Bankruptcy in Ontario

Everything you need to know about declaring bankruptcy in Ontario, Canada.
Let us help you wipe out your debt and give you a fresh start!

Bankruptcy in Ontario

Personal Bankruptcy is only one option for you.

Most people who come to us do not want to declare bankruptcy in Ontario and are relieved to learn that it’s not the only option.  For most people, filing a Consumer Proposal is the #1 alternative to personal bankruptcy.

One of our Licensed Insolvency Trustees (LITs) can help you understand all of the debt-relief options available to you. After you speak to a LIT, If you decide that filing for bankruptcy is the best decision for your situation, it’s not the end of the world!

We will guide and support you every step of the way, from the initial consultation through the completion of the process, and into your financial recovery.

What is bankruptcy?

In Canada, bankruptcy is a legal proceeding that allows you to eliminate unsecured debts that you cannot afford to repay. It’s one of two federal debt relief programs available in the country, the other being a consumer proposal. The Bankruptcy and Insolvency Act (BIA) governs how a bankruptcy takes place, outlining rules and requirements for all parties involved.

Why would someone need to file for bankruptcy?

There could be numerous reasons, but they all stem from an inability to meet debt payment obligations. Individuals typically file bankruptcy as a last resort after trying everything possible to resolve their debt problems.

It doesn’t take much for the average person to find themselves drowning in debt, especially if they’ve taken on many high-interest loans. And in many cases, it’s not merely the result of careless spending. 

An adverse life event, such as a major illness, divorce, or job loss, can wreak havoc on a person’s finances, causing them to fall behind on bills quickly. As a result, they have no choice but to rely on debt to pay their living expenses. These tragic circumstances can happen to anyone through no fault of their own. 

Perhaps you’ve found yourself in such a situation, overwhelmed by mounting debt straining your budget and which you struggle to repay. In that case, declaring bankruptcy can help you get the fresh start you deserve to build toward a more promising future for you and your family.

Filing for bankruptcy in Ontario

However, filing for bankruptcy in Ontario (or anywhere in Canada) should not be taken lightly! While it can help immensely in resolving your debts, you need to consider both the pros and cons before getting started. Depending on your circumstances, you can avoid bankruptcy and find the debt relief you need through an alternative solution.

In Canada, only a Licensed Insolvency Trustee (LIT) has the expertise and authority to administer bankruptcy on your behalf. At David Sklar and Associates, our team of passionate and knowledgeable LITs can review your situation and assess if bankruptcy is the best option for you.

If you’re ready to learn about your options, contact us today to set up a free, no-obligation consultation. Or keep reading below to learn the ins and outs of bankruptcy works in Ontario. We’re here to do everything we can to help you make an informed decision about tackling your debt!

is not your only
debt relief option!

What to expect if you file for bankruptcy

Suppose you choose personal bankruptcy as your debt relief solution. In that case, we’ll work with you as your trusted guide and advisor every step of the way. One of our LITs will help you complete all the necessary documents with the Office of the Superintendent of Bankruptcy of Canada (OSB) to kickstart the process.

From that point on, we will deal directly with your creditors on your behalf.

Legal Protection from Creditors with Bankruptcy

Once you decide that Bankruptcy is the right option, your license insolvency trustee will grant you a stay of proceedings, this means that your creditors must cease all efforts to collect on the debts you owe. They cannot initiate or continue lawsuits against you, including wage garnishments and all collections calls will stop.

It’s impossible to obtain this type of protection from creditors through other forms of credit counselling or debt management plans. Only bankruptcy (or a consumer proposal) can provide you with legal protection from creditors, collection actions and lawsuits, immediately reliving your financial stress.

Beyond the immediate relief from lawsuits and harassing phone calls, completing bankruptcy from start to finish will legally absolve you from your unsecured debt obligations. Depending on your circumstances eliminating your debts can significantly improve your financial standing. You’ll have more funds to pay your mortgage, rent, and other critical household expenses.

You can now focus on saving money for retirement, establishing an emergency fund, and even planning that much-needed vacation you’ve been postponing. Once you free yourself from unmanageable debts, your wallet becomes much lighter. And a whole world of opportunity opens for you.

What debts can you eliminate by declaring bankruptcy?

As mentioned above, bankruptcy deals exclusively with unsecured debts. These are loans where you’ve not pledged any asset as collateral, meaning your creditors have nothing to seize should you default on your payments. 

Here are some examples of debts you can include in a bankruptcy:

Credit cards

david sklar debt relief icon payday loans

Personal loans

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Lines of credit

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Income tax debt

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Student loans

*if it’s been at least seven years since you’ve graduated

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Medical bills

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Bank overdrafts

keep home icon

Unpaid property taxes

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Unpaid utility bills

Bankruptcy will NOT eliminate the following debts:



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Car loan


Child and spousal support payments

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Court fines

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Student loans

*Less than seven years old


Debts resulting from fraud

The steps involved in filing for bankruptcy in Ontario, Canada

Here’s a general outline of the steps involved in filing for bankruptcy in Ontario, Canada. Remember each situation is unique, so it’s crucial to discuss your specific circumstances with a Licensed Insolvency Trustee.

