How to File for Bankruptcy in Ontario
What the process looks like, and what you can expect from start to finish.
We can help you file bankruptcy in Ontario
If you are thinking about filing for bankruptcy in Ontario, you are likely feeling overwhelmed, stressed, or unsure where to begin. Bankruptcy is a legal process designed to help people eliminate unmanageable debt and get a fresh financial start, but understanding how it works is an important first step.
With compassion and patience, we’ll guide you through each step and set you on the path to a brighter financial future.
What Bankruptcy Means in Ontario
Personal bankruptcy is a legal process governed by the Bankruptcy and Insolvency Act. It is meant to help individuals who can no longer keep up with their debts by eliminating most unsecured obligations such as credit cards, personal loans, payday loans, and lines of credit.
When you file for bankruptcy in Ontario, you receive immediate legal protection from creditors. This protection stops collection calls, wage garnishments, lawsuits, and interest charges.
Bankruptcy is not something you file on your own. It must be filed through a Licensed Insolvency Trustee.
How We Help You File Bankruptcy in Ontario
At David Sklar & Associates, we don’t just help you get out of debt, we help you stay out of debt for good. While we specialize in consumer proposals, bankruptcy, and debt consolidation in Ontario, we go beyond debt relief by providing financial counseling, budgeting strategies, and long-term money management tips.
We are here for you when you’re ready to live your best life debt free!
The 7-Step Bankruptcy Filing Process
If you’re browsing through this page, you’re likely interested in learning more about how bankruptcy works. Below is an overview of what you can expect, from when you meet your trustee to when you receive your discharge and officially become debt-free.
1. Book a free consultation with one of our Licensed Insolvency Trustees
In Ontario (and everywhere else in Canada), you can only file for bankruptcy through a Licensed Insolvency Trustee (LIT). An LIT is the only professional with the qualifications and authority to administer a bankruptcy on your behalf. They’re experts bound by a strict code of ethics and regulated by the federal government through the Office of the Superintendent of Bankruptcy.
At David Sklar & Associates, we know bankruptcies inside out, having assisted thousands of Ontarians in eliminating their debts since 1998. If you’re looking for a way to ease your debt burden, don’t hesitate to contact us today for a free, confidential consultation.
2. Meet with your trustee to review your debts, budget, and assets
Before filing, we’ll review your financial situation in-depth to determine the best strategy for tackling your debts. We’ll review what you owe, the interest you pay, who your creditors are, how much you pay monthly, etc.
We’ll also examine your monthly income and expenses and assess the value of your assets to gain a holistic picture of where you stand financially. In doing so, we’ll be able to provide you with helpful details about how filing for bankruptcy will impact you and your household’s budget. We can also let you know which assets you can keep and which you may need to sell.
3. Consider bankruptcy costs and review your options
Though it’s a government-sponsored debt relief program, claiming bankruptcy In Ontario isn’t free. There are costs associated with discharging your unsecured debts, which vary for each individual based on income, expenses, and assets.
A consumer proposal may be a better solution depending on the size of your debt obligations, the amount of income you earn, and the value of your assets.
During this stage, we’ll provide you with all the information and advice you need to determine which debt relief option is right for you. We’ll always recommend the one we believe best aligns with your goals and needs. But rest assured, the power is in your hands to move forward with the plan you’re most comfortable with and know will help you attain the financial freedom you deserve.
4. Fill out the required documents
Suppose you and your trustee agree that bankruptcy is the best way for you to eliminate your debts. In that case, the next step is to fill out the necessary documents to get the process underway. If paperwork causes you anxiety, don’t worry – we’ll walk you through the steps in filling out and signing the necessary forms to get your bankruptcy started!
You’ll need to complete several forms to file for bankruptcy in Ontario, including the following:
Assessment certificate – this document confirms that you’ve with an LIT to discuss your debt relief options and that you received sound advice to make an informed decision about declaring bankruptcy.
