In Canada, the cost of bankruptcy is at least $1,800. The fee is payable to the trustee for their time. It also includes administration services and the costs associated with filing the appropriate bankruptcy forms with the Court. How much a trustee may charge for their services is determined by the Office of the Superintendent of Bankruptcy (OSB).
There May be Additional Costs to Pay in Order to be Discharged
Depending on how much income someone has, and the nature of their debts and assets, they may also be required to pay extra towards their debts before they are able to obtain their bankruptcy discharge. Funds are paid to their trustee and then disbursed to creditors.
While these additional funds aren’t considered a fee, they can increase what it costs to go bankrupt in Canada.
You will also need to pay extra towards your debts if you receive any lump sums of money while you’re working through your bankruptcy process. Lump sums of money include, for example, tax refunds, winning the lottery, or receiving an inheritance or insurance settlement.
How to File for Bankruptcy When You Can't Afford the Fee
If someone needs to file for bankruptcy but is not able to afford the fee, the Office of the Superintendent of Bankruptcy (OSB) will provide assistance in finding a bankruptcy trustee who will then be assigned to someone’s case for a reduced fee. You may be able to get help with or get an exemption from the financial cost (fees and deductible) of bankruptcy. The amount of the fee is based on what the trustee must pay to file someone’s bankruptcy paperwork with the Court.
When Not to Declare Bankruptcy - When Fees and Associated Costs Are Too Expensive
Many people wonder why it costs so much to go bankrupt; and they think that they need to go bankrupt because they don’t have enough money to pay their debts. Not everyone who is insolvent and unable to pay their debts needs to go bankrupt. It depends on your situation if bankruptcy is a good option or not.
Avoid Bankruptcy by Communicating with Creditors - Get Help to Stop Collection Calls
There are a lot of situations where once a creditor is fully aware of someone’s circumstance, they no longer actively attempt to collect what is owed. There are effective ways to communicate with creditors to ask them to help you, which will stop collection calls. After the statute of limitation has been reached, a debt can no longer be legally collected (see the statute of limitations for each province and territory across Canada).
Common Questions About Costs and Fees Associated With Bankruptcy
- Can I get help with or get an exemption from the financial cost (fees and deductible) of bankruptcy?
- What are bankruptcy forms?
- What are bankruptcy Chapters 7 and 13? (USA)
- What is the definition of bankruptcy?
Don't Let the Cost of Bankruptcy Stop You from Getting More Information - Contact Us
The costs and fees of bankruptcy are very similar in each province, but the rules and regulations are somewhat different. Bankruptcy laws are designed to ensure that overall costs are based on someone's individual situation.
If you're not sure if you need go bankrupt or not, or if communicating with your creditors might be better, contact us for more information. We can explain how bankruptcy rules affect debt collection in your province and what your options are for dealing with your debts.