Bankruptcy and living abroad

I am a Canadian citizen and I live abroad.  I have Canadian debts that I am unable to pay.  Can I go bankrupt or file a proposal in Canada?

Yes you can.  There are a number of ways you can deal with your Canadian debt.

You can re-establish residency in Canada and then go bankrupt or file a proposal in Canada.

You can either go bankrupt or file a proposal under Canadian law while still living in that foreign country provided that:

  • You have property in Canada (re: definition of “insolvent person”). “Property” includes money, goods, choses in action (lawsuits), land and every description of property, whether real or personal, legal or equitable;

And/Or

  • You have carried on business in Canada in the preceding year (re: definition of “insolvent person” and definition of “locality of a debtor”).

Note:  The Trustee will have to get permission from the Office of the Superintendent of Bankruptcy for the debtor to go bankrupt without the person coming back to Canada.

You will need to disclose all of your worldwide assets and debts in a statement to your creditors.

You can also initiate an insolvency proceeding in the country of residence provided that country’s laws allow it.  This will free you of your Canadian debts so long as continue to live in that foreign country.  It does not get rid of the debt in Canada.  If you return to Canada, your Canadian debts will have survived and you will still owe that money.

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