Assignment – in this form, you declare that your trustee will assume control of your assets for the benefit of your creditors, who can then file a claim on them.
Monthly Income and Expenses Statement – this form provides details on your monthly budget for your household.
Statement of Affairs – this form lists your assets and liabilities.
You’ll need to provide relevant supporting documents, such as pay stubs, bank statements, tax returns, and ownership titles for your assets to serve as proof.
If you have any questions or concerns about what information you need to provide, we’ll be by your side to address them.
5. File the bankruptcy documents and notify your creditors
6. Complete your bankruptcy duties
Declaring bankruptcy requires a few personal commitments on your part. In addition to surrendering any non-exempt assets and credit cards to your trustee, your duties include the following:
Making bankruptcy payments. This monthly payment covers the administrative costs of implementing bankruptcy. Depending on your earnings, you may also need to pay surplus income.
Monthly reporting. You’ll need to supply your trustee with details of your monthly budget so they can determine whether you must contribute surplus income payments.
Attending two credit counseling sessions. The purpose of these sessions is to help you acquire money management skills to rebuild your credit and avoid future debt problems.
7. Receive a discharge from bankruptcy
Once you’ve met all your obligations, you’ll receive a bankruptcy discharge, which means you’re released from your legal obligations. If this is your first filing for bankruptcy in Ontario, you may obtain a discharge in as little as nine months.
Congratulations – you’re now officially debt free! You can begin rebuilding your credit and taking the first steps to get your finances in order. You’ll finally have the opportunity to chase after your goals and dreams without crippling debt payments holding you back. And we’ll be more than happy to help you get there!
Documents You'll Need to File
To file for bankruptcy, your trustee may ask for:
- Recent pay stubs or proof of income
- Tax returns and notices of assessment
- Bank statements
- A list of debts and creditors
- Information about assets and monthly expenses
Your trustee will clearly explain what is required and help you gather everything.
What Bankruptcy Eliminates (and Doesn't)
Bankruptcy can eliminate most unsecured debts, including:
- Credit cards
- Personal loans
- Payday loans
- Lines of credit
Some debts are not eliminated, such as:
- Most student loans less than seven years old
- Child and spousal support
- Court fines and penalties
Your trustee will clearly explain what is required and help you gather everything.
Is Bankruptcy Right for You?
Filing for bankruptcy is an effective way to deal with severe debt problems straining your budget and causing tremendous stress. But it’s a solution you should only choose as a last resort – and after careful consideration.
Bankruptcy is not the only option. A Licensed Insolvency Trustee will help you compare bankruptcy with alternatives like a consumer proposal so you can make the best decision.
Frequently Asked Questions About
How to File for Bankruptcy
How do I file for personal bankruptcy in Ontario?
To file for bankruptcy in Ontario, contact a Licensed Insolvency Trustee for a free consultation. They will review your finances, file the required documents with the Office of the Superintendent of Bankruptcy, notify your creditors, and guide you through duties until discharge.
How long does it take to file for bankruptcy in Ontario?
Initial paperwork can be completed in a single meeting (1-2 hours). Once your bankruptcy is filed, the discharge process takes 9 months for first-time filers without surplus income, up to 21 months with surplus income, or up to 36 months for second-time filers.
What documents do I need to file bankruptcy?
You will need recent pay stubs or proof of income, tax returns and notices of assessment, bank statements, a list of all debts and creditors, and information about assets and monthly expenses. Your trustee will guide you through gathering everything.
Can I file for bankruptcy without a lawyer?
In Canada, you cannot file for bankruptcy through a lawyer — only a Licensed Insolvency Trustee (LIT) is federally authorized to administer bankruptcy. LITs are regulated by the Office of the Superintendent of Bankruptcy.
What happens immediately after filing bankruptcy in Ontario?
The court grants a stay of proceedings, which immediately stops creditor collection calls, lawsuits, and wage garnishments. Your trustee notifies all creditors within five days. You then begin fulfilling your bankruptcy duties including monthly reporting and credit counselling.
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