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Filing for Bankruptcy in Alberta

Filing for bankruptcy in Alberta is something many Canadians think they have to undergo. Although the recent economic downturn exacerbated the problem of debtors being unable to pay their debts, the truth of the matter is that there are always people in Canada who find themselves in over their heads when it comes to what they owe their creditors. From mortgages to student loans to credit cards, some residents find themselves in a situation they never anticipated—they cannot keep up with their bills.

Average consumer debt levels in Alberta are the highest in the country with Calgary and Edmonton leading the way. Non-mortgage consumer debt in Alberta hit $29,117 in Q1 of 2019, an increase of 3.4% from 2018. Because of these high-debt loads, bankruptcies in the province are up 13.5% over 2018 with Alberta the only other province to see a significant increase in the rate of bankruptcies.

When residents of Alberta are having trouble fulfilling their obligations to their creditors, there are many ways they can address the problem. Debt consolidation loans, debt settlement, credit counselling, and consumer proposals are all viable options for reducing the amount of principal you owe, as well as your average interest rate, thereby making it easy for you to meet your monthly debt payments. Sometimes, however, Albertans still have financial difficulties even after attempting all of the aforementioned debt solutions. In such cases, filing for bankruptcy in Alberta becomes a viable answer to one’s debt problems.

Information on Filing for Bankruptcy in Alberta

Personal Bankruptcy is unique among other Canadian debt solutions in that it effectively wipes your record clean of most debts and enables you to restart your finances from a position of strength when it comes to what you owe. Once a bankruptcy is discharged, you no longer owe your creditors anything, with a few exceptions. To put it most simply, your debts to creditors who have extended you unsecured loans will be eliminated, though you will likely be responsible to pay secured debts such as a mortgage.

You can start filing for bankruptcy in Alberta if you have unsecured debt totalling at least $1,000, though it is advisable that you owe much more before you consider bankruptcy. Alberta residents file for bankruptcy consideration via a licensed bankruptcy trustee. That trustee then administers your property in a trust, paying various creditors at least some of what you owe until the court grants a discharge. You will effectively turn over your belongings and funds, with some exceptions, to the trustee so that your creditors do not totally lose out on your bankruptcy filing.

Insolvency & Bankruptcy Statistics in Alberta

  Alberta Nationwide
  Insolvency Bankruptcy Insolvency Bankruptcy
Q2 2022 3,929 640 25,286 6,510
Q1 2022 3,483 587 23,153 5,975
Q4 2021 3,457 651 22,999 7,071
Q3 2021 3,268 598 21,649 6,740
Q2 2021 3,706 769 23,497 7,801
Q1 2021 3,632 781 23,824 7,320
Q4 2020 3,228 860 23,364 7,855
Q3 2020 2,779 795 20,692 7,162
Q2 2020 2,726 741 19,151 6,410
Q1 2020 4,296 1,206 33,212 11,443
Q4 2019 4,286 1,369 35,139 13,526
Q3 2019 4,215 1,396 34,690 13,753

Source: https://www.ic.gc.ca/

Bankruptcy rates are back on the rise after falling in 2018. During 2019, the number of filings for personal bankruptcy totalled a little over 400 per month on average. That is a 13.5% increase from the previous year. These numbers dropped at the start of 2020 indicating that Albertans are finding more success with other debt solutions such as debt settlement programs that are available to the public.

Alberta Bankruptcy Pros and Cons

Before filing for bankruptcy, you should be aware of the major pros and cons associated with this debt solution. The most obvious advantage is that most of your debts are eliminated in bankruptcy. Alberta residents also enjoy peace after a bankruptcy is discharged because debt collectors can no longer hound you for debts written off in the bankruptcy process.

