If you are an insolvent lawyer in Ontario, the Law Society of Upper Canada (LSUC) will place restrictions on your ability to practice law if you are filing for personal bankruptcy. Per By-Law 8, Part 1, section 1, as a licensee, you are required to immediately notify the LSUC upon making an assignment in bankruptcy.
While you are a bankrupt, you may not receive or hold money in trust; have signing authority or co-signing authority on any trust account; or practice real estate law.
Moreover, while bankrupt, your status will be listed as “practice restricted” on the LSUC’s online directory. You will also be required to report information regarding your financial affairs to LSUC, including:
- A signed copy of your Statement of Affairs;
- Questionnaire of the Official Receiver, if any;
- Written confirmation from your bank that your trust account(s) has been closed
- Advise whether claims provable in bankruptcy, including any debts listed in your Statement of Affairs, represent debts which arose from a current or prior solicitor/client relationship. If so, you’ll need to provide full details.
- A copy of your Certificate of Discharge when it becomes available
Filing a Consumer Proposal to Deal with Debt as a Lawyer
While making an assignment in bankruptcy will result in restrictions, filing a consumer proposal to deal with your unsecured debts has less impact on your ability to practice law.
As well, LSUC encourages lawyers to report their consumer proposal filing to them. A consumer proposal is the ideal debt repayment plan for individuals who are able to repay a portion of their debts, but not the full amount. A proposal also allows you to avoid bankruptcy, while receiving all the same protections from creditor actions.
For more information regarding your situation and potential impact on your professional designation, we would recommend contacting LSUC directly.
If you’re a lawyer in Ontario carrying high unsecured debt, contact a Hoyes Michalos Licensed Insolvency Trustee for a free consultation to review all your debt relief options.
- Do I Need to Include All my Creditors and Debts in A Bankruptcy?
- Will I Lose My Real Estate License if I File a Bankruptcy or Consumer Proposal in Ontario?
- Effects of Filing Bankruptcy or Consumer Proposal as an Accountant in Canada
- Can I Get OSAP While in Bankruptcy or Consumer Proposal?
- Effects of Filing Bankruptcy or Consumer Proposal as a Certified Financial Planner in Canada