HELPING YOU SOLVE YOUR DEBT PUZZLE
How Much Does Personal Bankruptcy Cost?
Let’s explore the costs and payments associated with declaring personal bankruptcy.
Book Your Free Consultation
Let’s explore your personal bankruptcy options together.
How much will I have to pay if I declare bankruptcy?
The question of how much a bankruptcy will cost will depend on quite a few factors. To be sure you understand the process, always talk to a Licensed Insolvency Trustee’s to outline the entire bankruptcy process and the potential costs to you before you decide.
As a general overview of cost, some factors to consider are:
- How much you earn each month.
- Value of any assets that are not exempt – above Exempt Assets values,
- Whether or not you have been bankrupt before,
- If your personal tax debts are above $200,000 representing the majority of your debts.
Throughout the bankruptcy process each month that you are an un-discharged bankrupt, you must submit income and expense statements to the Trustee on a monthly basis, showing how much money your family takes home each month. This amount is compared to a federally set income guideline. Any amount above the guideline is considered to be excess income. 50% of this excess is payable to the Trustee and you can keep the remaining 50%. This is the Surplus Income Calculation.
How Much Does Personal Bankruptcy Cost in Canada?
If I go bankrupt, will I lose everything?
quick answer is no, you are allowed to keep basic personal Exempt Assets (the specific type and amount of assets that are exempt varies between provinces), and RRSP’s, pension plan contributions, RDSP’s, and government grants and interest earned in RESP’s (with some variation depending on the time of contribution)
In British Columbia, the amount of personal property that is exempt from seizure or “Exempt Assets” (items that the Trustee cannot take away from you) in the case of a bankruptcy include the following:
- Household goods up to $4,000;
- Tools of the Trade up to $10,000 in equity value;
- Motor Vehicle equity up to $5,000 (reduced to $2,000 for FMEP maintenance debtors);
- Equity in a Principal Residence ($12,000 in the CRD area, $9,000 outside CRD);
- All necessary clothing and all required medical aids (of debtor or dependent)
The LIT will help you value your personal assets before you begin the bankruptcy process. The valuation considered is the equity in each asset. For instance, if you had a vehicle loan, the “equity value” of your vehicle is the value after the secured creditor’s loan was deducted.
Beyond the Exempt Assets listed above, all other assets (except for assets held by an individual in trust for another person), vest in the Trustee for distribution among your creditors.
What happens to my credit rating if I file for bankruptcy?
A credit score is like a grade-point average from school. It is a snap shot of your past to allow creditors to determine the risk in loaning you more money. The less debt you have in the long run, the more likely you will be able to pay back any future loans. Before a bankruptcy, you credit score will most likely already be poor. A bankruptcy will wipe away old, stale debts and allow you to start with a clean slate. In the short term, a bankruptcy will be a negative hit to your credit report, but in the long run, it may be the best way to permanently improve your score.
Need Debt Help?
Book Your Free Consultation
Easily understand your debt solutions like a Consumer Proposal or Personal Bankruptcy, book a free consultation with the C.E. Craig & Associates Team. Our experienced Licensed Insolvency trustees will be there to support you through debt relief.
Testimonials
Client Testimonials & Reviews
Don’t just take it from us.
See what are happy clients have to say about solving their debt puzzle.
Personal Bankruptcy Resources & Information
Read the latest guides, insights, and resources prepared by our team to help you have peace of mind with your consumer proposal.
-
- Consumer Proposal
- |
- Financial Literacy
- |
- Personal Bankruptcy
How Do Insolvency Trustees Get Paid in Canada?
By Colleen Craig, CPA, CA, FCIRP • March 25, 2026If you’re considering a bankruptcy or consumer proposal, one of the most common and important questions is: How do Licensed Insolvency Trustees get paid? Many people worry about hidden fees -
- Financial Literacy
Does Debt Consolidation Affect Buying a Home in Canada?
By Colleen Craig, CPA, CA, FCIRP • March 18, 2026Buying a home is one of the most significant financial decisions most Canadians will make. If you are carrying debt, you may be considering debt consolidation as a way to -
- Financial Literacy
- |
- Personal Bankruptcy
Banking After Bankruptcy: What You Need to Know
By Colleen Craig, CPA, CA, FCIRP • February 18, 2026Filing for bankruptcy can feel like a financial reset, but many people are surprised to learn that banking does not stop after bankruptcy. In fact, having the right bank account
Contact Us
Reach out to a debt solutions manager today
There can be many solutions to debt problems and every person’s story is unique. At C.E. Craig & Associates Inc. we take the time to listen to you – to help find the best option for you. Every journey begins with one single step.