How to File Bankruptcy in Canada: A Step by Step Guide
Are you feeling overwhelmed by debt and in need of a fresh financial future? Understanding the bankruptcy filing process and navigating the legal jargon can feel unmanageable, and you might not know where to begin. We understand this is the case for many Canadians here at Spergel, which is why our experienced Licensed Insolvency Trustees are here to walk you through each step of the bankruptcy process.
Bankruptcy is the legal process of clearing any unsecured debts you have to give you a fresh financial start, while providing protection from your creditors. Although many Canadians believe bankruptcy leaves you with nothing, this is far from the reality. To leave you with nothing would be counterproductive, and so you are entitled to keep some key assets, as well as benefit from some other advantages of bankruptcy. To get started with the bankruptcy process, there are a few steps you need to take. Having helped over 100,000 Canadians gain debt relief, we fully understand the intricacies of filing bankruptcy and are here to help you. Unlike other bankruptcy firms, at Spergel, you are assigned your very own Licensed Insolvency Trustee to walk you through the end to end debt relief journey, instead of being passed from person to person. Here’s how to get started with filing bankruptcy today.
Step 1 for filing bankruptcy: review your finances
In order to file bankruptcy in Canada, you need two things: your financial information, and a Licensed Insolvency Trustee – the only professionals in Canada legally able to file bankruptcy. The first step is to consider whether or not you need to file bankruptcy. There are a number of bankruptcy alternatives in Canada, including a consumer proposal which is a less extreme option that can reduce your debt by up to 80% while enabling you to keep your assets. Every Canadian’s financial situation is different, but here are some signs you might benefit from filing bankruptcy:
- You have missed one or more mortgage or other debt repayments
- You rely on credit cards for every day expenses, including groceries
- Your credit cards are usually at their limit
- You are receiving relentless collection calls
- You are receiving threats of legal action, like a wage garnishment, a lien on your property, or a bank account freeze
We recommend getting important documents about your financial situation including credit card statements and loan information together so that you can gain quick support from a debt relief professional.
Step 2 for filing bankruptcy: arrange a free consultation with a Licensed Insolvency Trustee
Licensed Insolvency Trustees are the only professionals in Canada legally authorized to file bankruptcy (and consumer proposals). They will help to review your financial circumstances and recommend an appropriate pathway to debt relief. Only Licensed Insolvency Trustees can put a quick stop to creditor action and legal threats. At Spergel, our experienced Licensed Insolvency Trustees have been supporting Canadians on their journeys to debt relief for over thirty years, and we have seen it all. Book your free consultation with a Spergel Licensed Insolvency Trustee today to begin discussing your debt relief options.
My husband and I are grateful for the impeccable service provided to us by Spergel. We can now breathe the air of freedom from the chains of debts, the fear of answering collector calls and receiving letters demanding payments, the overall feeling of anxiety and depression lurking daily at the back of our minds like shadows following us the moment we wake up until we go to sleep. It was not a hard decision to finally do the last resort which is filing for bankruptcy because we firmly believed Spergel wouldhelp us get through it. We thank you for everything.
Date of experience: 30 August 2023. See more client reviews for those we’ve helped file bankruptcy.
Step 3 for filing bankruptcy: submit the paperwork
You might be wondering where to start with paperwork, but this is where your Licensed Insolvency Trustee comes in. At Spergel, we will help you to complete all of the necessary forms to file for bankruptcy. These include documents that list your assets, liabilities, and income, and you may need to share supporting documents that include tax returns, and proof of any assets that you own. Your Licensed Insolvency Trustee will take care of the rest, registering your bankruptcy with the Office of the Superintendent of Bankruptcy to make it official and to begin protection from your creditors.
Step 4 for filing bankruptcy: fulfill your bankruptcy obligations
There are a few simple legal duties you need to fulfill when filing bankruptcy in Canada:
- Attend credit counseling sessions. These are helpful sessions run by your Licensed Insolvency Trustee to help you improve your money management, and to build good financial habits like tracking your day-to-day expenses and budgeting.
- Share monthly reports. These will indicate evidence of your income and expenses.
- Provide tax information. Although your Licensed Insolvency Trustee will file your tax return for your year of bankruptcy, you will still need to provide some information.
- (Possibly) make payments. You might need to pay for equity in any assets or surplus income that you have in some circumstances.
Step 5 for filing bankruptcy: become discharged from bankruptcy
The final step of bankruptcy is becoming discharged, after which you are free to enjoy life after bankruptcy. Once you have completed your bankruptcy duties, you will be eligible for discharge. This typically takes place in 9-12 months after first filing for most first-time bankruptcies. At this point, you are free from the debts you filed.
Step 6 for filing bankruptcy: enjoy life after bankruptcy
Now that you are free from the shackles of unmanageable debt, you can begin to enjoy life after bankruptcy. At Spergel, we can assist you with matters like rebuilding your credit score and securing a credit card after bankruptcy. You will learn how to tackle many of these concerns during the credit counseling sessions with your Licensed Insolvency Trustee.
Book a free consultation
Book a free consultation with one of the experienced Licensed Insolvency Trustees at Spergel to learn more about the process of filing bankruptcy and to discuss your most suitable debt relief options.