Bankruptcy in Canada

I was visited by a Canadian bankruptcy trustee vacationing in Florida who wanted to learn more about our bankruptcy system. Canada has the equivalent of Chapter 7 and Chapter 13 bankruptcy statutes.The main difference between their system and our own is their exemptions. Exemptions differ by Province. In Ontario, for example, the Debtor gets no homestead exemption. Ontario provides more liberal personal property exemptions such as $10,000 household goods, a $5,000 vehicle exemption, $5,000 clothing, plus a $10,000 household furniture exemption. Another interesting difference is that throughout Canada bankruptcy is mostly non-judicial. Bankruptcy petitions are not prepared by attorneys, and attorneys normally do not represent debtors before the trustee. A debtor seeking to file bankruptcy submits to the jurisdiction of a licensed bankruptcy trustee who examines the debtor and collects non-exempt property.

There are about 900 licensed trustees throughout the country, most of whom work for corporations. The trustees in private practice must develop their own practice and solicit debtors as customers. My visitor, a licensed trustee, said he charges about $1,400 per case.

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