To obtain your bankruptcy discharge in Canada, you are legally required to complete two mandatory credit counselling sessions. These sessions are designed to help you rebuild your financial literacy and usually cost around $85 CAD each, which is already included in your monthly bankruptcy payments.
Filing for bankruptcy in Canada is not just about eliminating debt; it is fundamentally about financial rehabilitation and securing a fresh start. The federal government recognizes that without addressing the root causes of financial distress, individuals might find themselves facing the same debt cycles in the future. Because of this, the Bankruptcy and Insolvency Act (BIA) makes financial education a core component of the insolvency process.
This guide outlines everything you need to know about the two mandatory credit counselling sessions required during a Canadian bankruptcy or consumer proposal. Whether you reside in Manitoba, British Columbia, or New Brunswick, the curriculum and requirements set by the Office of the Superintendent of Bankruptcy (OSB) apply equally to all Canadians. If you need professional help starting your debt-free journey, you can easily locate a reputable Licensed Insolvency Trustee (LIT) through our Canadian legal directory. 🏠
Step-by-Step Process for Mandatory Credit Counselling
The counselling sessions are carefully timed to provide you with the right information at the right stage of your recovery. They are conducted either by your Licensed Insolvency Trustee or a qualified insolvency counsellor registered with the OSB. Most applicants find these sessions incredibly supportive and free of judgment.
Step 1: Scheduling the First Session
Your first counselling session must take place between 10 and 60 days after you officially sign your bankruptcy or consumer proposal paperwork. Your LIT’s office will reach out to schedule this appointment. Today, to accommodate busy work schedules and travelling, these sessions can often be conducted over a secure video call or via telephone. 📅
Step 2: Completing the First Session (Budgeting and Money Management)
The primary focus of the first stage is immediate financial stabilization. During this meeting, your counsellor will help you identify the non-dischargeable expenses you still need to pay, teach you practical budgeting techniques, and discuss the warning signs of financial difficulties. You will work together to create a realistic monthly living budget.
Step 3: Scheduling the Second Session
The second session is legally required to take place no later than 210 days (about seven months) after your initial filing. This gap allows you to practice the budgeting skills you learned in the first session and stabilize your post-bankruptcy life before tackling the next set of concepts. ⏰
Step 4: Completing the Second Session (Rebuilding Credit)
As you approach the end of your bankruptcy period, the second session shifts focus entirely toward your future. Your counsellor will explain how to read your Canadian credit report (from Equifax or TransUnion), how to successfully rebuild your credit score using secured credit cards, and how to set long-term financial goals. You will also discuss the emotional factors that drive spending habits.
What Topics Are Covered? (Session 1 vs Session 2)
The federal government strictly dictates the curriculum to ensure all Canadians receive high-quality, actionable financial education. 📚
| Feature | First Session (10 – 60 Days) | Second Session (Up to 210 Days) |
|---|---|---|
| Primary Focus | Immediate stabilization and budgeting. | Long-term planning and credit rebuilding. |
| Key Topics | Money management, establishing a living budget, identifying spending habits. | Post-bankruptcy credit scores, obtaining new credit, setting financial goals. |
| Action Item | Creating a workable monthly budget. | Creating a step-by-step credit repair plan. |
How Much Does it Cost in Canada?
A common concern is how to afford professional financial counselling while going through bankruptcy. Thankfully, the costs are fully regulated and integrated into the system. 💵
- Regulated Fees: The OSB sets the fee for mandatory counselling at $85 CAD per session.
- No Separate Billing: You do not need to bring your cheque book to the meeting. This $170 total cost is already built into the regular monthly payments you make to your Licensed Insolvency Trustee.
- No Hidden Costs: Registered BIA insolvency counsellors cannot upsell you on expensive “credit repair” loans or hidden services. The process is completely transparent.
Frequently Asked Questions (FAQ)
What happens if I forget to attend a mandatory session?
If you fail to complete either of the two mandatory credit counselling sessions, your Licensed Insolvency Trustee cannot legally apply for your automatic discharge. This means you will remain in a state of bankruptcy indefinitely until the sessions are completed and a court hearing is held.
Can I complete the counselling sessions online or over the phone?
Yes. The Office of the Superintendent of Bankruptcy (OSB) permanently modernized the rules, allowing LITs and registered counsellors to conduct these mandatory sessions via telephone or secure video conferencing across Canada.
Do I need to do these sessions if I file a Consumer Proposal instead of Bankruptcy?
Yes. The requirement for the two mandatory financial counselling sessions applies equally to both personal bankruptcies and consumer proposals filed under the BIA in Canada.
Will my spouse need to attend if we filed a joint bankruptcy?
Yes. If you and your spouse filed a joint insolvency proceeding, you are both required to complete the counselling. However, most trustees will allow you to attend the sessions together as a couple to discuss your shared household budget.
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