The best advice we can give is that you should open a new bank account BEFORE filing bankruptcy or a consumer proposal rather than waiting to open an account until after you file. We suggest you do this for your own protection.
Filing bankruptcy in Canada eliminates your unsecured debts, so your creditors are not permitted to continue to take payments from you. However, filing bankruptcy on Monday at 10:00 am does not mean your creditors are aware of your filing at 10:01 am on Monday and therefore immediately stop all collection action.
Your trustee has five days to notify your creditors, so if your bankruptcy documents are mailed on Day #5, and if it takes five more days for the package to be delivered in the mail to your creditors, and if the creditor doesn’t get to the package for a few more days it can easily be two or three weeks before collection calls stop.
If you have automatic payments set up in your bank account (for your credit card, bank loan, or any other debt included in your bankruptcy) it is very possible that those automatic payments will continue for another month or more before they are stopped.
So how can you guarantee that no unauthorized payments are taken from your bank account after you file bankruptcy?
Open a new bank account, at a new bank where you don’t owe any money, BEFORE you file bankruptcy.
Under Canadian law a bank cannot refuse to open a new bank account for you (unless they suspect criminal activity) so you should have no problem opening a new bank account.
Contact the payroll department at your employer and have them switch your paycheque to your new account. If you receive other income from child tax benefits or pensions, notify them of your new account as well. If there are direct payments that you will be continuing to make (such as your hydro bill or car insurance), switch those to your new account too.
By opening a new bank account before filing bankruptcy you can be confident in the knowledge that only payments you have authorized will be taken from your new bank account.