Bankruptcy Canada – 7 Steps to Declaring Personal Bankruptcy

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Filing for BankruptcyWhat is needed for declaring personal bankruptcy and getting the legal protection you need from your creditors?  Here are the 7 steps you’ll need to take:

1.  Select a Trustee
2.  Arrange a Meeting
3.  Complete a Financial Information Application Form
4.  Meet with the Trustee to Review Your Information
5.  Trustee Completes Necessary Paperwork
6.  Meet with Trustee to Sign Paperwork
7.  Trustee Files Paperwork and a Stay of Proceedings is Issued.

Select a Trustee

Bankruptcy Laws in Canada laws require that the bankruptcy process be handled by a licensed bankruptcy trustee, so your first step will be to find one.   Laws vary from area to area so it is important to find a trustee that is licensed in your Province.

The Officer of the Superintendent of Bankruptcy is a good place to start.  They have lists of trustees that are available in each of the provinces.  Speak with a few - who you select is an important decision as you will be spending a good deal of time with your trustee over the course of your bankruptcy.

The Initial Meeting

Initial consultations are free so there is no reason you can’t meet with more than one trustee before you decide.  These meetings allow the trustee to begin reviewing your financial situation to make sure that personal bankruptcy is your best solution.  There are alternatives to bankruptcy that some Canadians are not familiar with, and if the solution fits your situation, the trustee might recommend one of these alternatives.  If you are leaning toward bankruptcy, the trustee will provide you with an application form, where you will record details of your current finances.

Completing the Application Form

Completing the application involves spelling out all your debts as well as the monthly payments on those debts; your living expenses; all sources of current and expected income; and all that you own – your home, your cars, your personal possessions, and any investment or retirement accounts you have.

Reviewing the Form

The next step is to meet again with the trustee to ensure the form is completed properly and all the information is correct.  Assuming you have had a day or two to think about what you are doing and are ready to proceed, you will ask the trustee to begin preparing the paperwork needed to file.  If you’re not ready, you can ask for a few days to think before coming to your final decision.

Completing and Signing the Paperwork

Once you have informed the trustee of your decision he or she will complete the legal paperwork which you will sign.

Filing the Paperwork/Getting a Stay of Proceedings

The trustee will file the paperwork with the Office of the Superintendent of Bankruptcy and you are officially declared bankrupt at the time of the filing.

Canada bankruptcy law provides for an immediate issuing of a “stay of proceedings” which will force your creditors to cease all collection activities against you, including wage garnishments, bank account attachments, repossession activity, and phone calls and other forms of debt collection communication.

A trustee is the best source of help that you can get.  Make a list of all of your questions and bring it to your consultation.  The more prepared you are, the smoother the process will go.



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