We’ve collected some resources for people considering bankruptcy in Ontario.
Step #1: Understand the basics
Bankruptcy in Ontario 101: who can claim?
Anyone who owes more than $1,000 is eligible for personal bankruptcy in Ontario.
However, bankruptcy is considered a last resort option. The government of Ontario will try to first steer you towards less drastic solutions (see the alternatives to bankruptcy section below).
You’ll file with a bankruptcy trustee. This trustee becomes the administrator of your property and assets. The trustee will be responsible for overseeing the sale of your assets and depositing the funds in trust for creditors.
To file bankruptcy, you need to be considered insolvent.
This involves three factors: 1) you owe more than $1,000 2) your debts are greater than the sale of your non-exempt assets and liquidation of your savings, and investments 3) you also are unable to pay your debts when they are due. A trustee will perform this assessment.
The first step in filing bankruptcy is completed after you meet with a trustee and he or she submits a completed Form DC905, Bankruptcy Identification Form.
So what assets will you lose to bankruptcy?
Keep in mind that in some cases, you may be able to keep certain assets. But to pay back your creditors, you’ll need to provide details about these assets for assessment.
The list below is a general guideline of what to expect to be considered to be used to pay your creditors.
- Your home or condo (if you own a home). The value will be assessed by a retail agent or appraiser.
- Car ownership. This usually involves the black book value but could involve an appraisal.
- RRSP and RESP statements.
- Other assets (for example, a boat, investment property).
Step #2: Avoid scams with these government resources
You have likely arrived here by searching “bankruptcy Ontario” and know that there are a lot of sites out there, offering resources and free consultations.
It’s a very noisy market out there. Below, you’ll find official resources from the Government of Canada to help you understand bankruptcy.
Official Revenue Canada Contact Info & Resources
- Canada Revenue Agency help line for bankruptcy information: 1-800-959-8281.
- For questions about bankruptcies that do not relate to income tax matters, contact the Office of the Superintendent of Bankruptcy.
- To make the first step towards filing bankruptcy, you’ll need to contact a truste. Here’s Revenue Canada’s Trustee directory.
- Good site from Revenue Canada with bankruptcy resources and information.
Step #3: Government recommended alternatives to bankruptcy
Bankruptcy is a drastic measure. For that reason, the Office of the Superintendent of Bankruptcy Canada will try to direct you first into one of the following alternatives to bankruptcy.
Before, you can file bankruptcy these options will need to be explored.
In Ontario, the typical alternatives recommended by the government include:
If you live outside of Ontario, you also have these options:
- Consolidation Order (Alberta, Saskatchewan and Nova Scotia)
- Voluntary Deposit Service (Quebec only)
We’ve explained the best alternatives to bankruptcy in our comprehensive guide for Canadians here.
Step #4: Learn more about your bankruptcy options
It’s your job to educate yourself about your rights as a debtor in Ontario.
Most people begin by thinking that they are headed for bankruptcy and then discover that they have other options.
As a side note, we have a story about a man who lost his business and thought bankruptcy was his only option. He is documenting his progress through debt hell here.
A crash course in debt education
If you are a do-it-yourself type person we’ve covered many of these debt reduction options in the following articles.
A guide to avoiding bankruptcy for Canadians
Debt consolidation 101: the most common alternative to bankruptcy
Debt consolidation versus a consumer proposal-what’s the difference?
“I can’t make my student loan payments”–advice for those deep in education debt
“I’m losing my business & headed for bankruptcy” – a true 7-part debt story
Speak to a professional to educate you about bankruptcy
It’s a good idea as well to speak to a professional for an assessment. You can find experts by searching in your city.
If interested, here’s a list of our offices in Ontario.
Our professionals will meet with you and educate you about basic bankruptcy processes, your alternatives, and explain your options as a debtor in Ontario.
Ontario
- Barrie office
- Belleville office
- Brampton office
- Burlington office
- East Windsor office
- Etobicoke office
- Guelph office
- Hamilton office
- Kitchener office
- London office
- Markham office
- Mississauga office
- Newmarket office
- North York office
- Orangeville office
- Oshawa office
- Ottawa office
- Peterborough office
- Port Hope office
- Sarnia office
- Waterloo office
- West Windsor office
