How to File for Bankruptcy in Canada Without a Lawyer (2026 Guide)

Only Licensed Insolvency Trustees (LITs) can file bankruptcy in Canada—no lawyer, accountant, or debt consultant has this authority under the Bankruptcy and Insolvency Act. The filing process takes 1 to 2 weeks from initial consultation: you provide financial documents, the LIT prepares paperwork, you sign the assignment in bankruptcy, and the LIT files electronically with the Office of the Superintendent of Bankruptcy.

Filing bankruptcy is a legal process with specific requirements and timelines established by federal law. Find a Licensed Insolvency Trustee to schedule a free consultation and understand each step so you can prepare properly and avoid delays that could extend your time to discharge.

Who can file bankruptcy in Canada?

Licensed Insolvency Trustees are the only professionals authorized to file and administer bankruptcies under the Bankruptcy and Insolvency Act. Lawyers cannot file bankruptcies. Accountants cannot file bankruptcies. Financial advisors and debt consultants cannot file bankruptcies. Only federally licensed LITs have this authority.

LITs are licensed by the Office of the Superintendent of Bankruptcy after completing specialized education and passing rigorous examinations. Active LITs must maintain professional liability insurance, complete continuing education annually, and submit to OSB audits and oversight. This regulation protects consumers from incompetent or fraudulent bankruptcy administration.

Verify LIT credentials before signing any documents or paying fees. The OSB maintains a searchable database of all licensed trustees at the Office of the Superintendent of Bankruptcy website. Enter the person’s name or firm name to confirm active licensing status. If someone claims to be an LIT but does not appear in the database, they are operating illegally.

Some companies advertise bankruptcy services but are not LIT firms. Debt settlement companies, credit counseling agencies, and financial consulting firms sometimes claim they can help you file bankruptcy. These companies may employ an LIT, but you must verify this. Request the LIT’s name and license number and verify independently with the OSB.

Working directly with an LIT firm avoids middleman fees and delays. Some companies act as referral services, collecting your information and passing it to an LIT for a fee. This adds unnecessary costs and delay. Contacting LIT firms directly ensures you receive trustee services at regulated costs without markup.

LITs have a dual role serving both debtors and creditors. Trustees are officers of the court and must act in the best interests of creditors while treating bankrupts fairly. This means the LIT cannot advocate solely for you—they must balance your interests with creditor recovery. Understanding this dual role prevents unrealistic expectations about trustee advocacy.

Most LIT firms offer free initial consultations with no obligation. Consultations typically last 30 to 60 minutes and cover your financial situation, bankruptcy costs and timeline, consumer proposal alternatives, and answers to your questions. Use consultations with multiple trustees to compare recommendations and service quality.

Step 1—Schedule free consultation with Licensed Insolvency Trustee

Free consultations provide personalized analysis of your financial situation without obligation or cost. Most LIT firms offer same-day or next-day appointments. Some firms provide evening and weekend consultations to accommodate work schedules.

Prepare basic financial information before the consultation. Know approximately how much total debt you owe, your monthly net income, whether you own a home or vehicle, and your estimated monthly living expenses. Exact amounts are not required—the trustee helps you calculate precise figures during the consultation.

The trustee reviews all debt relief options during the consultation. The Bankruptcy and Insolvency Act requires LITs to explain bankruptcy, consumer proposals, and alternatives before recommending any specific option. Trustees who immediately push bankruptcy without discussing proposals may not be providing comprehensive advice. Ask specifically about consumer proposal options even if the trustee does not mention them.

Bring questions about costs, timeline, asset protection, and credit impact. Write down questions before the consultation to ensure you cover all concerns. Common questions include: What is the total cost for my situation? How long until discharge? Can I keep my house and car? What happens to my tax refunds? Will my spouse be affected? How does this impact my credit score?

Consult multiple Licensed Insolvency Trustees before deciding. Different trustees may have different perspectives on whether bankruptcy or consumer proposal better fits your situation. Most people consult 2 to 3 trustees to compare recommendations. This comparison ensures you receive comprehensive advice and choose the trustee you are most comfortable working with.

Many consultations occur by phone or video conference. In-person meetings are not required for the initial consultation. Phone and video consultations work well for people in rural areas or those who cannot travel easily. However, you must eventually meet in person or via secure video conference to sign official documents.

