BC’s largest firm of consumer and small business focused Licensed Insolvency Trustees Sands & Associates answer commonly-asked questions about debt and debt solutions.
Q: How can I find out if I qualify for bankruptcy?
A: In Canada, there are few criteria that need to be met to qualify for bankruptcy debt relief.
In general, a person may be eligible for bankruptcy if they are insolvent. This means that they owe $1,000 or more and are unable to repay their debt as it becomes due. If you think it seems very easy to qualify for bankruptcy, you’re right! The reason the eligibility is so simple is that the bankruptcy process is intended to give relief to honest but unfortunate people if they need it.
That being said, it usually wouldn’t make sense to file a bankruptcy if you only owed $1,000. When evaluating if a bankruptcy is an appropriate solution, a Licensed Insolvency Trustee will take other factors into consideration too, such as your income, the amount of debt you have, and any other specific challenges you may be facing.
If you owe $1,000 or more and want to get out of debt, bankruptcy could be one solution, but there may be others to consider. The same legislation (the Bankruptcy and Insolvency Act) that covers how bankruptcy works in Canada also sets out another legal debt option – a Consumer Proposal.
Consumer Proposals can be a great alternative to bankruptcy, especially where a person has some ability to contribute payment towards their debts, but is unable to repay the entire debt plus interest. Read more about Consumer Proposals here.
If you’re facing financial challenges, the best thing to do is to meet with a Licensed Insolvency Trustee. During a one-on-one meeting they’ll help you evaluate your situation and all possible debt solutions, that way you can learn the ins and outs and decide on the course of action you feel is best for your circumstances.
Discover your debt solution – book your confidential, free debt consultation with Sands & Associates today. We have been helping BC residents become debt-free since 1990.