How do I get the bankruptcy process started?

The Steps to Get the bankruptcy process started

You may ask yourself, “How do I get the bankruptcy Process Started?”

Step 1

1. Your first step is to come to set up an initial consultation with you local Licensed Insolvency Trustee like C.E. Craig & Associates Inc.  This can be done in person, over the phone or via Zoom.  Our Debt Elimination Team will review your personal situation, outline your individual options and answer any questions you may have.  

If you decide on proceeding with a formal insolvency filing, we will provide you with an Application Form and some additional mandatory reading material.  (the Application Form is also available to download or use our fillable PDF Application Form).  The completed application form is what we use to generate your formal insolvency documents.  Generally, to being a bankruptcy, we will need some personal information such as your name and address, an average month worth of family income and expense,  a list of your debts and a list of, and the estimated value of, your assets.

Step 2

2. Submit your completed Application Form to us.  This can be done by dropping the completed paper forms and the backup documents requested to our Quadra Street office, anytime between Monday to Friday from 9-4:30 – no need to make an appointment.  Or you can scan and email (or really old fashioned, send a fax to 250-386-6864). 



When you application is submitted, we request an initial cash deposit of $180 (which can be sent via E-Transfer) Once both are received my our team, we will then book a time and date when we can meet with you in person or virtually to sign the official bankruptcy documents.

Step 3

3. Once you have signed your official documents, we will electronically transmit your bankruptcy information to the Office of the Superintendent of Bankruptcy (“OSB”) who in turn will provide information to the Credit Bureaus that you have declared bankruptcy.  As your LIT, we cannot communicate directly with the Credit Bureaus as we are not credit grantors. 


The OSB’s office will assign you an “Insolvency Estate Number” and we will be formally appointed as your Licensed Insolvency Trustee.

Step 4

4. Within five days being appointed as your LIT,  we will send a copy of your bankruptcy paperwork to each of your creditors, so that they can update their internal records, stop collecting from you (including stopping all collection calls) and update your status with the Credit Bureaus.  Notification to your creditors is generally completed by email or fax, but some Notices are sent by Canada Post, so it can take a few days before your creditors receive your information.

Step 5

5. Once your bankruptcy is filed, there is an immediate Stay of Proceedings, which means that unsecured creditors cannot begin or continue trying to collect from you – so lawsuits, wage garnishees, should all stop.  But it can take some time to filter down to their collection departments within each firm, so you may still expect to receive the odd call or letter.  If this happens, the best advice is to answer the call, tell the creditor/collection agency that your have filed for bankruptcy, and give them our name and number so they will contact us to get your formal documents.

Step 6

6. As your LIT, we will file your most recent outstanding tax returns, up to the date of bankruptcy. We have an obligation to file tax returns for the year you declared bankruptcy plus the year just prior. Thankfully, any money you owe to CRA up to the date of bankruptcy will be included in your bankruptcy. 


The year in which you declare bankruptcy will be divided into two separate tax returns for tax filing purpose. The Pre-Bankruptcy Tax Return (from January 1 to date of bankruptcy) , and the Post-Bankruptcy Tax return (from the day after bankruptcy to December 31 of the bankruptcy year).


Any tax refunds owed to you up to December 31 of the year of bankruptcy, will automatically be forwarded to us as your LIT, which can then go to help pay the trustee fee or for the benefit of your creditors.

Step 7

• 7. During your bankruptcy, you must fulfill your Duties as a Bankrupt. Some of the more important duties are:
• Attend a meeting of your creditors or the OSB, if such a meeting is requested
• Confirm your monthly family income by preparing Monthly Income and Expense Statements and proof of your income. – and Calculation of Surplus Income
• Make monthly payments to the trustee of your Surplus Income or to pay the trustee fee.
• Attend two credit counseling sessions, to learn budgeting and money management skills.

Surplus or Excess Income: During the bankruptcy, your family actual “take home” income earned each month is compared to a federal guideline amount set by the OSB. Amounts earned over the guideline amount is considered surplus, and 50% of surplus income is payable to your LIT, and 50% you can keep. Surplus income payable can extend the length of time in bankruptcy.

Step 8

8. You are eligible to be automatically discharged in 9 months if you have not been bankrupt before and if you have no surplus income payable. Your bankruptcy term can be extended beyond 9 months if you have surplus income or if you have been bankrupt before.

Once you are discharged or finished with the bankruptcy, your debts are discharged.  There are some debts that cannot be discharged after a bankruptcy. Non-dischargeable debts include, child support obligations, alimony, debts that arouse from fraud, court fines, some student loans (unless you completed school greater than 7 years prior to assignment) – for a complete list, check with your LIT)

Step 9

9. A note about your bankruptcy will remain on your Credit Report for a minimum of six years after the date of discharge. Once again, as your LIT we are not able to communicate with the credit bureaus directly. The Office of the Superintendent of Bankruptcy will communicate your discharge status with the credit bureaus. However, after discharge, you should review your personal credit reports to be sure everything has been reported correctly.

Step 10

10. Even while the bankruptcy stays on your credit report, you may be able to get credit, depending on the individual lenders. You can help this along by taking active steps to rebuild your credit. Review Life After Bankruptcy.