Red flags during consultations include high-pressure sales tactics, refusal to discuss consumer proposals, vague cost estimates, or requests for upfront payment beyond a small consultation fee. Reputable trustees provide clear cost breakdowns, discuss all options thoroughly, and allow time for you to consider your decision without pressure.

Step 2—Gather required documents and financial information

Complete and accurate financial disclosure is legally required under the Bankruptcy and Insolvency Act. Failing to disclose assets, income, or debts can result in discharge refusal, bankruptcy annulment, or criminal charges for bankruptcy fraud. Gather documents carefully and disclose everything even if you think it might not matter.

Proof of identity requires government-issued photo identification. Driver’s license, passport, permanent resident card, or provincial photo ID cards are acceptable. The trustee verifies your identity to prevent fraudulent bankruptcy filings. Birth certificates without photos are not sufficient.

Income verification includes recent pay stubs (last 2 to 3 months), T4 slips from previous year, Notice of Assessment from CRA for the most recent filed tax year, or tax returns with financial statements if self-employed. If you receive government benefits—EI, CPP, disability, social assistance—provide benefit statements showing monthly amounts. Your spouse’s income is also required even if your spouse is not filing bankruptcy because spouse income affects surplus calculations.

Complete debt list includes every creditor you owe money to regardless of amount. Include credit cards, lines of credit, personal loans, payday loans, student loans, income tax arrears, utility arrears, medical bills, money owed to family or friends, and any other obligations. Provide creditor names, account numbers, and approximate amounts owed. Missing creditors causes complications—add every debt even small ones.

Asset list with estimated values covers everything you own or have an interest in. Include your home (fair market value and mortgage balance), vehicles (year, make, model, mileage, estimated value, loan balance), bank accounts (institution, account type, recent balance), RRSPs and TFSAs (institution, approximate value), life insurance policies (face value, cash surrender value), household goods and furniture (total estimated value), tools and equipment if self-employed, and any other property. Be conservative with estimates—overvaluing helps avoid later disputes.

Monthly expense breakdown lists all regular spending including rent or mortgage, utilities (heat, electricity, water, internet, phone), food and groceries, transportation (car payment, insurance, gas, maintenance, or public transit), insurance (home, auto, life), child care, child support or spousal support paid, medications and health expenses, and other regular costs. The trustee uses this information to assess your financial situation and calculate potential surplus income.

Recent financial transactions require disclosure to identify preferential payments or asset transfers. The trustee reviews bank statements, credit card statements, and major transactions from the past 12 months. Preferential payments—paying one creditor more than others before bankruptcy—may be recovered by the trustee. Transferring assets to family members before bankruptcy can be challenged as fraudulent conveyances.

Corporate documents are required if you own or operate a business. Provide articles of incorporation, business tax returns, financial statements, and details of business debts and assets. Sole proprietors provide business income and expense details. Corporate bankruptcy is separate from personal bankruptcy, but business ownership affects personal bankruptcy administration.

Calculate your bankruptcy cost estimate using the information you gather. Knowing your approximate cost before filing prevents surprises and allows comparison to consumer proposal costs.

Step 3—LIT prepares and you sign assignment in bankruptcy

The Statement of Affairs is the core bankruptcy filing document listing all debts, assets, income, expenses, and financial history. Your LIT completes this form based on the information you provided. Review the Statement of Affairs carefully before signing—you are swearing under oath that the information is true and complete.

Signing the assignment in bankruptcy means you are voluntarily declaring yourself bankrupt. This is not a decision to take lightly. Once signed and filed, bankruptcy proceedings begin immediately and cannot be easily stopped. You can withdraw a bankruptcy filing before it is officially filed with the OSB, but after filing, withdrawal requires annulment—a court process that is costly and time-consuming.

Additional documents include the assignment in bankruptcy itself, certificate respecting counselling, statement of monthly income and expenses, and authorization forms allowing the trustee to contact creditors and access credit reports. Sign all required forms and keep copies for your records.

Electronic filing with the Office of the Superintendent of Bankruptcy occurs immediately after you sign documents. Most LITs file electronically within hours of obtaining your signature. Electronic filing provides instant confirmation and case number. The filing timestamp determines when the stay of proceedings begins.

Filing fees are paid by the trustee from bankruptcy receipts. The federal filing fee is $86.16 for first-time bankruptcy or $172.34 for subsequent bankruptcies. This fee is paid to the OSB at filing but comes from your monthly payments to the trustee—you do not pay it separately.

