Who will know I’ve filed for Bankruptcy?

Many Canadians are struggling to keep up with debt payments as the high cost of living and economic uncertainty weigh on households. While you might feel alone in this situation, many others are also struggling with missed payments, calls from creditors, and financial stress — and are searching for a way to regain control of their finances. 

You may be considering filing for Bankruptcy to gain a fresh financial start. However, you probably have many questions about the process, such as who will be informed about this? Who else will know? This is a completely normal and valid concern — and in most cases, that information will remain confidential. However, there are certain people and organizations who will be notified depending on your specific circumstances.

Who is informed about your Bankruptcy

Specific individuals, agencies, and organizations will be notified as soon as you declare Bankruptcy, including:

• The Office of the Superintendent of Bankruptcy (OSB) — The OSB is a federal agency that provides oversight on all Bankruptcies in Canada. When you file for Bankruptcy, the OSB adds your file to its public records. While your Bankruptcy will be recorded in these public records, it is highly unlikely that many people will see it because it’s mostly accessed by financial institutions or industry professionals. The OSB sends this list of Bankruptcies to credit bureaus to be noted on the credit history of consumers.
• Creditors — Organizations or individuals you owe money to will be made aware of your Bankruptcy filing.
• Licensed Insolvency Trustees (LITs) — These are the only federally regulated professionals able to administer all debt relief solutions, including Consumer Proposals and Bankruptcy. This individual will help guide you through the debt management and Bankruptcy process and act as the go-between for you and your creditors.

What about my employer?

Many people are worried that they may need to inform their employer about their Bankruptcy. Additionally, if you are currently searching for a job, you may be concerned that you will need to disclose your Bankruptcy to a potential employer.

In most cases, your current or employer will not be informed about your Bankruptcy. Additionally, you have no obligation to disclose that you have filed for Bankruptcy to prospective employers if they do not ask you directly.

However, there are a few specific situations where your employer will be informed, including:

• Wage garnishment — Bankruptcy stops the garnishment of your wages, with the exception of garnishments for support payments. Your employer will be informed if your wages are currently being garnished and the Bankruptcy ends this garnishment.
• Credit check — Your Bankruptcy may be revealed if your job requires a credit check.
• Bonded professions — A Bankruptcy can affect your employment if you work in a profession that requires you to be bonded. This typically includes accountants, lawyers, or insurance and investment brokers. If you are a bonded employee, you are obligated to disclose whether you are currently Bankrupt or have filed for Bankruptcy previously.

Who else will find out about my Bankruptcy?

You may be concerned that others — such as your family and friends — will find out about your Bankruptcy.

Here are some situations where others may find out about your Bankruptcy:

• Family and friends — In most situations, your family and friends will not find out that you have filed for Bankruptcy unless you tell them. However, if they are listed as one of your creditors, they will receive a notification about your Bankruptcy.
• Your bank — Any financial institution, such as banks or lenders, will see your Bankruptcy listed on your credit report when they consult your file. Bankruptcy typically takes around six years to not show up on your credit report anymore after you have been discharged.

How an LIT can help you achieve a debt-free future

Don’t hesitate to reach out for support if you are struggling with debt or financial stress. If you are considering filing for Bankruptcy, it is important to keep in mind that it isn’t as public as you may believe it to be. No one will find out, apart from the individuals and organizations involved, unless you share it with them.

MNP LITs can provide you with support and guidance if you are thinking about declaring Bankruptcy. We can help you understand your options, choose the solution that works best for your specific situation, and provide support as you work toward a debt-free future.