresh.
You have options
It might not feel like it, but you do have options to restore your financial health. Explore the different routes below. Remember: financial setbacks don’t define you—how you move forward does. A fresh start is always possible, and the right plan can help you regain control and rebuild with confidence.