Creditor notification begins within 24 hours of filing. The trustee sends notices to all creditors listed in your Statement of Affairs informing them of your bankruptcy filing, the case number, and the trustee’s contact information. Creditors must stop all collection actions upon receiving this notice. Employers are notified if wage garnishment is in effect so they can stop deductions.

The bankruptcy certificate is issued by the OSB after filing. This certificate confirms your bankruptcy is officially registered. Creditors, courts, and government agencies require the bankruptcy certificate number for their records. Your trustee provides copies of the certificate as needed.

Typical timeline from initial consultation to filing is 1 to 2 weeks. Simple cases with straightforward finances may file within a few days. Complex cases involving business ownership, multiple properties, or significant assets may take 2 to 3 weeks while the trustee completes due diligence. If you face imminent wage garnishment or asset seizure, trustees can expedite filing within 48 to 72 hours.

Step 4—Automatic stay of proceedings takes effect

The stay of proceedings is your immediate legal protection under Section 69.3 of the Bankruptcy and Insolvency Act. This stay stops all creditor collection actions automatically upon filing—no court hearing or judge approval is required. The stay is self-executing based on your bankruptcy registration with the OSB.

Wage garnishment stops within one to two pay periods after filing. Your trustee notifies your employer and the creditor garnishing your wages. The employer must stop garnishment deductions immediately upon receiving notice. Depending on your pay schedule, one or two more garnished paychecks may occur before the garnishment fully stops. Your trustee can provide a certificate of bankruptcy to your employer to expedite the process.

Collection calls and letters stop within 24 hours. Creditors who receive bankruptcy notice must immediately stop all collection communications. Automated dialer systems take 24 to 48 hours to update, so you may receive one or two more calls during this window. After 48 hours, report any continued collection calls to your trustee—creditors who violate the stay face penalties.

Creditor lawsuits are frozen immediately. Active lawsuits cannot proceed while you are bankrupt. Court hearings are automatically stayed. Judgments obtained before bankruptcy cannot be enforced. However, lawsuits are frozen, not dismissed—if your bankruptcy is annulled or abandoned, lawsuits can resume. Discharge permanently eliminates judgments for unsecured debts.

Bank account freezes imposed by creditors are released. If CRA or other creditors froze your bank account before bankruptcy, your trustee notifies them to release the freeze. Release typically occurs within 48 to 72 hours. Money in the account at the time of freezing may be claimed by the trustee as an asset depending on timing and circumstances.

Interest stops accumulating on unsecured debts. Credit cards, lines of credit, personal loans, and other unsecured debts stop accruing interest on your filing date. No matter how long your bankruptcy lasts—9 months, 21 months, or longer—interest does not continue. This freeze saves thousands of dollars on high-interest debts.

Secured creditors retain rights to their collateral. The stay of proceedings does not stop mortgage foreclosure if you are behind on payments or car repossession if you default on a vehicle loan. Secured creditors have priority rights to their collateral that survive bankruptcy. To keep your house or car, you must stay current on secured debt payments throughout bankruptcy.

Child support and spousal support obligations continue unaffected. Family support is not stayed by bankruptcy. If you owe support arrears, the arrears are not discharged. If wage garnishment exists for support payments, it continues during bankruptcy. Support obligations are priority debts that survive bankruptcy.

Student loans less than 7 years old survive bankruptcy. The stay stops collection during bankruptcy, but discharge does not eliminate student loans less than 7 years from your end of studies date. After 7 years, student loans are discharged like other unsecured debts. During bankruptcy, student loan creditors cannot garnish wages, but the debt remains after discharge if less than 7 years old.

Post-bankruptcy debts are not stayed. If you incur new debts after filing bankruptcy—new credit card charges, new loans, new tax obligations—these are not part of your bankruptcy and the stay does not protect you from collection on post-bankruptcy debts. Keep finances separate and do not incur unnecessary new debt during bankruptcy.

Step 5—Attend creditor meeting if called and two mandatory counselling sessions

Creditor meetings are optional and occur only if requested by creditors or the OSB within 45 days of filing. Most bankruptcies—approximately 95% according to industry estimates—do not have creditor meetings. Meetings are called only when creditors want to question your financial affairs or believe assets or income are higher than disclosed.

