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Bankruptcy, Sponsorship and Citizenship in Canada

Bankruptcy, Sponsorship and Citizenship in Canada

Can I Sponsor Someone While Bankrupt?

As a licensed bankruptcy trustee in Canada and someone who has gone through the immigration and Citizenship process I realized that sometimes the paths of bankruptcy law and immigration law cross.

The biggest effect that a current or past debt problem will have on immigration is that you cannot sponsor someone to immigrate to Canada while you are an undischarged bankrupt. The good news is that once you receive your discharge you are eligible to make a sponsorship application.

If you are in debt and looking to sponsor a family member discuss this openly with your bankruptcy trustee. They can still present you with several options that can allow you to clear up your debts.

You can clear your debts up quickly then proceed with your sponsorship application. This means filing bankruptcy first and then submitting your sponsorship application after your receive your bankruptcy discharge.  In Canada, a first time bankrupt could be eligible to receive a discharge from personal bankruptcy in just 9 months. Your bankruptcy can be extended however to 21 months if you have to pay what is called ‘surplus income’. It is important to discuss the likelihood that your bankruptcy will be extended with your trustee before signing any documents.

You can file a consumer proposal which does not have any impact on a sponsorship applicationA consumer proposal legally protects you from your creditors the same way a bankruptcy does and helps you to make a negotiated settlement on your debts.  There is however one significant difference between a consumer proposal and bankruptcy when it comes to immigration law. A consumer proposal means you avoid having to declare bankruptcy. Since you are NOT bankrupt, you are still free to submit your sponsorship application right away. Talk to your trustee about whether or not you can afford a consumer proposal and if this is a good option for you.

You may also choose to sponsor your loved one now and then file the bankruptcy when your sponsorship application is complete.  Given that sponsorship applications could take many months or years to complete, this would be a long time to have to try and hold off your creditors however.

If you have filed bankruptcy already you can talk to your trustee about the possibility of filing a Consumer Proposal even while bankrupt. A successfully accepted consumer proposal will annul your bankruptcy filing freeing you up to be able to submit your sponsorship application. Be aware that you will have to be able to financially support a consumer proposal for this option to work.

Bankruptcy and Citizenship Applications

Unlike with immigration applications, bankruptcy does not affect your efforts to become a Canadian citizen.  You can still apply for Canadian Citizenship regardless of whether you have filed a personal bankruptcy before, are still currently bankrupt or are considering bankruptcy.

A bankruptcy, debt settlement or consumer proposal will not affect a citizenship application.

Filing a bankruptcy does not necessarily restrict your ability to travel either, but you must keep your trustee informed of where you are and how to contact you.

Always check with Citizenship & Immigration Canada for the latest updates to rules and discuss your debt options carefully with a trustee before making your decisions.

Any of our Ontario bankruptcy trustees would be happy to help you review all of these options and provide you with debt advice on how these laws will apply in your particular situation. Don’t think you have to struggle with debts to avoid jeopardizing your citizenship or sponsorship opportunities.

Similar Posts:

  1. When To File Bankruptcy in Canada – Timing Matters
  2. Bankruptcy Options in Canada
  3. Can I Travel While Bankrupt? When Do I Need To Be in Canada?
  4. Should I File a Second Bankruptcy or a Consumer Proposal?
  5. Do I have to go to court if I file for bankruptcy?

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14 comments on “Bankruptcy, Sponsorship and Citizenship in Canada

  1. Carolyn on

    If you have already gone through the application for sponsorship, and you have gone through the screening. Will it make a difference if i claim bankruptcy in securing sponsorship

    • J. Douglas Hoyes, CA, Trustee on

      Hi Carolyn. The short answer is that until the person you are sponsoring is permanently in Canada, it’s impossible to say that you will have no issues if you declare bankruptcy prior to that point. In simple terms, “it’s not done until it’s done”. I would suggest that you discuss your specific situation with one of our professionals to assess your options.

