Bankruptcy should be considered only as a last resort, after you have exhausted all means to keep your business afloat and pay all your creditors.
Although declaring bankruptcy can feel like a failure, it can also provide relief.
When you’re in bankruptcy, no unsecured creditor can garnishee your wages or initiate any other collection action against you. However, your secured creditors can repossess any property or collateral you had secured against a loan, such as your car or house.
You also have to pay any taxes outstanding to Canada Revenue Agency. Bankruptcy does not affect the liability of someone who guaranteed or co-signed a loan on your behalf.
If you need to declare bankruptcy, you must contact a trustee in bankruptcy, an individual licensed by the Office of the Superintendent of Bankruptcy to administer the bankruptcy process. A trustee will:
- Discuss your situation and your options
- Complete the required forms
- File the bankruptcy with the Office of the Superintendent of Bankruptcy
- Sell your assets
- Notify your creditors of the bankruptcy
- Prepare a report to the Superintendent of Bankruptcy describing your actions during the bankruptcy
Visit the Office of the Superintendent of Bankruptcy website for more information. You can find a trustee in the business pages directory in your phonebook.