Step 1: Assessment

The first step is completely FREE, you will to meet with our certified Insolvency counsellors to review your financial situation. This includes discussing your debts, assets, income, and expenses. Our our certified Insolvency counsellors will explain all available debt relief options, including the benefits and consequences of each.

Step 2: Understanding Your Options

If bankruptcy is the most suitable option, we will ensure you understand the process and your obligations. 

Step 3: Paperwork

Should you decide to proceed with bankruptcy, the trustee will help you complete the necessary paperwork, including an assessment of your assets, debts, and monthly budget.

Step 4: Duties

During bankruptcy, you have certain obligations to fulfill, such as attending two financial counseling sessions, submitting monthly income statements, and making payments based on your income and family size.

Step 5: Meeting of Creditors (if Necessary)

In some cases, a meeting of creditors will be called, although this is rare in a straightforward personal bankruptcy.

Step 6: Discharge From Bankruptcy

Assuming all duties are completed and there is no opposition from creditors or the trustee, you will be eligible for discharge from bankruptcy after a minimum period depending on your situation. For first-time bankrupts without surplus income, this period is typically nine months.

How long does a bankruptcy in Ontario last?

The length of your bankruptcy depends on whether you’ve declared bankruptcy before and the amount of income you earn.

If this is your first-time declaring bankruptcy, you can complete the entire legal process in as little as nine months. Of course, this hinges on you meeting all your commitments without fail. If you’re required to pay surplus income, your bankruptcy will stretch to 21 months.

Lets’ say you file bankruptcy a second time. In that case, you can expect a 24-month time frame, provided you have no surplus income. If you make extra income payments, it’ll be 36 months before you receive an automatic discharge.

What are your responsibilities in bankruptcy?

Section 158 of the BIA outlines the following duties you must carry out in bankruptcy:

  • Surrender non-exempt assets to your trustee
  • Cancel all your credit cards
  • Provide all requested financial documents to your trustee to administer your bankruptcy 
  • Report a detailed budget (income and expenses) monthly to your trustee
  • Make the required monthly payment (minimum payment will cover administration costs and, if needed, surplus income)
  • Complete two mandatory credit counselling sessions
  • Attend any meetings requested by your creditors of the court

Do you qualify for bankruptcy?

Here are the requirements you need to file for bankruptcy in Ontario:

  • You must be at least 18 years old
  • You must owe at least $1,000
  • You must either be a Canadian resident, do business in Canada, or own property in Canada
  • Your total debts that exceed the sale value of your total assets, OR
  • You must be unable to repay your debts as they come due

Is bankruptcy the right debt relief option for you?

If you’re struggling with unsecured debts, bankruptcy can help you eradicate them for good. However, there are consequences to declaring bankruptcy, so you need to be sure that it’s the most effective and practical way to achieve freedom from debt problems. 

The first step to making that determination is to assess your debt situation honestly and objectively. And that’s where we come in! 

david sklar licensed insolvency trustee

At David Sklar & Associates, we never assume bankruptcy is the only solution for everyone looking to resolve their debts. Most people who come to us do not want to declare bankruptcy and are relieved to learn that it’s not the only option. In fact, most of our clients discover that filing a consumer proposal is a superior alternative to bankruptcy.

One of our Licensed Insolvency Trustees can help you understand all the debt-relief options available. If you decide that filing for bankruptcy is the best solution for your situation, it’s not the end of the world! We will hold your hand before, during, and after you complete the process.

Contact us today to explore your options if you’re feeling lost and frustrated by mounting interest charges and endless collection calls. We’ve helped thousands of people across Ontario find debt relief since 1998 – we can help you too!

Getting into debt is easy. Getting out is a different story.

But it's still possible!

Did you know there is a Canadian debt relief program federally regulated by the Canadian Government, designed to help citizens avoid claiming bankruptcy? This amazing program can only be administered by a Licensed Insolvency Trustee (LIT).

If you’re struggling to make your payments every month and creditors won’t stop calling, we can help.

What our clients are saying.

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Danny Gottshalk
the service was excellent, Grace Cuffaro and Serena Sklar was very helpful and knowledgeable.
Martin Obrien
Trina was Very pleasant and professional to deal with made the process absolutely easy no stress at all explained everything simplified it down so I could understand it would definitely recommend it
Jordan Clarke
This place is great! Grace answered all my questions, very welcoming and I never felt judged! So far everyone I have dealt with was super polite, thorough and treated me with respect! 10/10 recommend!
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They are very accommodating and very respectful. They do very professional and make sure your worries are being addressed. Excellent job Samycha thanks for the help.
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Very helpful with all the inquiries and satisfied with their service!. Great company to work work with.
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Treated very well. They showed me a great deal of respect. Felt a load had been taken off my shoulders. Would highly recommend.
Ken Burgess
Your staff was all very helpful and kind. They did not make you feel like a lesser person. We are so happy we went to see you to get us out of debt.
Lawrence Wolfe
My experience working with Trina and then the rest of the team was great. They listened to all my concerns and addressed them.
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We are David Sklar

Our team of Licensed Insolvency Trustees in Ontario can help you get out of debt and in control of your own financial future. We’ve helped thousands of people and we can help you too. 

We know this is stressful, but you're not alone.

It’s going to be okay.
Book your free consultation today. We’ll do the rest.

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