When you file for bankruptcy in Canada, a legal mechanism called a stay of proceedings immediately kicks in. If a creditor calls, simply give them your Licensed Insolvency Trustee’s name and your estate file number, as continuing to demand payment violates federal law.
Filing for bankruptcy is a powerful step towards regaining your financial freedom and stopping the constant harassment from collection agencies. Once your paperwork is submitted to the Office of the Superintendent of Bankruptcy (OSB), an automatic stay of proceedings is enacted across Canada. Whether you live in Vancouver, Toronto, or Halifax, this federal protection legally prevents creditors from contacting you, garnishing your wages, or initiating lawsuits.
However, it is quite common to receive a few stray calls in the days immediately following your filing. It often takes a week or two for the mail to arrive at the creditor’s office and for their internal computer systems to update. You do not need to panic or feel intimidated if your phone rings. Handling a creditor who calls after you filed bankruptcy in Canada is a straightforward process when you know your rights and have a Licensed Insolvency Trustee (LIT) in your corner. 📞
Step-by-Step Process in Canada When a Creditor Calls
When dealing with aggressive debt collectors in provinces like Ontario or Alberta, you must remember that the law is on your side. Generally, you only need to provide basic information to stop the harassment.
Step 1: Answer Calmly and Take Notes
Do not ignore the call out of fear. Answer the phone politely and ask for the caller’s name, the name of the collection agency or bank they represent, and the specific account they are calling about. Write this information down immediately. Keeping a detailed log of who is calling helps your LIT track down any creditors who might have been missed on your initial intake forms.
Step 2: Provide Your Bankruptcy Details
You do not need to explain why you filed or argue about the debt. Simply state clearly: “I have filed for bankruptcy.” Then, provide the caller with the name of your Licensed Insolvency Trustee, their phone number, and your specific estate file number. This file number is your golden ticket, as it proves to the creditor that your insolvency is officially registered with the Canadian government. 📄
Step 3: Refuse to Make Any Payments
Sometimes, an aggressive collector might try to pressure you into making “one last payment” or a “good faith deposit” over the phone. Do not agree to send them a cheque, an e-transfer, or provide your credit card details. Making a direct payment to one creditor while in bankruptcy is considered a preferential payment and can severely complicate your legal discharge.
Step 4: Report Persistent Callers to Your LIT
If the same creditor continues to call you more than a week after you provided your trustee’s information, it is time to escalate the issue. Contact your LIT’s office and give them the notes you took. Your trustee has the authority to send a direct legal notice to the offending creditor, reminding them of the stay of proceedings and threatening legal action if the harassment does not cease. ⚖️
How Much Does it Cost to Stop Creditor Calls in Canada?
The beauty of the Canadian insolvency system is that dealing with creditors is built into the standard process. You do not pay extra hourly fees for your trustee to manage collection calls.
| Service | Average Cost (CAD) | Details |
|---|---|---|
| Bankruptcy Filing Base Cost | $1,800 or ~$200/month | This standard fee covers the administration of your estate and the legal stay of proceedings. |
| Creditor Communication | $0 (Included) | Your LIT handles all creditor correspondence without any additional billing. |
| Legal Cease and Desist | $0 (Included) | If a creditor violates federal law, your LIT addresses it as part of their federal duties. |
How Long Does the Process Take?
The stay of proceedings is instantaneous the moment your LIT formally files your paperwork with the OSB. Realistically, it takes about 5 to 10 business days for all your creditors to receive official notice and update their calling systems. If a collector calls during this brief window, providing your estate file number should stop any further contact immediately. ⌛
Frequently Asked Questions (FAQ)
Can a creditor still sue me after I file bankruptcy?
No. The stay of proceedings legally halts any ongoing lawsuits and prevents new ones from being filed regarding unsecured debts. If you receive a summons, notify your LIT immediately.
What if a family member co-signed the loan?
While the creditor cannot call you, they are legally allowed to pursue the co-signer for the full balance of the debt. Bankruptcy only protects the person who filed, not their guarantors.
Do I still have to talk to my mortgage lender?
Yes, if you intend to keep your home. Secured creditors, like your mortgage lender or car finance company, retain their rights. You must continue making regular payments to them if you wish to keep the secured assets.
Can the Canada Revenue Agency (CRA) still call me?
Once you file, the CRA is treated like any other unsecured creditor for most tax debts. The stay of proceedings stops CRA collection calls and wage garnishments.
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