Who Will Know I Filed Bankruptcy?

It is understandable that when you are thinking bout bankruptcy you don’t want that information broadcast to your friends, family and co-workers. Let’s walk through who is actually notified when you file for bankruptcy in Canada, what’s public record, and how likely it is that someone will find out.

Is Bankruptcy Private in Canada?

Your initial debt consultation with a trustee in bankruptcy is between you and your Licensed Insolvency Trustee (LIT). This confidential, one-on-one, meeting is designed to review your debt relief options.

If you decide to file, both a consumer proposal and bankruptcy are a legal process, and like most legal proceedings, they become part of the public record.

While bankruptcies are part of the public record in Canada, that doesn’t mean your filing is broadcast online or published in the newspaper. In reality, only the people who need to know are notified. For everyone else, finding out takes time, effort, and usually a fee.

Who Is Legally Notified When You File for Bankruptcy?

From a practical point of view, only those who need to know will be informed that you filed insolvency:

• your bankruptcy or proposal documents are electronically filed with the federal government through the Office of the Superintendent of Bankruptcy. This is the official start of the process.
• creditors will be notified so they can file a claim in your bankruptcy or vote in your proposal;
• if your dealing with collections, a notice will also be sent to the collection agency. This is for your benefit as it will also stop further collection calls.
• The Canada Revenue Agency is notified as there are tax returns to be filed as part of the process;
• the government sends a notice that you filed insolvency to the credit bureaus;
• the only time your employer will be notified is if you ask to have a wage garnishment stopped as part of the bankruptcy process.

Does Bankruptcy Show Up On Your Credit Report?

Once you file a bankruptcy or proposal, the OSB updates a federal database and sends information to the two major credit bureaus in Canada: Equifax and TransUnion.

The information includes:

• Whether you filed a bankruptcy or consumer proposal
• The filing date and the Licensed Insolvency Trustee handling your file
• The date of your discharge (for bankruptcy) or completion (for a proposal), once finalized

This information creates a record on your credit report that affects your credit score. However, it does not include specific details like how much debt you had, or a list of creditors – that’s information that is already present on your credit report as reported by your creditors.

How long does this notice stay on your credit report?

• Bankruptcy remains for 6 years after discharge for a first bankruptcy, and 14 years for any subsequent bankruptcies.
• A consumer proposal stays on your report for 3 years after completion or 6 years from the filing date, whichever comes first.

Keep in mind: only those with a legitimate reason, like lenders or landlords you’ve given permission to, can access your credit report.

Will My Employer Be Notified?

In most cases, your employer will not be notified that you filed for bankruptcy.

The only exception is if you have a wage garnishment that you want stopped.  In this case, your LIT will contact your employer’s payroll department to stop the deductions. Otherwise, there’s no reason your employer would know.

Will My Family or Friends Know?

Not unless you tell them.

Contrary to a popular bankruptcy myth, in personal insolvency cases, a notice does not appear in the newspaper signifying that you filed insolvency. This can be the case for business bankruptcies or if the value of your assets (excluding secured assets) will exceed $15,000, but this does not happen in most individual bankruptcies. A consumer proposal is never reported in the newspaper.

Unless someone is specifically looking for this information, they’re very unlikely to find out.

Can Someone Search for My Bankruptcy Records?

Technically yes, but practically, unlikely.

If someone wants to see if you filed insolvency, they must do a bankruptcy search through the Bankruptcy and Insolvency Records. 

They would have to:

1. Create an account with the Office of the Superintendent of Bankruptcy,
2. Pay a fee (currently $8 per search), and
3. Know your full name and likely your birthdate or city of residence.

Even then, the information they receive from the insolvency records is limited to basic details like total debt, total assets, and filing date.

Take the First Step—Privately and Confidently

If you are considering bankruptcy, you should consider both the pro and cons of bankruptcy. Bankruptcy offers:

• The elimination of most unsecured debts
• Protection from creditors
• A clear path to rebuilding your credit

Bankruptcy was designed to be a fresh start. Over 100,000 Canadians file for insolvency every year. You are not alone, and there is absolutely no shame in getting help.

At Hoyes Michalos, we understand how stressful financial problems can be. That’s why we offer free, no-obligation consultations with a Licensed Insolvency Trustee with no pressure and no judgment.

If you’re worried about who will know, we can explain exactly what to expect and help you make an informed decision that fits your situation.

Book your free , confidential consultation today and start your path to becoming debt free.

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1. How Long Does a Bankruptcy Stay on my Credit Report?
2. I’ve Filed Bankruptcy & Collection Agents Are Still Calling
3. Can You File A Consumer Proposal Twice?
4. Will Bankruptcy Take My Tax Refund?
5. Will I Lose My Real Estate License if I File a Bankruptcy or Consumer Proposal in Ontario?