Many people find themselves drowning in debt but the thought of bankruptcy is so scary to them, they are willing to go further and further into debt. To those people I say, bankruptcy isn’t something to be afraid of. In fact, bankruptcy is often times describe by many bankrupts as a way out, or a relief. Nobody desires to go bankrupt, but if you are drowning in debt, bankruptcy is a way out and it will start you on your way to a life of financial freedom.

So, what is bankruptcy?

Bankruptcy is a formal process legislated under the Bankruptcy and Insolvency Act and is filed by a licensed insolvency trustee. There are definitely some advantages and disadvantages to bankruptcy (unfortunately, many people focus on the disadvantages and forget that bankruptcy can actually be advantageous).


Prevents creditor legal or collection action against you

Allows an honest, but unfortunate debtor, to get a fresh start

Discharges you from most of your debts


Assets may be affected

Payments are variable, based on income

Results in worst credit rating

What is the cost to go bankrupt?

There is no set cost or fee for filing personal bankruptcy, though the typical minimum fee is $1,800 paid in nine monthly installments of $200 each. The maximum amount you pay is based upon your income and ability to pay. The surplus income formula used to calculate these payments is legislated under the Bankruptcy Insolvency Act and therefore the calculated payment amounts will be the same for all trustees. 

How long is the bankruptcy process?

The length of the bankruptcy process is legislated under the Bankruptcy and Insolvency Act, and is determined by two factors:

Have you ever been bankrupt before?

Do you have surplus income?

Based on your answers to these questions the length of your bankruptcy process would be as follows:

First time bankrupt without surplus income 9 months

First time bankrupt with surplus income 21 months

Second time bankrupt without surplus income 24 months

Second time bankrupt with surplus income 36 months

Third time or more bankrupt 36+ months as determined by the court

If you have more questions about bankruptcy, contact our office today for a free, no-obligation consultation. 

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