Should I File For Bankruptcy?

“Bankruptcy is a terrifying proposition. It is not for everyone but there are circumstances where declaring bankruptcy makes sense.”


The best start is to talk to your Local Bankruptcy Trustee about your personal situation so that they can help you decide if you should file for bankruptcy. You can start by asking your trustee these questions.

Will all my debts be cancelled in bankruptcy?

Bankruptcy will eliminate most, if not all, of your unsecured debts. It works well if you are behind on credit card debt, lines of credit, pay day loans and other similar types of debt.

Under the Bankruptcy and Insolvency Act some debts are not discharged in a bankruptcy:

  • alimony payments and child support;
  • student loans if you have been a student during the past seven years;
  • fines or penalties imposed by the Court; and
  • debts arising from fraud.

Bankruptcy also does not apply to your secured debt like your mortgage or secured car loan. If you can afford the payments on these loans you can usually negotiate to keep these assets and continue to pay off your secured debt even if you file for bankruptcy.

Can I keep my property if I file for bankruptcy?

You do not need to be concerned that you will lose everything if you declare bankruptcy. Federal and provincial laws protect certain assets and make them exempt from seizure by your trustee.

Some assets that you can keep:

  • RRSPs except for contributions made in the past 12 months
  • your car if it is valued at below a threshold amount
  • reasonable personal belongings and household furniture
  • tools you need for your work.

If you own a home with a mortgage or have a car with a secured car loan it may also be possible to keep both of these assets if you can continue to make your mortgage and car loan payments.

Is bankruptcy my best option?

The truth is bankruptcy is only one option when you are dealing with too much debt. You should consider bankruptcy only after you have considered every debt management option including a consumer proposal.

You should contact a Local Bankruptcy Trustee who can advise you about the potential affects of filing bankruptcy as well as explain all of your debt relief options. Only then can you decide if you should file for bankruptcy.

Let Us Help

If you are considering filing for bankruptcy our trustees can answer any of your questions about filing bankruptcy and can help you get on the road to financial recovery.

Contact a bankruptcy trustee near you.