Declaring Bankruptcy in Canada while Living Abroad – The Facts
If you are a Canadian living abroad and looking to file for bankruptcy on your debts owed in Canada, can you file for bankruptcy or a proposal in Canada? The answer is maybe. If you meet ANY of the tests below, you would be eligible.
Do you work or conduct business in Canada?
While you may live abroad, if you currently work in Canada or have a business that operates in Canada, or if you worked or had a business in Canada within the 12 months prior to filing, you would be eligible to file in Canada.
Are you resident in Canada?
You have to currently live in Canada or lived in Canada within the 12 months prior to filing to meet this test. If you have been living abroad for more than 1 year, you would not meet this test. You may need to reestablish your residency in Canada to be eligible to file for bankruptcy or a consumer proposal if you do not meet any of the other tests.
Is the majority of your assets located in Canada?
If you do not meet the two tests above, you may still be eligible to file in Canada if the majority of your assets are located in Canada. Assets that you have in Canada could include land, real estate, bank accounts, and investments, just to name a few.
If you do not meet any of the three tests above, you would not eligible to file for bankruptcy or a proposal in Canada. To assist you in understanding whether or not you meet these tests, please contact our office and we would be happy to assist you.
Declaring Canadian Bankruptcy in a Foreign Country
If you are not eligible to file in Canada, depending on the insolvency laws in the country that you are living in, you may be able to initiate insolvency proceedings that include your debts in Canada. While this option does not remove that debt back in Canada, you are protected from any collection action in the country where you filed the insolvency proceedings. So as long as you do not intend to return to Canada, this would allow you a fresh start free of your debts incurred in Canada as well as your new country. However, if you move back to Canada, you would need to deal with the Canadian debts and could consider insolvency proceedings in Canada at that time.
If you are coping with debt that you are not to pay –call us at 416-498-9200 for your FREE consultation. Our caring professionals will review your finances in detail and go over all your options for getting out of debt and getting on with your life.