Can I file for bankruptcy in Canada if I’m living abroad?

Financial troubles don’t end at borders—or even oceans. If you’re a Canadian citizen no longer living in the country, and you still have debts in Canada that you are unable to pay, you may be wondering whether or not you can file for bankruptcy. The answer is that it depends, but the rules are actually pretty straightforward.

The simplest way to file for bankruptcy is to re-establish your residency in Canada (move back to the country) in order to do so. Once you’ve filed your bankruptcy papers, you’re free to leave again, but you must keep your trustee informed about where you will be living. If you prefer to remain outside the country, you may file for bankruptcy if:

  1. You’ve carried on business in Canada within the year preceding bankruptcy.
  2. You have resided for the previous 12 months in Canada.
  3. OR if the majority of your property is located in Canada (property can include money held in a Canadian banking institution, real estate, things or goods, and lawsuits).

Even if you’re living in another country when you file for Canadian bankruptcy, you will still be subject to all the rules and regulations under the Canadian Bankruptcy and Insolvency Act. Specifically, you must:

  1. Make sure your trustee has up-to-date contact information for you.
  2. Declare all your assets, even those held outside of Canada. Depending on the laws of the country where those assets are located, your trustee may be required to seize the assets and sell them for the benefit of your creditors.
  3. Declare all of your liabilities, whether the debt is owed in Canada or not.
  4. Arrange to attend your two mandatory counselling sessions and any meetings of creditors.

For more information about how Canadian bankruptcy laws may affect you if you’re no longer living in the country, call one of our insolvency experts today for your free, no-obligation consultation: in Ottawa call 613-237-5555; out of town, call toll-free 1-800-517-9926 or book online.

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