Bankruptcy in Canada is a federally regulated process, and to be eligible, you must meet specific legal criteria. You can file for personal bankruptcy if:
- You owe at least $1,000 in unsecured debt.
- You are insolvent, meaning you cannot keep up with regular debt payments as they become due.
- The total value of your debts exceeds the value of your assets.
- You are resident in or have ties to Canada.
Unsecured debts can include credit card balances, personal loans, lines of credit, and payday loans. Tax debts to Canada Revenue Agency are also included and you can also include secured debt (like a mortgage) if the payments are too high but usually because the house is worth a lot less than the mortgage.
If you meet these conditions, you can file for bankruptcy through a Licensed Insolvency Trustee (LIT), like here at Baigel Corp. LITs are the only professionals authorized by the Canadian government to administer bankruptcies.
You do not need to be employed to qualify. However, if you have steady income, you may be required to make surplus income payments depending on your earnings.