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Filing for Bankruptcy in Nova Scotia

Is Filing for Bankruptcy the Best Debt Solution for You?

Bankruptcy gives you a clean break from debt that has overwhelmed you. It will eliminate most unsecured debts, but you will need help. If you are considering filing for bankruptcy in Nova Scotia, you must speak to a Licensed Insolvency Trustee.

Whether you are filing for bankruptcy in Halifax/Bedford, Truro, or Bridgewater, this article explains all you need to know.

Why Bankruptcy May Be Your Best Option

Most people filing for bankruptcy are good, hard-working people – just like you.

Common reasons they file include divorce, disability, or loss of a job. Their previously manageable debt has spiralled out of control.


  • Protects you from creditors
  • Freezes interest payments
  • Stops wages being garnished
  • Eliminates most (sometimes all) unsecured debts

In short, it is a chance to rebuild your financial life.

Bankruptcy – Your Head Start

Bankruptcy allows you to keep your home and car (providing the value is less than $3,000 or $6,500 if you need it for work). You also keep:

  • Registered retirement savings plans, less RRSP contributions made in the 12 months before filing.
  • The cash surrender value of life insurance policies, if the beneficiary is your spouse, children, parents or grandparents.
  • Most pension plans.
  • Fuel, food and livestock for your domestic use.
  • All necessary medical and health aids.
  • And any tools you need for your job, up to a value of $1,000.

Filing for bankruptcy in Nova Scotia gives you the chance to live without the burden of debt.

Bankruptcy Lifts a Weight off Your Shoulders

You wave goodbye to debt collectors and legal action against you.

The Licensed Insolvency Trustee will also deal with other issues, including:

  • Collection Agencies that are contacting you
  • Communicating with your creditors
  • Administering your bankruptcy filing.

The Disadvantages of Filing for Bankruptcy

Of course, filing for bankruptcy does have a few disadvantages. While you get to keep all your main assets, you will forfeit the following minor assets:

  • HST cheques
  • Tax refunds for the year you are filing bankruptcy

Your credit score will fall, and the bankruptcy is noted on your credit report and remains on your file for six years or more.

On the other hand, you may be discharged from bankruptcy only a few months after filing. Your debts will then be cancelled.

How Much Does Filing For Bankruptcy Cost?

Licensed Insolvency Trustees offer advice. They charge for their experience, expertise, and time spent consulting with you. However, the cost of filing for bankruptcy in Nova Scotia depends upon your income and circumstances.

Costs can usually be paid in reasonable monthly payments to help you budget.

What Is the Bankruptcy Process?

There are three simple steps to follow when filing for bankruptcy in Nova Scotia. These are:

Step #1 – A Debt Assessment

The Licensed Insolvency Trustee considers your finances and discusses all your options. For example, it may be better to consider a Consumer Proposal.

If bankruptcy is considered the best option, the process will be fully explained.

Step #2 – Completing the Paperwork

The Licensed Insolvency Trustee prepares all the paperwork with you. Forms needed include:

  • An assignment form. This hands over your property to the Trustee for the creditors.
  • A Statement of Affairs form. This lists your assets, income, expenses, and liabilities.

While the Licensed Insolvency Trustee prepares the paperwork with you, you are responsible for accuracy.

Step #3 – Bankruptcy Begins

The Licensed Insolvency Trustee informs your creditors that you are filing for bankruptcy and that bankruptcy has begun. You are now protected from debt collectors and further legal action – providing you comply with the full terms of your bankruptcy agreement.

After Filing, How Long Will You Be Bankrupt?

How long bankruptcy lasts will depend on your circumstances. If it is the first time you are filing, you are likely to be bankrupt for between nine and 21 months. If you are filing for bankruptcy for a second time, your bankruptcy will last for between 24 and 36 months.

The court may also determine how long your bankruptcy lasts if:

  • You have filed for bankruptcy multiple times
  • You have not complied with your bankruptcy duties, or
  • You have committed bankruptcy offences.

Your Duties After Filing

There are several things you must do during your bankruptcy. You will no longer have large debt payments to make, however you must live without credit cards.

Your bankruptcy duties include:

  • Reporting your monthly income
  • Making payments
  • Providing all income tax information
  • Completing all required documentation

To be discharged from bankruptcy, you must comply with your bankruptcy duties. If you don’t, your debts may be returned to you.

Is Bankruptcy Right for You?

If you are struggling with debt of more than $1,000, then filing for bankruptcy in Nova Scotia may be your best option. To discover if this is the sensible thing to do, contact Allan Marshall & Associates today.

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Scott Marshall BBA, C.I.R.P, L.I.T

Scott is serving as Vice President and managing partner of Allan Marshall & Associates Inc. since obtaining his License as a Trustee (LIT) in 2003. Scott graduated with a Bachelor of Business Administration (BBA) from the University of New Brunswick and is an active member of the New Brunswick business community. In past years, Scott has been a valued member of the Wallace McCain institute.