On the other hand, a significant drawback to personal bankruptcy is that it negatively impacts your credit for around 7 years (and in some cases up to 14!). In fact, you will find it difficult to get new loans and other extensions of credit during those seven years if you file for bankruptcy. A bankruptcy will also leave you with very few personal belongings. For example, a bankruptcy only allows you to keep clothing and other basic items beyond the bare essentials if such things are necessary for employment. You will also have to surrender your car if it is worth more than $5,000. Other exemptions apply. Finally, filing for bankruptcy in Alberta does not eliminate all of your debt. You will still have to pay alimony, your mortgage and student loans if it has been less than seven years since you attended classes.

Is There a Better Option?

Many people are filing for Bankruptcy in Alberta too hastily and miss out on other debt solutions that are not nearly as destructive to their credit. Fill out the debt relief form for more information about the options you have available to you.

Annual Consumer Insolvency Rates in Alberta

(Per 1,000 Population Aged 18 Years and Older)

Alberta
  ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21
Insolvency 3.1 2.7 2.6 3.1 4.0 4.0 4.4 4.9 3.8 3.9
Bankruptcy 2.0 1.5 1.2 1.3 1.7 1.5 1.5 1.7 1.1 0.8
Proposal 1.2 1.2 1.4 1.7 2.4 2.5 2.9 3.3 2.8 3.2
Lethbridge – Medicine Hat
Insolvency 3.6 3.5 3.8 4.4 5.3 4.2 5.0 5.8 4.4 4.4
Bankruptcy 2.4 2.2 1.7 1.9 2.2 1.7 1.7 1.8 1.0 0.8
Proposal 1.3 1.3 2.1 2.5 3.1 2.5 3.3 4.0 3.5 3.6
Camrose – Drumheller
Insolvency 2.8 2.0 2.1 2.9 3.9 3.7 3.3 4.0 3.1 4.0
Bankruptcy 1.9 1.4 1.1 1.5 2.0 1.7 1.4 1.5 1.3 1.0
Proposal 0.9 0.7 1.0 1.4 1.9 2.0 1.9 2.5 1.9 3.0
Calgary
Insolvency 3.4 2.8 2.6 3.0 3.8 4.0 4.3 4.7 3.5 3.4
Bankruptcy 2.2 1.6 1.2 1.2 1.4 1.4 1.5 1.7 1.0 0.7
Proposal 1.2 1.2 1.5 1.8 2.5 2.6 2.8 3.0 2.5 2.7
Red Deer
Insolvency 3.2 3.5 3.6 4.6 6.4 5.1 5.4 6.5 5.1 5.4
Bankruptcy 1.8 1.9 1.6 1.8 2.5 2.0 1.7 2.0 1.4 0.9
Proposal 1.4 1.6 1.9 2.9 3.9 3.1 3.7 4.6 3.7 4.5
Edmonton
Insolvency 3.0 2.7 2.5 2.7 3.7 4.1 4.4 5.0 3.9 3.9
Bankruptcy 1.7 1.4 1.2 1.2 1.6 1.5 1.4 1.6 1.0 0.7
Proposal 1.3 1.3 1.3 1.5 2.1 2.6 3.0 3.4 2.9 3.2
Wood Buffalo – Cold Lake
Insolvency 1.9 1.4 3.1 3.1 3.0 3.5 4.9 6.4 5.2 6.0
Bankruptcy 1.1 0.7 1.7 1.5 1.5 1.4 1.8 2.0 1.5 0.9
Proposal 0.8 0.7 1.4 1.6 1.5 2.0 3.2 4.4 3.8 5.2
Banff – Jasper – Rocky Mountain House and Athabasca – Grande Prairie – Peace River
Insolvency     2.4 2.9 4.4 3.7 3.8 4.3 3.5 4.4
Bankruptcy     1.3 1.5 2.1 1.7 1.5 1.6 1.1 0.8
Proposal     1.1 1.3 2.3 2.0 2.4 2.7 2.4 3.6

Source: https://www.ic.gc.ca/

Are you considering filing for Bankruptcy in Alberta?

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