C.E. Craig & Associates Inc.

Corporate Bankruptcy vs Personal Bankruptcy

Canadian Corporate Bankruptcy vs Personal Bankruptcy:

What’s the difference?

Quite often as a Licensed Insolvency Trustee and a Chartered Professional Account we deal with business and their owners who are experiencing financial difficulties. They are considering both corporate bankruptcy vs personal bankruptcy.  At times both the business and the individual business owner needs to both deal with their debts.  However, both the corporation and the owners of the company are separate legal entities and have different legal responsibilities.


The question that often arises from owners, directors, and shareholders of small and medium corporations is:

“Should I declare a business/corporate bankruptcy, personal bankruptcy or both?”

Business owners need to understand the separation between the corporate business and the individual. Certainly this is especially true in situations where personal and business debts and assets have become entwined.

Sole Proprietor

If you are a sole proprietorship, then your personal assets and personal debts cannot be separated from those of the business. If you are a sole proprietor or partnership, and have business  debts, then you also personally have debt. In these situations, when you are considering a business bankruptcy, it is the same thing as a personal bankruptcy.

Limited Company

In Canada, a limited company is a separate person or a separate legal entity under the law.

In Canada, both individual and corporation have financial options when insolvent. Both can declare bankruptcy or enter into a debt repayment plan to creditors by way of a Proposal.   If a company files a restructuring Proposal, the hope is that the company will continue to operate. A Proposal can allow companies to shed some debt, cancel contract, or other financial hindrances all in one process to become financially stable.   In bankruptcy the company will stop operating immediately and the assets are sold for the benefit of the creditors.


Corporate assets and debts are separate and distinct from the shareholders’ own personals assets.  A company is a separate legal entity.

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What if the Company cannot continue?

If the company is not viable or the creditors do not agree to the restructuring plan, it may be necessary to go through a formal corporate bankruptcy process. A formal corporate bankruptcy only takes place if there is sufficient assets available for distribution to the unsecured creditors.

Business Advice

Our business team as C.E. Craig & Associates Inc have helped business and people eliminate their debts for over 20 years.  Our experience and business advice has helped business shed debt and become viable. is here to help you make that decision and walk you through the process.  We understand how difficult the decision to file bankruptcy or to consider a business proposal. But sometimes the best option for businesses in financial trouble is to reach out before its too late.

Let us guide you through the process, so we can help your company get the best possible outcome. We’ve compiled a list of our most frequently asked questions to help give you the answers you need. Our business team is available by phone or email if you have additional questions or if you need to discuss your situation.

Corporate vs Personal Bankruptcy

When is my bankruptcy over?

For a first time bankrupt, an automatic discharge will be issued after 9 months from the date of your bankruptcy in the following circumstances:


  • You have completed two counseling sessions;
  • Your creditors, the Superintendent of Bankruptcy, and the Trustee are not opposing your discharge;
  • You have not had surplus income based on the Superintendent’s Standards during your bankruptcy.

If your surplus income payments are an average of $100 or more based on the Superintendent’s Standards during the first 9 months of your bankruptcy, you are required to continue submitting monthly statements of income and expenses together with any payments for an additional 12 months. You will receive an automatic discharge after 21 months if you have submitted the monthly statements, paid all surplus income accumulated during the 21 months and complied with your duties as a bankrupt.

Where to Turn for Accurate Advice?

There are many who will provide debt advice to consumers and business, so it is so important to seek out a reliable and accurate information.  If you are ever unsure where to turn for accurate information, best to rely on the Canadian Government recommendations.


The Office of the Superintendent of Bankruptcy provides detailed information to Canadians seeking debt advice.  Their site provides information about the Canadian insolvency system and how to find a local Licensed Insolvency Trustee.  LIT’s are the only professionals licensed in Canada to offer bankruptcy or consumer proposal services.

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Colleen Craig


Colleen founded C.E. Craig & Associates Inc. in 2003 after 10 years in the insolvency industry. As a federally licensed Trustee in Bankruptcy she deals with the day-to-day issues that creditors and debtors encounter when they are faced with Insolvency situations. As a Chartered Accountant, Colleen brings a pragmatic approach to dealing with the complex matters and finding the right solution for all parties.

Janet White


Janet has been with C.E. Craig & Associates Inc. since 2003, when the company opened. She helped build the practice from the ground up, giving her a thorough understanding of the ins and outs of insolvency legislation and procedures.

Lesley Bentley


We were pleased to welcome Lesley Bentley into our firm in 2013. She has been an Estate Administrator for over 30 years offering advice to individuals struggling with personal financial issues.

Badger the Dog


 No formal insolvency training, but also non judgmental, loyal, and cute.

Reach out to a debt solutions manager today:




Reach out to a debt solutions manager today:




Reach out to a debt solutions manager today:







Reach out to a debt solutions manager today: