Bankruptcy in BC
Legal discharge of many debts when other options are not workable.
- Automatic “Stay of Proceedings”
- A fresh start
- Stress relief
- Quick solution to being debt-free
- Inexpensive
Published Updated
- Reduces what you owe Yes, discharged
- Legal protection Yes
- Who provides it Licensed Insolvency Trustee only
Bankruptcy in BC is not uncommon, despite it being one of the wealthiest provinces in Canada. Per capita income levels are higher than the national average. The higher average income helps explain why BC residents are paying off their debt faster than the rest of the country. While average non-mortgage debt is on the rise across the country, the west of Canada and Vancouver in particular, seem to be the hardest hit. Statistics Canada reports that in Q2 of 2022 the average non-mortgage debt amount was $57,451 in British Columbia. Between 2021 and 2022 BC saw bankruptcy rates across the province fall and filings are much lower than in Ontario and Alberta.
The Basics of a Bankruptcy in BC
Bankruptcy in Canada is designed to help individuals who have no reasonable chance of paying off unsecured debts such as credit cards and installment loans. The Bankruptcy and Insolvency Act of 1985, which is periodically revised and updated, governs bankruptcy in British Columbia and the rest of the country. According to this law, a person who owes at least $1,000 to his or her creditors is eligible to file for bankruptcy. BC residents who end up filing for bankruptcy, however, usually owe a lot more (The average liabilities of a resident filing for bankruptcy is $152,340 in BC).
You file for bankruptcy in British Columbia through a licensed bankruptcy trustee, who administers your personal property through a trust to settle debts with creditors. Essentially, the trustee’s job is to make sure that your creditors get as much of what you owe them as possible. This means that while a bankruptcy erases your debts, you will often have to surrender at least some property in the process. Proceeds from the sale of your property are distributed to your creditors, and sometimes even the property itself is handed over. However, when you file for bankruptcy in BC, there are property exemptions that allow you to keep at least some of what you own. The bankruptcy process typically lasts no more than nine months. If you abide by the bankruptcy agreement during that period, your trustee will recommend a discharge that erases your unsecured debts.
Insolvency & Bankruptcy Statistics in British Columbia
- Insolvency
- Bankruptcy
See the numbers
| Quarter | Insolvency | Bankruptcy |
|---|---|---|
| Q1 '21 | 2,218 | 612 |
| Q2 '21 | 2,316 | 612 |
| Q3 '21 | 2,078 | 502 |
| Q4 '21 | 2,139 | 481 |
| Q1 '22 | 2,292 | 448 |
| Q2 '22 | 2,477 | 465 |
| Q3 '22 | 2,668 | 442 |
| Q4 '22 | 2,730 | 466 |
| Q1 '23 | 3,003 | 497 |
| Q2 '23 | 3,323 | 534 |
| Q3 '23 | 3,172 | 455 |
| Q4 '23 | 3,398 | 536 |
| Q1 '24 | 3,535 | 533 |
| Q2 '24 | 3,546 | 569 |
| Q3 '24 | 3,343 | 585 |
| Q4 '24 | 3,441 | 552 |
| Q1 '25 | 3,644 | 515 |
| Q2 '25 | 3,794 | 648 |
| Q3 '25 | 3,993 | 659 |
| Q4 '25 | 3,900 | 605 |
| Q1 '26 | 4,234 | 568 |
Source: ic.gc.ca
- Insolvency
- Bankruptcy
See the numbers
| Quarter | Insolvency | Bankruptcy |
|---|---|---|
| Q1 '21 | 23,824 | 7,320 |
| Q2 '21 | 23,497 | 7,801 |
| Q3 '21 | 21,649 | 6,740 |
| Q4 '21 | 22,999 | 7,071 |
| Q1 '22 | 23,153 | 5,975 |
| Q2 '22 | 25,286 | 6,510 |
| Q3 '22 | 25,860 | 6,281 |
| Q4 '22 | 25,885 | 5,820 |
| Q1 '23 | 29,725 | 6,265 |
| Q2 '23 | 31,224 | 6,945 |
| Q3 '23 | 30,471 | 6,428 |
| Q4 '23 | 31,813 | 6,578 |
| Q1 '24 | 33,885 | 6,849 |
| Q2 '24 | 35,082 | 7,745 |
| Q3 '24 | 34,588 | 7,247 |
| Q4 '24 | 33,740 | 7,199 |
| Q1 '25 | 34,225 | 6,984 |
| Q2 '25 | 35,114 | 7,800 |
| Q3 '25 | 36,256 | 7,787 |
| Q4 '25 | 34,862 | 7,718 |
| Q1 '26 | 37,121 | 7,576 |
Source: ic.gc.ca
Pros and Cons of the BC Bankruptcy
For many people, bankruptcy in BC seems like the perfect solution. If there is no other way to get out of debt, bankruptcy releases you from your obligations and allows you to start over financially without losing everything. Bankruptcy also enables you to get financial counselling to help you avoid similar problems in the future. Moreover, debt collectors are legally required to stop contacting you once you file for bankruptcy.
On the other hand, there are many reasons why you should pause before you file for bankruptcy. BC residents see their credit suffer for seven years (and in some cases up to 14) after a bankruptcy is discharged, making it difficult to get new loans and the most affordable rent, mortgage, and interest charges. A bankruptcy will also force you to surrender a great deal of your property. Unless other arrangements are made, you will have to surrender:
• vehicle equity over $5,000
• home equity over $12,000 in Vancouver and Victoria, and $9,000 elsewhere in British Columbia
• the value of household items such as furniture minus $4,000
• equity in tools of your trade worth over $10,000
Learning More about Bankruptcy in BC
Choosing a personal bankruptcy in BC is the option of last resort, and you should learn about the other options available to you before applying. Speak to us on a free confidential call for some useful information on debt management and declaring bankruptcy. Or fill out the Canadian debt relief form for more information on debt solutions and your options.
Annual Consumer Insolvency Rates in British Columbia
(Per 1,000 Population Aged 18 Years and Older)
British Columbia
| '20 | '21 | '22 | '23 | '24 | |
|---|---|---|---|---|---|
| Insolvency | 2.1 | 2.0 | 2.4 | 3.0 | 3.1 |
| Bankruptcy | 0.6 | 0.5 | 0.4 | 0.5 | 0.5 |
| Proposal | 1.4 | 1.5 | 2.0 | 2.5 | 2.6 |
Vancouver Island and Coast
| '20 | '21 | '22 | '23 | '24 | |
|---|---|---|---|---|---|
| Insolvency | 2.6 | 2.2 | 2.6 | 3.0 | 2.9 |
| Bankruptcy | 0.8 | 0.5 | 0.5 | 0.5 | 0.5 |
| Proposal | 1.7 | 1.7 | 2.1 | 2.5 | 2.4 |
Lower Mainland - Southwest
| '20 | '21 | '22 | '23 | '24 | |
|---|---|---|---|---|---|
| Insolvency | 1.8 | 1.7 | 2.0 | 2.5 | 2.6 |
| Bankruptcy | 0.5 | 0.4 | 0.3 | 0.4 | 0.4 |
| Proposal | 1.2 | 1.3 | 1.6 | 2.1 | 2.2 |
Thompson - Okanagan
| '20 | '21 | '22 | '23 | '24 | |
|---|---|---|---|---|---|
| Insolvency | 2.7 | 2.5 | 2.7 | 3.3 | 3.6 |
| Bankruptcy | 0.8 | 0.6 | 0.5 | 0.7 | 0.6 |
| Proposal | 1.8 | 1.9 | 2.2 | 2.6 | 3.0 |
Kootenay
| '20 | '21 | '22 | '23 | '24 | |
|---|---|---|---|---|---|
| Insolvency | 2.0 | 2.2 | 2.2 | 2.6 | 2.8 |
| Bankruptcy | 0.6 | 0.6 | 0.4 | 0.4 | 0.5 |
| Proposal | 1.3 | 1.6 | 1.8 | 2.2 | 2.3 |
Cariboo
| '20 | '21 | '22 | '23 | '24 | |
|---|---|---|---|---|---|
| Insolvency | 2.9 | 2.7 | 3.1 | 3.3 | 3.8 |
| Bankruptcy | 1.2 | 0.7 | 0.8 | 0.7 | 0.8 |
| Proposal | 1.7 | 1.9 | 2.3 | 2.6 | 3.0 |
North Coast and Nechako
| '20 | '21 | '22 | '23 | '24 | |
|---|---|---|---|---|---|
| Insolvency | 1.8 | 2.6 | 3.0 | 3.3 | 3.1 |
| Bankruptcy | 0.6 | 0.5 | 0.4 | 0.4 | 0.4 |
| Proposal | 1.2 | 2.1 | 2.7 | 2.9 | 2.7 |
Northeast
| '20 | '21 | '22 | '23 | '24 | |
|---|---|---|---|---|---|
| Insolvency | 3.1 | 3.9 | 3.8 | 4.6 | 3.9 |
| Bankruptcy | 1.1 | 1.1 | 0.7 | 0.9 | 0.9 |
| Proposal | 2.0 | 2.9 | 3.1 | 3.7 | 3.0 |
Source: https://www.ic.gc.ca/
Going through bankruptcy in BC can leave your finances and credit in shambles. Learn about your options and the possibilities of avoiding bankruptcy for something less drastic.
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- Automatic “Stay of Proceedings”
- A fresh start
- Stress relief
- Quick solution to being debt-free
