The Bankruptcy and Insolvency Act (BIA)
The principal legislation governing bankruptcy in Canada was created by the Office of the Superintendent of Bankruptcy and is spelled out in the Bankruptcy and Insolvency Act (BIA) of Canada. The Bankruptcy and Insolvency Act recognizes there are two parties in any bankruptcy filing – the debtor and his or her creditors. Each has rights. The intent of the BIA is to allow honest debtors the opportunity to have most of their existing unsecured debt forgiven in order to get chance to start over financially. However, the Act also acknowledges the rights of creditors to recoup some of what they are due. As such, Canadians with significant income and assets will have to contribute some of what they own and what they make towards creditor repayment should they decide to file for bankruptcy.
Does the BIA tell you how much income and assets you may lose? No, it does not. Think of the BIA as establishing a general framework. For specific information about how bankruptcy will impact you personally you have to look to Provincial laws.
Provincial Bankruptcy Law
In short, the laws you really need to know are those governing the implementation of the federal act in your province. There are significant differences across Provincial legislation and ferreting out all the specifics you need to know is no easy task on the Internet.
If interpreting Provincial legislation sounds complicated to you, you are right. It is. To sort through exactly what a personal bankruptcy declaration will mean for your unique financial situation, there is no substitute for meeting with a licensed bankruptcy trustee in your Province. They don’t charge for an initial consultation so why not spare yourself the agony of wondering what will happen to you if your current financial situation doesn’t improve. They can also help you explore options for staying out of bankruptcy in Canada if that is a better course of action for you.