If a creditor meeting is called, you must attend in person or via video conference. The trustee chairs the meeting and creditors may attend and ask questions about your debts, assets, income, and how you accumulated debt. You must answer truthfully under oath. Meetings typically last 30 to 60 minutes. Failure to attend can result in discharge refusal.

Prepare for creditor meetings by reviewing your Statement of Affairs thoroughly. Creditors may ask detailed questions about specific transactions, asset values, or income sources. The trustee helps you prepare and can object to inappropriate questions. Most creditor meetings are routine and non-confrontational unless fraud or hiding assets is suspected.

Two mandatory financial counselling sessions are required under the BIA before discharge. These sessions cost approximately $85 each plus tax ($170 total). The first session must occur within 60 days of filing. The second session must occur after the first with reasonable time between them—typically 3 to 4 weeks apart.

Counselling session content covers budgeting, credit use, identifying warning signs of financial trouble, and rebuilding credit after bankruptcy. Sessions are typically one-on-one with a counsellor at the trustee’s office and last 60 to 90 minutes each. Some trustees offer group sessions where multiple bankrupts attend together.

Completion certificates are issued after each counselling session. Your trustee needs both certificates before processing your discharge. If you do not attend both sessions, your discharge is automatically refused until sessions are completed. No exceptions exist—everyone must complete both sessions regardless of financial sophistication.

Monthly income and expense reports are required throughout bankruptcy. You must file a monthly report with your trustee showing all income sources and major expenses. This reporting tracks whether your income changes during bankruptcy, which affects surplus income calculations. Reports are usually simple one-page forms or online submissions taking 10 to 15 minutes monthly.

Failure to report income changes is a serious violation. If you get a raise, receive a bonus, start a second job, or experience any income increase, you must report this immediately. Unreported income discovered later can result in discharge refusal or conditional discharge requiring payment of the unreported surplus income before discharge is granted.

Cooperation with your trustee throughout the process is essential. Respond promptly to requests for information or documentation. Attend all required meetings and counselling sessions on time. File monthly reports by their due dates. Trustees have discretion to oppose discharge if you fail to cooperate—making discharge more complicated and expensive.

Step 6—Make monthly payments covering trustee fees and surplus income

Monthly payment amounts depend on your income and whether you have surplus income above federal thresholds. Low-income filers with no surplus income typically pay $200 to $250 monthly for 9 months totaling approximately $1,800 to $2,250. This covers minimum trustee fees and counselling costs.

Surplus income calculations use the 2025 Superintendent’s Standards thresholds. A single person with net monthly income above $2,666 has surplus income and must pay 50% of the excess. For example, net income of $4,000 minus $2,666 threshold equals $1,334 surplus. Payment is $667 per month (50% of surplus) for 21 months totaling $14,007 in surplus payments plus trustee fees.

Household size affects surplus thresholds. A couple with no children has a threshold of $3,318 monthly. A family of four has a threshold of $4,953 monthly. Larger households can earn more before surplus income applies. Your spouse’s income is counted when determining household size and threshold even if your spouse is not filing bankruptcy.

Payment schedules are typically monthly but can be arranged semi-monthly or weekly. Most bankrupts set up automatic bank withdrawals on their payday to ensure payments are never missed. Manual payments by cheque or e-transfer are accepted but require discipline to maintain on schedule.

Missed payments risk discharge refusal or bankruptcy annulment. Missing one or two payments may result in trustee warnings. Missing three or more payments often triggers annulment proceedings where the trustee applies to court to cancel your bankruptcy. Annulment returns you to pre-bankruptcy status with all debts restored and no discharge.

Income changes during bankruptcy must be reported immediately. If you lose your job, your surplus income decreases or may be eliminated. If you get a raise, your surplus increases. Your trustee recalculates surplus monthly based on reported income. Failing to report increases can result in owing significant back payments at discharge.

Payment receipts should be kept for your records. The trustee provides receipts or statements showing payments received. Keep these until after discharge in case any disputes arise about payment history. Electronic banking records also serve as proof of payment.

Asset liquidation payments may be required in addition to monthly fees and surplus income. If you have non-exempt equity in your home or vehicle, you must pay this amount to the trustee during bankruptcy. These payments are typically arranged as installments spread over the bankruptcy period. For example, $15,000 in non-exempt home equity might be paid at $715 per month over 21 months alongside surplus income payments.

