People find themselves in financial difficulty for a whole variety of reasons. Some situations are short term and can be overcome without lasting stress or financial damage. Other situations are more difficult to get past. Consider the financial changes that you would face if your marriage were to break down, if you were laid off from your job, or if you were diagnosed with an illness that prevented you from working. Unfortunately, the common result is that people accumulate debts that are beyond their means to repay in full.
If your situation is one where you find yourself facing the possibility of personal bankruptcy you may wonder if you are eligible to file. Let’s review the eligibility requirements for filing bankruptcy pursuant to the Canadian Bankruptcy & Insolvency Act.
- Your debts must at least $1,000. This amount is set by law. It is hard to imagine that a person would file bankruptcy for this small an amount.
- You must be insolvent, meaning that you are unable to pay your debts in full. This is in reference to your monthly income or your ability to sell assets to pay your debts.
- You must have an ongoing connection to Canada, either by residing in Canada or owning property in Canada.
- If you filed bankruptcy previously, that bankruptcy must be complete.
Even if you are eligible to qualify for bankruptcy, filing personal bankruptcy should always be viewed as the last resort for dealing with debt. A licensed insolvency trustee can help you review your circumstances and understand all of the options so that you can make the best choice possible.