How Does Bankruptcy Work? Steps 1-10
Overview of the Bankruptcy Process or Procedure in Canada 

Learn the basics about how bankruptcy works in Canada with this guide. Find out about the rules and process of how to file or apply for bankruptcy in order to eventually be discharged.

The bankruptcy process in Canada (declaring bankruptcy) is a big step and not one to take lightly. Once you assign yourself into bankruptcy, it is extremely difficult to change your mind.

Do yourself a favour and make sure that you have explored alternatives to bankruptcy before you decide to go bankrupt. Applying for bankruptcy will impact your life in many ways. No matter how difficult your money problems may seem today, something this important with long term consequences that you might not be fully aware of, is worth considering carefully.

Common Questions About the Bankruptcy Process

• Should I file for bankruptcy or go bankrupt?
• How do I claim or declare bankruptcy?
• What is bankruptcy discharge?

Bankruptcy and Income Taxes

Part of the bankruptcy filing process includes your trustee filing your income tax return for you. If you did not file a tax return for the year prior to declaring bankruptcy, your trustee will do that first. Then they will file a return for the period of January 1 until the day prior to you filing for bankruptcy. Any refunds or tax credits from the government will be sent to your trustee and form a part of your estate. Find out more about bankruptcy and income taxes from CRA (Canada Revenue Agency).

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