Bankruptcy advice

What is Bankruptcy?


Bankruptcy is a legal procedure under the Bankruptcy and Insolvency Act (the “BIA”), designed to provide financial relief to individuals, corporations partnerships and certain trusts with debt burdens by halting the legal actions of creditors. At an end of bankruptcy, you will be discharged from your debts. This means that you no longer have legal obligations to repay your debts.


What are some of types of debts in Bankruptcy?


i. Credit Card

ii. CRA Income Tax Debt

iii. Student Loans

iv. Line of Credit

v. Unsecured Loans

vi.  Payday Loans


What happens during Bankruptcy?


i. All collection calls from your creditors will stop

ii. Creditors will no longer be able to garnish your wages

iii. You can access your bank accounts and all garnishee orders will be lifted

iv. All court proceeding will stop temporarily

Insolvency advice

While the terms bankruptcy, insolvency, all relate to debt and are often used interchangeably, they do not share the same meaning. Insolvency is a state of financial distress and bankruptcy is the legal process for an insolvent debtor to surrender assets in exchange for relief from debts. Someone can be insolvent but not bankrupt. On the other hand, a bankrupt must be insolvent.

Debt advice

A consumer proposal is a legally binding agreement that will protect you from creditors, stop collections calls and wage garnishments, and allows you to keep your assets.


If your total debt excluding your mortgage, is less than $250,000, and you cannot reasonably pay your unsecured debts in a timely manner, you may qualify for a consumer proposal. A consumer proposal is a binding legal agreement made between a person and their unsecured creditors. By law, only a licensed insolvency trustee may submit and oversee a consumer proposal.


When a consumer proposal is accepted by the majority of your unsecured debt, it will:

  1. Force all the unsecured creditors to accept the proposal
  2. Reduce the amount of out outstanding debt you owe to an amount you can afford
  3. Pay off all your unsecured debt covered in the Proposal in 5 or less years
  4. Allow you to keep your home, as long as you keep making the mortgage payments
  5. Stop all legal collection actions by your unsecured creditors, including garnishees, court actions, collection calls, etc.
  6. Give you the chance to get on with your life