  2. jay on

    I just wanted to ask if I am living on workpermit in canada and go bankrupt and get married in Australia will it affect my immigration?

  3. iliriana s on

    I would like to know; I just sent in my application for sponsoring my spouse in Canada. He received his 2 year work visa and we are both here in Canada. While the application is in process would I be able to apply for bankruptcy since he is living here with me? Would that bankruptcy affect the determination of eligibility of sponsorship? They say it can take up to 24 months till we receive a response and I know bankruptcy discharge may take up to 9 months which would be blended in the 24 months till I hear back from CIC? I would really appreciate a response. thank you.

  4. Howard Hayes, Trustee on

    Hi Iliriana

    You should double check with Citizenship & Immigration Canada for confirmation, however my understanding is that you cannot sponsor someone to come to Canada whilst you are an undischarged bankrupt.

    Therefore you either need to complete the sponsorship process and then file the bankruptcy or, complete your bankruptcy before you sponsor. Alternatively, you could look for a different way of dealing with your debts such as through a consumer proposal.

  5. Howard Hayes, Trustee on

    Hi Jay. We can only comment on the bankruptcy impact. How your marriage will impact your situation is not something we can comment on. I recommend you contact Citizenship & Immigration Canada directly for advice about your situation.

  6. ali on

    I sponsor my wife in 2014 and application in process and now if i deculared bankruptcy or bank proposal its effect on my spouse case or waiting till my spouse case compeleted and then declared bankruptcy or bank proposal

    • J. Douglas Hoyes, CA, Trustee on

      This is a question you should access an immigration lawyer. If you are bankrupt while attempting to sponsor someone it can be a problem, so ideally you would want to wait until your spouse’s case is completed before declaring bankruptcy or filing a consumer proposal.

  7. drew on


    My common law partner has been here since 2008 and now barely has any income and we have a four month old child. Now, she still has an open work permit, so if she claimed bankruptcy or did a proposal, would that or could that affect her status to become permanent?

    I am worried that she will be denied and then we are both screwed.

    • J. Douglas Hoyes, CA, Trustee on

      Hi Drew. In general, a bankruptcy or a consumer proposal is a problem for the person sponsoring the immigrant, because the government is worried that you won’t have the financial resources to support them. It is less of an issue for the immigrant, since in most cases the new Canadian does not yet have sufficient Canadian debt to be an issue.

      Also, if your partner has minimal income, bankruptcy may not be a good option, since they have minimal wages to garnishee. I would suggest you (or her) give our office a call and we can look at her particular situation and help you and her work out a plan to deal with the debts.

  8. Keith on

    Hi, I’m in the process of sponsoring my wife, but I have credit card debt that has gone to collections. I’m ready to begin to pay it now but would it be advisable to wait until I pay it to apply as a sponsor? Or does it not matter since I’m not actually bankrupt? Thanks!

    • J. Douglas Hoyes, CA, LIT on

      Hi Keith. It is actually being bankrupt that will generally disqualify you as a sponsor during the bankruptcy period. Simply owing money on a credit card would not disqualify you as a sponsor. Significant debt may be an issue, so it would be wise to consider your repayment options in conjunction with the sponsorship process. Obviously you want to be in good financial shape once the sponsorship process is complete.

  9. BY on

    I declared bankruptcy and not Discharged yet because I Moved to oversea and got married. Since I am at overseas I could not attend the sessions to get the Discharge. Its been More than 5 years that I declared bankruptcy but could not get discharge. I want to sponsor my wife while we both live outside of Canada and move to CANADA after the sponsorship is finalized. Whats your suggestion ? Thank you so much

    • J. Douglas Hoyes, CA, LIT on

      You should contact your trustee, or a bankruptcy lawyer, and ask them what is necessary to get your discharge. I court hearing will be required, since if you don’t complete your duties on time and get your discharge only the court can now grant your discharge.

Comments are closed.