relieved woman who is debt free after completing her consumer proposal

Filing for Bankruptcy in Vancouver, BC

Filing for bankruptcy provides a way to eliminate most of your unsecured debts (like credit card debt) and get a fresh financial start.

What is Bankruptcy in Vancouver BC?

Bankruptcy is a legal process in Canada designed to help people and businesses who can’t pay their debts. It provides a way to eliminate most of your unsecured debts (like credit card debt and payday loans) and get a fresh financial start.

Key Points of Filing for Bankruptcy:

Financial Struggles

People or businesses consider bankruptcy when they can’t meet their financial obligations and debts.

Licensed Insolvency Trustee (LIT)

When you file for bankruptcy, you must work with a Licensed Insolvency Trustee, a government-authorized professional, who helps you through the bankruptcy process.

Assets and Liabilities

You must list all your assets and debts. Some assets may be sold to repay creditors.

Debt Discharge

Bankruptcy aims to get rid of most unsecured debts, but some, like child support and certain taxes, aren’t eliminated.

Income and Surplus Payments

Depending on your income and expenses, you may make payments during the bankruptcy to repay creditors.


The length of bankruptcy varies, but for most first-time bankruptcies, it lasts 9 months. It can be extended in specific cases.

Credit Impact

Bankruptcy can have a negative impact on your credit score and will stay on your credit report for up to 7 years).

Bankruptcy Alternatives

Before choosing bankruptcy, it’s important to explore other options, like a consumer proposal, which can be less damaging to your credit and allow you to keep more of your assets.

Alternatives to Bankruptcy

There are several alternatives to bankruptcy in Canada for individuals facing financial difficulties. These alternatives may be more suitable, depending on your specific situation and financial goals. Here are some of the primary alternatives to bankruptcy:

Consumer Proposal

A consumer proposal is a legal process governed by the Bankruptcy and Insolvency Act (BIA) that allows you to make a formal offer to your creditors to repay a portion of your debts over a specified period (usually up to 5 years). If your creditors accept the proposal, it becomes a legally binding agreement, and you can avoid bankruptcy. This option often allows you to keep more of your assets compared to bankruptcy and has a less severe impact on your credit.

Debt Consolidation

Debt consolidation involves combining multiple high-interest debts into a single, more manageable loan with a lower interest rate. This can make your debt more affordable and easier to manage. It doesn’t eliminate your debt but simplifies the repayment process.

Credit Counselling

Credit counseling agencies offer financial education and guidance to help you manage your debt more effectively. They can negotiate with creditors to lower interest rates and create a debt repayment plan that is more manageable for you.

Negotiate with Creditors

In some cases, you can directly negotiate with your creditors to arrange a more favorable repayment plan. Creditors may be willing to work with you to receive at least a portion of the debt rather than risk not receiving anything in the event of bankruptcy.

Informal Settlement

You can work with your creditors to negotiate informal settlements where you agree to pay a reduced amount to satisfy your debts. This may involve lump-sum payments or structured payments over a defined period.

Sale of Assets

If you have assets that are not protected in a bankruptcy, you may consider selling them to raise funds to pay off your debts. This can be a more proactive approach to addressing your financial challenges.

Budgeting and Financial Counselling

Sometimes, a structured budget and financial counseling can help you manage your finances more effectively and avoid accumulating more debt. This is especially valuable if your financial difficulties are due to poor money management habits.

Borrowing from Family or Friends

While it may not be an ideal solution, borrowing money from family or friends can help you pay off debts without the formalities of bankruptcy. However, it’s important to have a clear repayment plan and maintain open communication to avoid straining relationships.

When considering filing for bankruptcy in Vancouver, it’s crucial to consult with a Licensed Insolvency Trustee. They can assess your specific financial situation, provide guidance on the most suitable option, and help you make an informed decision that aligns with your financial goals and capabilities.