Bankruptcy may seem like a private affair between you as the debtor and your creditors, but in reality, it is a matter of public record. This means if a third party wishes to establish your Bankruptcy status, they can do so. But it costs money to search Bankruptcy records and it is not a straightforward or casual process.
The Office of the Superintendent of Bankruptcy and Bankruptcy Records
The Office of the Superintendent of Bankruptcy (OSB) works within the government department Innovation, Science and Economic Development Canada. The OSB has supervisory responsibility for all estates and related matters under insolvency legislation, maintaining Canadian Bankruptcy records.
The OSB’s duties include the maintenance of these insolvency records and the distribution of current information to licensed credit bureaus in Canada. Each month a list of new Bankruptcies is dispatched, along with notification of individuals who have been discharged from previous Bankruptcies. The bureaus then add this information to the credit records of the individuals in question.
Bankruptcy records are removed from individual credit records after a set number of years – typically six from discharge, but longer if you have previously been bankrupt. Before that point, credit providers and any other organizations viewing your credit record will become aware of the previous Bankruptcy.
Bankruptcy notifications
In Canada, all individual consumer Bankruptcies are initiated and administered by Licensed Insolvency Trustees (LITs). Once the documents have been signed and the process begins, the LITs will:
- Send a notice of Bankruptcy to each creditor.
- Inform the Office of the Superintendent of Bankruptcy so your credit record can be updated.
- Inform the Canada Revenue Agency (CRA) – during Bankruptcy, LITS file the tax returns of bankrupt individuals.
- Contact debt collection agencies that may have been targeting you so they cannot take any further action against you.
In most circumstances, employers do not need to be notified – unless creditors have begun to garnish your wages.
If you held large assets involving complex estate records before your Bankruptcy, there may be a public notice of your Bankruptcy in the local newspaper or similar publication in order to alert creditors. This is also normal practice when larger companies go bankrupt. Otherwise, newspapers rarely cover individual Bankruptcies because journalists do not normally consider these newsworthy. In any case, they are unlikely to hear about them in the first place.
If there has been any court action associated with your Bankruptcy, this will also be a matter of public record.
Generally speaking however, knowledge of your Bankruptcy is unlikely to extend beyond your LIT, the OSB, the CRA, debt collection agencies and your creditors – unless a third party decides, for whatever reason, to investigate and search government records.
How Bankruptcy searches are conducted
To conduct a Bankruptcy search in Alberta, for example, they will first need to create an account on the OSB website and then log in. There will be no results listed unless specific search criteria are entered – e.g. names, ages and places.
Search results will include the date the Bankruptcy began, the Bankruptcy Trustee (i.e. the LIT who is administering it), and the individual’s assets and debts.
A fee is payable for each search, with an additional amount required if more than ten search results are produced and the enquirer wants to view results 11 and onwards. If they wish to view results 20 and onwards, they will need to pay even more additional amounts.
The structure of this insolvency database discourages casual enquiries. The third party must enter specific details or the search fees will begin to accumulate. The OSB is aware that Bankruptcy is a sensitive matter and most people don’t want theirs to become common knowledge if they can avoid it.
Looking for financial support?
Filing for Bankruptcy may seem like a daunting step to take. People in financial difficulties often imagine embarrassment and humiliation if it becomes public knowledge – so it is reassuring to know that this simply does not happen in most cases. Bankruptcy stigma is a thing of the past. More people are filing for Bankruptcies and Consumer proposals in Canada than ever before, and we are here to help you through it without judgement.
If you are a resident of Alberta struggling with debt, why not contact local LIT firm Allan Marshall & Associates today, for a free, no-obligation consultation. Let us help you on your way towards a debt free future.
