Personal Bankruptcy is a legal process administered by a Licensed Insolvency Trustee, which allows you to eliminate your personal unsecured debt. The decision to file for personal bankruptcy needs careful consideration. Contact us today for a FREE confidential assessment.

How Bankruptcy Works in Canada

Bankruptcy is a legal process administered by a Licensed Insolvency Trustee, which allows you to eliminate your personal unsecured debt. If you decide to file for bankruptcy, your insolvency trustee will help you organize your paperwork and then file the documents with the Office of the Superintendent of Bankruptcy. All collections, legal action and wage garnishments will stop. We will guide you through the process of reporting your income, monitoring your payment requirements, dealing with your assets and tax returns, and finally, the discharge process to get you out of bankruptcy.

The decision to file for Personal Bankruptcy needs careful consideration. It is to be discussed only with a Licensed Insolvency Trustee like Vine and Williams Inc. We can provide the information you need to fully understand your choices and their impact on your financial situation. Although you may choose to give up certain assets, you will be able to keep your personal belongings and RRSP’s and, in most cases, your automobile and house. After filing for bankruptcy, you are set up with two credit counselling sessions as part of the process. These sessions are designed to give you the tools to manage your money successfully in future.

Licensed Insolvency Trustees (“LIT’s”) are licensed and supervised by the Office of the Superintendent of Bankruptcy. We are not permitted to charge up-front fees when you are considering bankruptcy or a consumer proposal. If you are asked to pay any upfront amount or any amount outside of the process, you are not dealing directly with a Licensed Insolvency Trustee.  You do not need a debt consultant to represent you in bankruptcy.


When your bankruptcy period is over, you will be discharged. You will no longer have any legal obligation to repay the debts covered under the terms of your bankruptcy. If this is your first bankruptcy, it is possible to be discharged in as little as nine months. Imagine living without the stress of having to juggle minimum monthly payments or nasty collection calls! Of course, this will impact your credit, but your insolvency trustee can help guide you through the process and show you how to minimize the damage and rebuild and repair your credit.

Bankruptcy Options in Ontario

The whole bankruptcy process can be handled remotely by phone, video and email due to the COVID-19 pandemic, safely from the comfort of your own location. Our head office is in Hamilton, Ontario, but we also have office locations from Mississauga to Burlington, and in Niagara in St. Catharines, Welland and Niagara Falls.

Need an Ontario License Insolvency trustee?
Contact us today for a FREE confidential assessment.

Do You Have Bankruptcy Questions?

What debts can I include?

  • Your bankruptcy must include all of your unsecured debts. You can’t pick and choose.
  • Credit cards, lines of credit, loans, overdrafts
  • Government debt, including taxes and overpayments
  • Payday loans and lines of credit
  • Student loans (special rules apply, and you have to be out of school for over seven years for them for automatic discharge)
  • Bank “student loans” are included that are not government guaranteed.
  • Personal loans
  • Unpaid rent, utilities, phone bills
  • Don’t see it listed? Ask us!

Is my tax debt included?

  • YES – all tax debt is included – personal tax, HST, employee deductions
  • AND – any other government debts or overpayments such as EI, Canada Child Benefits, CERB, CRB, CEBA and other Covid related debts

What are debts NOT included?

All creditors are notified, but not all debts are discharged. Some examples of debts that you still have to repay:

  • Child and spousal support
  • Court fines, penalties and restitution orders
  • Debts arising out of fraud
  • Student loans (direct government loans or government-guaranteed) if you have been out of school for less than seven years
  • Mortgages, vehicle loans and other secured loans where you choose to keep your house, car or other asset and continue payments
  • Contracts like cell phones where you decide to continue the service

What assets can I keep?

  • You can keep vehicles, houses and other assets subject to secured loans or mortgages as long as you can make the related payments. If there is equity in the asset, you would have to repurchase the asset from your bankruptcy estate. There are risks to this, and you should seriously consider filing a proposal instead.
  • You can voluntarily surrender assets like cars and houses that you no longer want, and the shortfall on the debt goes into bankruptcy.
  • Personal belongings and household effects are yours to keep up to generous provincial limits.
  • RRSP’s, except contributions in the 12 months before bankruptcy
  • RDSP’s
  • Life insurance contracts if your spouse, child, grandchild or parent is the beneficiary

Note that RESPs are not exempt from seizure and become the bankruptcy estate property unless you repurchase them from the Trustee. Consider a consumer proposal.

How much does a bankruptcy cost?

  • The government does not pay Licensed Insolvency Trustees, so there is a cost to go bankrupt. The monthly payment you will need to make will depend on your income, the size of your family, what assets you own, and whether you have been bankrupt before.
  • A simple first-time bankruptcy where monthly income is below the standard set by the government costs $200 per month for nine months, so $1,800. This payment covers the essential cost of administering a bankruptcy file.
  • A second or subsequent bankruptcy cost is higher because you are in bankruptcy longer, and the Trustee has to monitor your financial situation and administer your file for longer. The price will also be higher if attendance in Bankruptcy Court is required.
  • If you have income over the standard set annually by the Superintendent of Bankruptcy by $200 or more, you have Surplus Income, and your payments are calculated based on your income. You must report your income monthly to the Trustee, and the amount you have to pay goes up or down with your actual income.

What is Surplus Income?

