Bankruptcy

Personal bankruptcy is a legal debt-relief process that can discharge many unsecured obligations and stop most collection activity. It may provide relief from credit-card debt, unsecured personal loans and other eligible balances, but it has important consequences. Credit Matters helps you compare bankruptcy with every reasonable alternative before referring you to a Licensed Insolvency Trustee.

Who administers bankruptcy?

Only a Licensed Insolvency Trustee, regulated by the Office of the Superintendent of Bankruptcy, can file and administer a bankruptcy in Canada. Credit Matters is not a Licensed Insolvency Trustee. We provide financial counselling, help you understand the long-term impact and connect you with a qualified trustee when appropriate.

• Most creditor calls and collection actions stop after filing
• Wage garnishments and lawsuits related to included debts generally stop
• Eligible unsecured debts may be discharged
• You complete required duties and financial counselling sessions

Alberta bankruptcy exemptions

Provincial exemption rules may protect essential property, but values, ownership, secured financing and individual circumstances matter. A Licensed Insolvency Trustee should confirm current exemption amounts before you rely on them.

• Necessary clothing and personal property, subject to statutory limits
• One vehicle, subject to an equity limit
• Equity in a principal residence, subject to an exemption limit
• Tools required to earn income, subject to a limit
• Many registered savings and pension assets, subject to applicable rules

Your home, vehicle, spouse and business

A spouse is not automatically bankrupt because you file, although joint debts, co-signed obligations and jointly owned property require review. A home or vehicle with little or no realizable equity may sometimes be retained if secured payments remain current. Self-employed individuals may often continue operating, subject to the trustee's guidance.

How long does bankruptcy last?

A first bankruptcy may be eligible for automatic discharge after nine months when there is no surplus-income obligation. Where income exceeds the applicable threshold, the minimum period can extend to 21 months. Other circumstances can change the timeline, so your trustee will explain the duties and expected discharge date.

Rebuilding credit after bankruptcy

Credit recovery begins with a stable budget and reliable payment history. Many people can make meaningful progress within 12 to 24 months, although results vary. The goal is not to rush into borrowing, but to use new credit carefully and consistently.

• Review your post-bankruptcy budget and emergency savings
• Open an appropriate secured or low-limit credit account when ready
• Pay every bill on time
• Keep revolving balances below 30% of available limits
• Check credit reports for accurate discharge information