Best Bankruptcy Lawyers in Ontario

In all cases, engaging a qualified professional-solicitor, attorney, or licensed insolvency trustee-helps ensure you understand the process, meet deadlines, and protect your legal rights. You can discuss fees, timelines, and expectations during a formal consultation.

3. Local Laws Overview

The Ontario insolvency landscape rests on three central laws and regulatory structures. Here are the names you should know, along with how they apply in practice.

Bankruptcy and Insolvency Act (BIA) - Federal statute that governs personal bankruptcies, consumer proposals, and corporate insolvencies across Canada. It provides the framework for filing, discharge, and the treatment of assets and debts. The Act has been amended multiple times, and its current text is available on the Justice Laws Website.

Companies' Creditors Arrangement Act (CCAA) - Federal statute used primarily for large corporate insolvencies requiring court-supervised restructuring. While most Ontario consumers use the BIA, large businesses may pursue a CCAA process to restructure while continuing operations. The text is publicly accessible via the Laws website.

Income Tax Act (Canada) and CRA guidance - The Income Tax Act interacts with bankruptcy in important ways. Tax debts may be provable in bankruptcy in certain circumstances, but some tax obligations can be non-dischargeable or subject to special rules. The Canada Revenue Agency (CRA) and related guidance inform how tax matters are treated within insolvency proceedings.

Notes on Ontario practice - While Ontario courts may supervise related disputes, the actual insolvency process is driven by federal law and administered by licensed insolvency trustees (LITs). Ontario residents should expect to work with an LIT to file and manage a bankruptcy or consumer proposal under the BIA.

Recent trends include ongoing updates to consumer proposal procedures and enhanced digital processes in insolvency administration, as outlined by the Office of the Superintendent of Bankruptcy Canada. See the official sources for the latest practice notes and regulatory updates.

Official sources emphasize that bankruptcy and insolvency in Canada are federal matters administered by licensed professionals under the BIA.

4. Frequently Asked Questions

What is the Bankruptcy and Insolvency Act in Canada?

The BIA is a federal statute governing personal bankruptcies, consumer proposals, and corporate insolvencies across Canada. It sets rules on filing, discharge, asset exemptions, and creditor rights. The current text is available on the Justice Laws Website.

How do I start a bankruptcy in Ontario?

Contact a Licensed Insolvency Trustee (LIT). You must file through an LIT who will assess your debts, assets, and income, and explain options such as bankruptcy or a consumer proposal. An LIT administers the process and negotiates with creditors.

What is a consumer proposal and how does it work?

A consumer proposal is a formal repayment plan accepted by creditors and approved by the court. It allows you to repay a portion of your debt over time while potentially avoiding bankruptcy. The LIT facilitates the proposal and oversees compliance.

Do I need a lawyer to file for bankruptcy in Ontario?

You typically work with an LIT rather than a traditional lawyer for filing. A solicitor can provide legal advice on complex issues such as exemptions, property disputes, or cross-border concerns.

How much does a licensed insolvency trustee cost?

Costs vary by complexity, location, and the services required. An initial consultation often has a set fee or can be provided as part of the service; ongoing administration fees are disclosed by the LIT in writing.

How long does bankruptcy or a consumer proposal take?

Bankruptcy durations vary by assets and income; a typical first-time bankruptcy without assets may last several months to a year. Consumer proposals usually range from 3 to 5 years, depending on the payment plan.

Do I qualify for bankruptcy protection in Ontario?

Qualification depends on your debts, income, assets, and whether you have previously filed. An LIT can determine eligibility and explain alternatives if bankruptcy is not appropriate.

What is the difference between bankruptcy and a consumer proposal?

Bankruptcy cancels most debts after discharge, but may require surrendering assets. A consumer proposal repays a portion of debt over time and can protect certain assets. Both are governed by the BIA and administered by an LIT.

Can I keep my house or car if I file bankruptcy?

Exemptions determine what you can keep. Some assets may be protected, while others may be sold to repay creditors. An LIT explains which exemptions apply in your situation.

Is tax debt discharged in bankruptcy?

Some tax debts may be discharged, while others may not. The CRA has specific rules about non-dischargeable taxes and priority claims. An LIT or solicitor can map out tax outcomes for you.

How are assets and exemptions determined in Ontario?

Exemptions are governed by federal and provincial rules, and can depend on your family status and income. Your LIT will review assets and advise on what is exempt before filing.

Do I need to worry about debts to the CRA in bankruptcy?

Tax debts have special treatment in insolvency. Some tax liabilities may be discharged, while others require ongoing arrangements with the CRA. Consult an insolvency professional for specifics.

5. Additional Resources

Useful official resources provide authoritative guidance on bankruptcy in Ontario and across Canada. These organizations help with legislation, regulatory oversight, and official procedures.

• Office of the Superintendent of Bankruptcy Canada (OSB) - Regulates insolvency professionals, administers bankruptcy and consumer proposals, and publishes policy guidance. Official site: ic.gc.ca OSB.
• Bankruptcy and Insolvency Act (BIA) and Companies' Creditors Arrangement Act (CCAA) - Federal statutes governing insolvency processes. Texts available via the Government of Canada Laws Website: BIA and CCAA.
• Canada Revenue Agency (CRA) - Federal tax authority with guidance on tax debts within insolvency and interactions with bankruptcy proceedings. Official site: CRA.

Official resources provide the most accurate, up-to-date information on eligibility, procedures, and interacting with creditors during insolvency.

6. Next Steps

1. Gather all debt statements, asset information, income details, and recent credit reports to prepare for an initial consultation.
2. Decide whether you want to pursue a bankruptcy or a consumer proposal, and consider whether restructuring could be a better fit for you.
3. Identify a Licensed Insolvency Trustee (LIT) in Ontario and schedule a consultation to review your options.
4. Prepare a list of questions for the LIT covering fees, timelines, asset exemptions, and potential outcomes.
5. Obtain a written engagement letter from the LIT outlining services, costs, and confidentiality terms.
6. Compare at least two or three LITs or solicitors to ensure you have a clear understanding of costs and support.
7. Begin the chosen process, and monitor deadlines closely with your counsel to ensure compliance and timely discharge or proposal approval.