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Nova Scotia Bankruptcy

Those who have been paying attention to the world economy over the past few years are unlikely to be surprised by the fact that consumer debt is again rising in Canada. Throughout the country, residents have shown an increasing willingness to take out new car loans and installment loans for large purchases such as furniture and appliances. Although the average increase in these loans did not reach record levels from the recession years, the fact that the average debt represented by these loans grew by nearly 3.2 percent is still a cause for concern.

Certain provinces and territories have more reasons to be worried than others. After all, an increase in consumer debt levels makes it more likely that people will not remain current in paying their bills and fall behind on their minimum payments. In turn, this can snowball into a larger number of bankruptcies and consumer proposals.

Insolvency & Bankruptcy Statistics in Nova Scotia

  Nova Scotia Nationwide
  Insolvency Bankruptcy Insolvency Bankruptcy
Q2 2022 938 364 25,286 6,510
Q1 2022 696 261 23,153 5,975
Q4 2021 697 285 22,999 7,071
Q3 2021 705 298 21,649 6,740
Q2 2021 802 340 23,497 7,801
Q1 2021 813 351 23,824 7,320
Q4 2020 803 359 23,364 7,855
Q3 2020 750 348 20,692 7,162
Q2 2020 680 309 19,151 6,410
Q1 2020 1,265 583 33,212 11,443
Q4 2019 1,550 746 35,139 13,526
Q3 2019 1,503 783 34,690 13,753

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

The Basics of a Nova Scotia Bankruptcy

While Nova Scotia is allowed to set its own bankruptcy exemption limits, the federal government establishes most regulations for bankruptcy in the province. Simply put, bankruptcy is the option of last resort for regaining control of your finances after you get in over your head in debt. It allows you a clean start in your finances and eliminates most debts that are not secured by an asset such as a house. If you owe at least $1,000 in unsecured debt, you are eligible to file for bankruptcy.

Residents file for bankruptcy through a licensed bankruptcy trustee. This trustee establishes a trust made up of a debtor’s assets from which a debtor’s various creditors are paid. As a result, creditors recover some of what they have loaned to a person who files for bankruptcy as long as the debtor still owns some tangible property. There are exemptions when it comes to what debtors must hand over to their trustee, which means that all people who file for bankruptcy get to keep something. After a period typically lasting nine months, the trustee recommends discharge, and, if approved, the bankruptcy is made official. At that point, all debts covered by the bankruptcy proceedings are erased.

Understanding the Pros and Cons of a Nova Scotia Bankruptcy

When it comes to bankruptcy, Nova Scotia residents should not choose this debt solution until they understand its pros and cons. Advantages to filing for bankruptcy in Nova Scotia include:

  • legally prohibiting debt collectors from harassing you
  • forgiveness of student loans if you file at least seven years after your status as a student ends
  • financial counselling to help you avoid bankruptcy in the future.

On the other hand, there are many negatives to bankruptcy such as:

  • being legally unable to hold certain corporate board positions during the bankruptcy process
  • having your credit ruined for seven years, making it all but impossible to get new loans
  • exemption amounts that force you to give up much of what you own; major exemptions in Nova Scotia include $6,500 for a motor vehicle required for business ($3,000 if only for personal use), $1,000 for vocational tools, and necessary food and clothing.

Annual Consumer Insolvency Rates in Nova Scotia

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

Nova Scotia
  ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21
Insolvency 5.7 6.2 7.0 6.9 7.8 7.5 7.3 7.8 4.4 3.7
Bankruptcy 4.3 4.4 5.0 4.8 5.5 5.0 4.5 4.1 2.0 1.5
Proposal 1.4 1.8 2.0 2.1 2.3 2.5 2.7 3.7 2.4 2.1
Halifax
Insolvency 5.1 5.5 6.2 6.2 6.5 6.1 5.8 5.9 3.8 3.0
Bankruptcy 3.9 4.0 4.5 4.5 4.7 4.1 3.4 3.1 1.6 1.3
Proposal 1.2 1.5 1.7 1.8 1.8 2.0 2.4 2.8 2.1 1.7
Cape Breton
Insolvency 6.3 6.2 7.7 8.1 11.1 10.2 10.5 10.9 5.9 5.3
Bankruptcy 4.3 3.8 4.7 4.4 6.9 5.6 5.7 5.2 2.7 2.3
Proposal 2.0 2.4 3.0 3.8 4.3 4.6 4.8 5.6 3.1 3.0
North Shore
Insolvency 6.0 7.3 8.3 7.7 8.8 8.5 7.8 9.4 5.3 4.1
Bankruptcy 4.5 4.8 5.8 5.4 6.1 5.9 5.2 5.0 2.3 1.5
Proposal 1.5 2.4 2.5 2.3 2.7 2.6 2.6 4.4 3.0 2.6
Annapolis Valley
Insolvency 6.5 7.1 7.6 7.8 8.8 7.4 7.3 8.1 4.1 3.5
Bankruptcy 5.4 5.5 6.0 6.0 7.1 5.8 5.3 4.6 2.0 1.7
Proposal 1.2 1.6 1.6 1.7 1.7 1.6 2.0 3.5 2.1 1.9
Southern
Insolvency 5.8 6.2 6.4 6.1 6.8 8.6 8.4 9.0 4.7 3.8
Bankruptcy 4.3 4.6 4.8 4.6 4.7 5.6 5.7 5.0 2.4 1.6
Proposal 1.6 1.6 1.6 1.5 2.1 3.1 2.7 4.0 2.3 2.2

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

Bankruptcy or Debt Management Plan

Since bankruptcy is the option of last resort, you should consider other debt solutions first. Fill out the debt relief form for more information on the debt management plan and other programs and find out how they may be a better option for you than bankruptcy.

Additional City Resources in Nova Scotia:

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