Declaring Personal Bankruptcy in Ontario

No-one wants to go bankrupt, but sometimes declaring bankruptcy is the best way to deal with debt and get a new start.

Advantages:

Personal bankruptcy is a legal process in Canada legislated under the Bankruptcy and Insolvency Act. Declaring bankruptcy means:

  • eliminating your unsecured debts
  • collection agencies and creditors stop calling
  • wage garnishments stop
  • you get a fresh financial start

You Do Not Lose Everything

When declaring bankruptcy in Ontario, most personal belongings are exempt from seizure by law.

You keep:

  • unlimited clothing
  • $7,117 for a motor vehicle (car, truck, etc.);
  • $14,180 worth of furnishings and appliances;
  • $14,405 worth of tools of the trade (equipment that you use to earn a living);
  • Most pension plans, certain types of life insurance policies, and RRSPs (excluding recent contributions).

Will the bankruptcy trustee take my home or car?

In most cases, no bankruptcy does not necessarily mean you lose your home or car. Most owned vehicles are worth less than the allowable limit and so it is rare for the trustee to seize an owned car or truck. If you don’t have significant equity in your home, then claiming bankruptcy should not affect your house.

If you do have assets that you need to protect, talk to us about a consumer proposal.

What does it cost to go bankrupt?

The cost of bankruptcy is based on monthly income, expenses, family size, and assets. If you have no income and little non-exempt assets, the typical cost is approximately $200 per month. If you earn a higher income, the government requires you to pay something called Surplus Income into your bankruptcy. 

If those payments might be high, you have options like a consumer proposal to lower your monthly cost.

How long will bankruptcy last?

If you are a first-time bankrupt with no surplus income, have completed all of your duties and if no creditors object, you could begin your life debt free in just 9 months. If you have surplus income, your bankruptcy will be extended to 21 months.

How will bankruptcy appear on my credit report?

The fact that you filed bankruptcy will impact your credit report for 6 years after discharge if this is your first bankruptcy. However because you eliminate your debt, you can start the process of rebuilding a new and better credit history.

Will bankruptcy affect my spouse?

Some people worry about the effect of bankruptcy on their spouse. As long as your debts are solely yours, then claiming bankruptcy should have no effect on your spouse or their credit rating. If you have joint debts, both you and your spouse may want to talk to us about dealing with those combined debts.

How To Declare Bankruptcy in Ontario

Bankruptcy in Ontario can only be filed through a Licensed Insolvency Trustee. The process is not difficult:

  1. Book a consultation with a trustee.
  2. Meet with the trustee to review your debts, assets and budget.
  3. Review the costs of claiming bankruptcy.
  4. Compare bankruptcy with your other options.
  5. Complete all necessary forms.
  6. The trustee will file these with the government.
  7. Your creditor protection begins.

Get a Personalized DEBT FREE PLAN

At Hoyes, Michalos we offer everyone a FREE, no-obligation, professional consultation in all our Ontario locations.

Our licensed experts will review the details of your individual situation and help you decide if claiming bankruptcy is indeed the correct debt relief option for you.

Simply use the form below to request a debt assessment or call us at 1-866-747-0660.

Find an Office Near You

Offices throughout Toronto and Ontario

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What our clients have to say:

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“I was overwhelmed with credit debt. Being bombarded with constant phone calls, and letters, from debt collectors was very stressful. It seemed like there was no way out. Until I heard about Hoyes, on my local talk radio station. They are friendly, caring, knowledgeable, and professional, with many year's of experience. During my first meeting, they took the time to learn about my debt, and financial situation. Explaining my different options, and helping to come up with a plan that would work best for me. They helped me avoid filing for bankruptcy, by putting forward a consumer proposal to my creditors. My proposal was accepted, and I am happy to finally be debt free, thanks to Hoyes. It feels like a huge weight has been lifted off of my shoulders. Hoyes are the best debt relief specialists.”