Five Steps To Accessing Canadas Bankruptcy Assistance Program

2016-10-25   minute read

Mary Plahouras


One of the goals of the Bankruptcy Assistance Program (BAP), is to ensure low income consumer debtors who need a reduction in the typical fees of a Licensed Insolvency Trustee (“Trustee”) in order to file a bankruptcy can access the BAP, which is administered by the Office of the Superintendent of Bankruptcy Canada (OSB). Although most debtors are judgement proof and may generally escape bankruptcy, the fact remains that bankruptcy is often their only realistic option in dealing with collection calls and legal threats and likely their only viable means of discharging their unsecured debts in order to obtain a fresh financial start.

Person calculating their debt on a calculator and laptop with paper spreadsheets on the desk

The BAP was designed with a view to making access to bankruptcy affordable for the debtor who cannot afford to pay the typical fees of the Trustee. Many debtors who live below the Statistics Canada Low Income Cut-Off face a multitude of socio-economic and personal issues. They may be unemployed, low wage earners, recipients of government assistance, pensioners, have no realizable assets which they can redeem to pay off their debts, have physical and / or mental health issues, are burdened with the high costs of medical expenses and do not have family or friends to assist them, as needed. As a result, they cannot afford to pay the typical fees of the Trustee in order to file a bankruptcy.

The OSB intended for the BAP to work in a way that permits a debtor who has insufficient funds to cover the cost of a bankruptcy in Canada to have access to the Canadian bankruptcy system. Notwithstanding that, a BAP filing does not generate monetary value to the bankruptcy estate for the purpose of calculating the fees and disbursements of the Trustee, Trustees throughout Canada are very understanding of the financial hardship that debtors face and have shown a compassionate interest in participating and administering a BAP file at a reduced fee resulting in a long list of Trustees willing to offer their services to BAP applicants. Although the BAP is not a fee free service and there is currently no country or province-wide standard fee, BAP fees can be negotiated and are lower than the typical fees a Trustee would charge a non-BAP applicant. In administering a BAP file, the Trustee will review the BAP applicant’s budget, employment, personal and family situation in an effort to arrive at a mutually agreed upon amount to be paid by the BAP applicant.

Steps to Accessing the BAP

A debtor needing to access the BAP and retain the services of a Trustee should start by:

  • Reading the OSB’s literature on the BAP which can be found on the OSB’s website.
  • Contacting the OSB to request a BAP Registration Form and a list of Trustees participating in the BAP, in the locality of the debtor.
  • Contacting two Trustees from the OSB’s list and scheduling a meeting with each of the two Trustees for an assessment and to obtain the Trustee’s signature attesting to the debtor’s inability to pay the Trustee’s typical fees, as a condition of eligibility to the BAP. It should be noted, remote assessments are also possible and the Trustee can discuss this option and its requirements with the debtor.
  • Submitting the completed BAP Registration Form signed by two Trustees to the OSB. The OSB will review the information and if warranted, designate a Trustee for the debtor in the locality of the debtor.
  • Attending the designated Trustee’s office to execute the bankruptcy documents.

The OSB has full discretion to designate any licensed insolvency Trustee to act as Trustee of the debtor’s estate, including a Trustee whom the debtor did not meet with for the assessment.

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