If you have a lot of debt and have trouble paying it off, you may file for bankruptcy.
To do this:
- you sign over your assets to a licensed insolvency trustee except those exempt by law such as household goods and clothing; and
- the licensed insolvency trustee will sell your assets and use the funds to settle your debt.
Personal bankruptcy falls under federal law, the Bankruptcy & Insolvency Act.
Bankruptcy can affect your credit rating because it stays on your record for a number of years. This depends on if you are a first-time bankrupt or if you have previously filed for bankruptcy.
Who can file for bankruptcy?
You may file for bankruptcy if you've lived or done business in Canada in the last year and you are "insolvent", meaning:
- you owe at least $1,000; and
- you are not able to pay your debts.
Will all of your debt be forgiven?
Debt is divided into two types: secured and unsecured.
Secured debt is tied to assets like mortgages or car loans. If you miss payments, the lender can take possession of the asset. Bankruptcy doesn’t wipe out secured debts. It’s important to know that for many people, property and vehicles are their most valuable possessions.
The value of exempted items determines whether you can keep an item and establishes how much money you keep if the item is seized and sold during bankruptcy.
Unsecured debts, like credit card debt, are released partially or completely during bankruptcy.
Child support payments are never forgiven during bankruptcy.
How long does bankruptcy last?
It depends on your circumstances. It can be as little as 9 months if you are a first-time bankrupt.
What is exempt from the bankruptcy process?
Items exempted without limits are:
- medical equipment; and
- social assistance payments.
Items exempted with limits include:
- one personal vehicle;
- tools necessary for work; and
- equipment used for hunting, trapping or fishing.
Get started
If you decide to file for bankruptcy, the process must be handled by a licensed insolvency trustee.
Select a trustee who is licensed to practice in the Yukon. Look at the list of licensed insolvency trustees. You can also look in the Yellow Pages of your phone directory under "Bankruptcies — Trustees" for the Yukon. Since trustees are located outside of the Yukon, they accept collect calls.
For further information on bankruptcy, contact the Yukon Registrar in Bankruptcy.
In person: Court Services, The Law Courts, 2134 2nd Avenue (ground floor) in Whitehorse. Our office is open Monday through Friday from 9 a.m. to 4 p.m.
Email: courtservices@yukon.ca
Phone: 867-667-5938 or toll free in the Yukon 1-800-661-0408, extension 5938
You can also visit the federal Office of the Superintendent of Bankruptcy.