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Question:
APR 17, 2012

Learn about the Canada BIA

I am a Canadian residing in the US. Can I file for bankruptcy in Canada even though I live in the USA?

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Bill's Answer: Bills.com Resident Expert

To learn about bankruptcy in Canada, start with the Office of the Superintendent of Bankruptcy Canada home page. The key resource for you is the declaring bankruptcy page, which outlines the steps a debtor needs to take to file for bankruptcy in Canada. If you are a debtor, be sure to review the resources for debtors page.

The Canada Revenue Agency Bankruptcy page and the Bankruptcy Assistance Program are also good resources.

In Canada, the Bankruptcy and Insolvency Act (R.S., 1985, c. B-3) covers the law of bankruptcy. The BIA makes references to foreign corporations filing for bankruptcy, but I could find no laws concerning a requirement for a private person to be residing in Canada as a condition of filing bankruptcy. I hasten to add that I am not a Canadian lawyer, and you should consult with a Canadian lawyer who has experience in bankruptcy for a more precise answer.

To learn more about the relationship between US and Canadian credit reports, see the Bills.com resource Canada Credit Report.

I hope this information helps you Find. Learn & Save.

Best,

Bill

www.bills.com/

Comments (12)


Moe S.
April 17, 2012
Thank you so much for these excellent responses. I was going to ask a question about bankruptcy, but everything that I needed was covered in the links provided and in the comments. Thanks again!
Beth K.
November 09, 2011
I am in the opposite situation. I owe about 20K credit card debt. I am a born Canadian citizen, naturalized American, living in Canada, with no plans to return to the USA soon. Can I file for bankruptcy in the USA, and will that affect my credit and credit cards in Canada? Thanks!
Bills.com
November 09, 2011
You do not need to be present in the US to file US bankruptcy.

You will, however, need to tell the court your address in documents you swear are accurate. It is unclear to me if Canadian consumer credit reporting agencies (credit bureaus) pay any attention to US public records. If they do, then your US bankruptcy may impact your credit report and credit score in Canada. If they ignore US public records, or otherwise never learn of your bankruptcy, then the US bankruptcy will have no impact on your Canadian credit score.
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Bills.com
March 23, 2010
Thanks for sharing Ira.
Ira S.
March 23, 2010
I am a Canadian trustee in bankruptcy in Toronto. Anyone who files for bankruptcy in Canada must make full disclosure of assets and liabilities, wherever they may be situated in the world. As well, the Canadian Bankruptcy Act states that the debtor must file in their locality. In your case locality is defined as where in Canada you have lived for the past year (which is N/A) or where the majority of your assets are (which again the answer is probably the US). If you don't have assets in Canada and are not planning on coming back soon and the Canadian creditors are not bothering you in the US, then, "don't worry, be happy".
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Michael K.
Chicago, IL  |  March 01, 2011
There seem to be differing views on the severity of consequences when defaulting on Canadian credit card debt after leaving the country. I am a EU citizen, lived in Canada for a while, and moved to the US in 2007. I still have approx. Ca$40,000.- debt (3 cc, 1 line of credit, all unsecured) in Canada. I have no assets in Canada, and am not planning on living there again in the near future. I have made payments every month, but find it difficult to maintain my payments. If I stop making payments, I assume I will get lots of calls etc. After that, will any judgement against me in Canada domesticated in the US (I am in Illinois); i.e. will they garnish my assets here in the US? How likely is that for a debt of $40,000 ($20,000 + $9000 + $8000 + $1500 for the 4 accounts). Thank you for your help!
Bills.com
March 01, 2011
Michael, I recommend that you speak with a bankruptcy attorney based in Canada, to find out what options you have for discharging the Canadian debt. Speak with a bankruptcy attorney in the USA who has experience in dealing with clients with non-US debt to understand your options for dealing with the debt within the US system and for protecting your wages from garnishment. Regarding the probability of the creditors domesticating the debt, that is difficult for anyone but the creditors to say. My rule of thumb is, the bigger the debt the greater the probability of domesticating the debt.
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Denis L.
Orlando, FL  |  July 19, 2011
Michael, I'm on the exact same situation. Moved out from Canada (to US) but still owe approximately 75k in Canada. No assets in Canada - and no plans of living there in the future. I'm still making payments, but finding it very difficult on the past few months. Let me know if you got any other advice. Tks!
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Michael K.
Chicago, IL  |  December 31, 2011
Dennis, did you get any more information regarding this problem? Would be great to hear from people that actually stopped making payment, and hear their experiences!
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Bills.com
March 20, 2010
Thank you for your insights.
Douglas H.
March 20, 2010
I am a bankruptcy trustee in Canada, and one of the editors of bankruptcy-canada.ca. It is possible to file a Canadian bankruptcy while living in the United States. However, that is generally not the recommended course of action, for a number of reasons. First, if you are living in the United States, it would be difficult for your Canadian creditors to pursue you and obtain a judgment in the U.S. Since you are not currently working, it's obviously impossible for them to obtain a wage garnishment. Second, to file bankruptcy in Canada you first personally meet with a bankruptcy trustee to be assessed, and while bankrupt in Canada you are required to attend two credit counseling sessions, and possibly attend a creditors meeting and a court discharge hearing. This may involve multiple return trips to Canada during your bankruptcy, which may be more trouble than it's worth. In most cases the best approach is to wait until you return to Canada, and at that point consider your options.
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Michael K.
Chicago, IL  |  December 31, 2011
Douglas, do you have any experience regarding the likelihoods of a Canadian bank to obtain a judgement against me while I live in the US? I assume the amount owed plays a big role, is there a cutoff below which banks frequently do not follow up? (My CC debts are $20,000 with one bank, and $8,000 and $9000 with two others). If the banks obtain a judgement, how likely is a domestication in the US?
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