  • Surplus income is not whether you have any money left over at the end of the month.
  • Surplus income is net takehome pay that exceeds the amount set by the Superintendent of Bankruptcy, and it is based on the number of people in your household, including children.
  • If your household income is $200 or more over the standard for the number of people in your home, the home has surplus income. If you aren’t the only one earning income, then not all of the surplus income is yours. If your share of the monthly surplus income is $200 or more, then you must pay 50% of your surplus income into the bankruptcy estate every month for 21 months for a first-time bankruptcy or 36 months for a second or subsequent bankruptcy.
  • If you have joint debt with your spouse, they can make arrangements to continue paying the debt or considering filing their own consumer proposal or bankruptcy. Your spouse is not liable for your debts just because you are married – only if they have also signed to legally accept responsibility for the debt.  Your bankruptcy does not relieve your spouse of their liability for a joint debt and it doesn’t cut it in half either.
  • Your spouse has the right to refuse to disclose their income to the Trustee. This changes the calculation of surplus income and may end up costing you more money or keeping you in bankruptcy longer. Telling income does not make your spouse liable for your debts. Talk to us before you decide “my spouse does not want to be involved.”
  • Certain non-discretionary expenses are deducted from your income before surplus income is calculated. The most common ones are child care for you to go to work, child and spousal support, medical expenses relating to an ongoing condition, and employment expenses that you must incur to work.
  • It isn’t straightforward. Let’s talk, and we’ll figure it out for you.

What does bankruptcy do to my credit record?

  • Accounts included in your bankruptcy are reported on Equifax and TransUnion with R9 ratings. There will also be a note that you filed the bankruptcy.
  • An R9 indicates you have filed bankruptcy or the account has been written off by the lender. This can remain on your credit report for seven years in a first-time bankruptcy or 14 years after discharge if it is your second bankruptcy.
  • A consumer proposal results in R7 ratings, and a record of the consumer proposal can remain on file for three years after you complete your proposal. Equifax and TransUnion have their own policies and may remove the R7 rating sooner.
  • It is more challenging to start re-establishing credit while you are in bankruptcy. Some companies offer secured credit cards to people in bankruptcy, but they tend to have fees associated with them.

Does my spouse have to be involved?

  • Your bankruptcy does not affect your spouse. You don’t marry someone else’s debts.
  • If your spouse is a co-signer or guarantor of your debt, your bankruptcy doesn’t release your spouse from any liability and won’t stop any collection action against them. It only helps you.

How long will I be in bankruptcy?

  • If it is your first bankruptcy, you may be discharged in as little as nine months if your income is below the standard set annually by the Superintendent of Bankruptcy. If your income is above the standard by $200 or more per month, you have what is called Surplus Income, and you will be eligible for an automatic discharge at 21 months. Your payments will be based on your income.
  • If it is your second bankruptcy, you will be eligible for an automatic discharge at 24 or 36 months, depending on your income.
  • If it is your third (or more) bankruptcy, or if you owe more than $200,000 in personal income tax in certain circumstances, you are not eligible for an automatic discharge, and you must appear in Bankruptcy Court for terms of your discharge to be set by the Court.
  • If a creditor opposes your discharge, you will be required to appear in Bankruptcy Court for a hearing to determine your terms of discharge. The Trustee might also be required to oppose your discharge if you don’t follow the process and complete your duties.
  • The Bankruptcy Court can order you to pay more money, can add a suspension of time to your bankruptcy, or can set any other condition they choose.
  • You can avoid the uncertainty of a discharge hearing by filing a consumer proposal.

Why would I choose a consumer proposal and make payments for five years?

  • Bankruptcy is a more complicated process, and there are no guarantees of how much you will end up paying or whether you will receive an automatic discharge. It can end up costing more than a proposal because your payments go up or down with your actual monthly income.
  • When you file bankruptcy, you assign your assets to the Trustee, including any assets you acquire while in bankruptcy. The Trustee is entitled to things like inheritances, life insurance proceeds, lottery winnings and increases in value in your house.
  • You have to report your income monthly and keep the Trustee advised of changes in your financial circumstances in a bankruptcy. There is no ongoing reporting in a consumer proposal once it is accepted.
  • The impact on your credit isn’t as severe for a consumer proposal, especially if you have a previous bankruptcy.

People We’ve Helped

  • Thanks for your help today. On what was turning out to be a pretty sad day, you made a big difference. For that I am grateful.

  • Theresa was referred to me by a close friend. I can only state that my dealings with her have been professional, personable, goal-oriented and, in fact, delightful. Quite impressive I think given the difficult situation I have been in. I would welcome the opportunity to recommend Theresa and, hence, Vine and Williams, to any friend or acquaintance.

  • I just wanted to thank you for meeting me last week. You made, what was for me a difficult situation, very comfortable.

  • Words may not actually say what I want to say but I hope in some measure to convey my sincere thanks for all you have done for us. Thank you, thank you, thank you.

  • I have been struggling with debts and student loans for many, many years after my divorce and felt overwhelmed… living on cash advances and hiding from creditors. Walter Williams took his time listening to my past struggles and how I ended up in this predicament, taking the time to lay out my options and answer any and all questions I had. I was so relaxed and content that what I was doing was the right thing for ME. Claiming bankruptcy was not the end of my life, but the beginning of a more confident and cautious time in my life.”