Cost of Bankruptcy in Cambridge, Ontario

The most common question I am asked when I meet with someone for the first time in my Cambridge office is “what does it cost to file bankruptcy in Cambridge?” The answer is different for everyone. Here’s what I’ll tell you when we meet:

Douglas Hoyes, Cambridge Bankruptcy Trustee

First, bankruptcy may not be the correct option for you. Over half of the filings I do in Cambridge are consumer proposals, so I’ll explain how a consumer proposal works, and that may allow you to avoid bankruptcy entirely, so the cost of a bankruptcy may not be relevant in your case.

As for the cost of bankruptcy, there are three components:

  • a base contribution;
  • surplus income
  • asset repurchases.

1 In all bankruptcies a base contribution to cover the administrative costs of the bankruptcy is required. This will typically be $190 per month for a minimum of nine months, but it could be a higher number if your case is complex.

2 Next, you are required to make surplus income payments based on your income each month. You are required to send us proof of your income each month (such as copies of your pay stubs), and if your income is over the surplus income limit set by the government, you are required to make extra payments. This calculation is somewhat complicated, so I suggest you call the office at (519) 622-3773 and book a meeting with me or one of my team, and we can do the specific calculation that will apply in your case. If you want to try the calculation on your own, you can read this description of surplus income, and then you can use this surplus income worksheet to do the calculations. (You will find that it’s easier to let us do the calculations for you).

3 Finally, if you own any assets that are not exempt and you want to keep them in a bankruptcy, you will be required to make asset repurchase payments during your bankruptcy. For example, if you go bankrupt in Ontario you lose all contributions you have made to an RRSP in the last 12 months. If you want keep your RRSP, you would be required to pay that amount back during your bankruptcy. For a detailed list of what you get to keep if you go bankrupt you can refer to this list of bankruptcy exemptions in Ontario. In addition, in a bankruptcy you lose your tax refund, and possibly your HST credits, which increases the cost of bankruptcy.  Again, this is somewhat complicated, so a personal consultation with us is the simplest way to determine if any asset repurchases will be required.

In many cases when we explain the costs of a bankruptcy the decision is often made to avoid bankruptcy by filing a consumer proposal. We will also explain the costs of a consumer proposal so you can make an informed decision. Here’s a good summary of the differences between bankruptcy and consumer proposals.

To find out the costs of a bankruptcy or a consumer proposal for you, please call my office in Cambridge at (519) 622-3773 to discuss your situation over the phone , or e-mail me your questions or to set up a no-charge initial consultation.