Refinancing or borrowing to pay non-exempt equity is common. Many bankrupts refinance mortgages or borrow from family members to pay non-exempt equity as a lump sum. This approach avoids extended payment schedules and allows the bankruptcy to proceed on the standard timeline.

Step 7—Receive discharge after 9-21 months for first-time bankruptcy

Discharge is the legal event that eliminates your obligation to pay discharged debts. Once discharged, you are no longer legally required to pay unsecured debts included in your bankruptcy. Creditors cannot pursue you for payment after discharge. Wage garnishment and collection attempts for discharged debts are illegal.

First-time bankruptcy with no surplus income discharges automatically after 9 months. Automatic discharge means no court hearing or application is required—the discharge occurs by operation of law when you complete all bankruptcy requirements. The trustee files your discharge documents with the OSB and you receive a Certificate of Discharge.

First-time bankruptcy with surplus income discharges automatically after 21 months if you have paid all surplus income and met all other requirements. The 21-month timeline is fixed and cannot be shortened even if you pay all surplus income early. However, some trustees may agree to early discharge if you pay surplus income in full ahead of schedule.

Second-time bankruptcy takes 24 months minimum with no surplus income or 36 months with surplus income. Automatic discharge may be available but is not guaranteed—creditors and the trustee scrutinize second bankruptcies more carefully. Court applications for discharge are common in second bankruptcies especially if creditors object.

Third-time or subsequent bankruptcies require court application for discharge with no automatic timeline. You must apply to court and attend a hearing where the judge determines whether to grant discharge and under what conditions. Judges may grant absolute discharge, conditional discharge requiring partial debt repayment, suspended discharge delaying discharge for additional time, or refuse discharge entirely.

Certificate of Discharge is issued by the OSB after all requirements are met. This certificate is your proof that debts are discharged. Keep the original certificate permanently—you may need it for future credit applications, employment background checks, or professional licensing. Obtain extra certified copies from your trustee if needed.

Discharged debts are permanently eliminated and cannot be revived. Creditors who attempt collection on discharged debts violate federal law. If this occurs, provide the creditor with your bankruptcy certificate and discharge certificate. If collection continues, file a complaint with the OSB or consult a lawyer—you may have grounds for legal action against the creditor.

Non-dischargeable debts survive despite discharge. Child support arrears, spousal support, court fines, restitution orders, student loans less than 7 years old, and debts arising from fraud are not discharged. You remain legally obligated to pay these debts after bankruptcy. Payroll source deductions and some CRA trust debts also survive discharge.

Credit rebuilding begins immediately after discharge. Your bankruptcy remains on your credit report as an R9 rating for 6 to 7 years from discharge, but you can begin rebuilding credit immediately. Apply for a secured credit card requiring a deposit, make all payments on time, keep balances low, and gradually your credit score improves. Most people achieve credit scores of 650 to 700 within 2 to 3 years of discharge.

Consumer proposals offer similar debt relief with less severe credit impact—R7 rating instead of R9 and removed from credit reports 3 years after completion. For people with assets or stable income, proposals often provide better outcomes than bankruptcy at comparable or lower costs.

Bottom Line

Filing bankruptcy in Canada requires working with a Licensed Insolvency Trustee—the only professionals authorized under the BIA to administer bankruptcies—and involves seven steps from initial consultation through discharge. The process takes 1 to 2 weeks from consultation to filing as you gather documents (identity, income, debts, assets, expenses), sign the assignment in bankruptcy, and the LIT files electronically with the OSB. Filing immediately triggers the automatic stay of proceedings that stops wage garnishment within 1 to 2 pay periods, ends collection calls within 24 hours, freezes lawsuits, and releases bank account freezes within 48 to 72 hours. First-time bankruptcies with no surplus income discharge in 9 months with total costs of $1,800 to $2,500 paid through monthly installments of $200 to $250, while surplus income above federal thresholds extends discharge to 21 months and costs $5,000 to $15,000 or more depending on income level. Before filing, calculate your consumer proposal cost to compare against bankruptcy—proposals reduce debt by 60 to 80%, protect all home and vehicle equity, and often cost less overall for homeowners and higher-income earners despite longer 3 to 5 year timelines.

Disclaimer: This article provides general information about filing bankruptcy in Canada and should not be considered legal advice. Bankruptcy rules vary by province and circumstances. Find a Licensed Insolvency Trustee for personalized guidance.

Last updated: February 2, 2026