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Bankruptcy Frequently Asked Questions

1. What is Bankruptcy in Canada?
   Bankruptcy is a legal process that declares a person or business insolvent and discharges most of their debts. When individuals are in bankruptcy, creditors cannot initiate collection actions against them. Bankruptcy is one choice for a debtor who cannot meet their debt obligations... +more
    
2. Will bankruptcy wipe out all my debts?
   No. Bankruptcy will eliminate many debts, but there are some exemptions... +more
    
3. Will bankruptcy stop my creditors harassing me?
   Yes. Once you have signed your bankruptcy or consumer proposal papers, your trustee will notify all creditors of these proceedings... +more
    
4. What is the difference between a consumer proposal and bankruptcy?
   In bankruptcy, all non-exempt, unsecured assets are discharged at the end of the process. A consumer proposal has a maximum dollar value allowed, up to $75,000 for an individual... +more
    
5. What is the difference between a consumer proposal and a consolidation loan?
   A consolidation loan is organized through your lending institution. A consumer proposal is a legal arrangement organized through a bankruptcy trustee... +more
    
6. What is a bankruptcy trustee?
   Trustees are licensed by the Superintendent of Bankruptcy, which is a government agency overseen by Industry Canada. Trustees are professional debt consultants with extensive knowledge of money management and the resources available to debtors in financial trouble... +more
    
7. Are my tax debts forgiven in bankruptcy?
   Many people are relieved to discover that during bankruptcy the taxes you owe to the Canada Revenue Agency can be discharged... +more
    
8. Will I still owe my student loan after bankruptcy?
   If the primary debt forcing you to consider bankruptcy is your student loan, you should be aware that it is treated differently than loans from other creditors. The main thing to be aware of is that student loans are not eligible to be discharged through bankruptcy UNLESS you have been out of school (either full time or part time) for at least seven years... +more