Who Needs to Know about Your Financial Trouble if You Declare an Alberta Bankruptcy?

Posted by: Krista McDonald on 10/27/2011

No one plans to get themselves into financial trouble.  Somehow, it just seems to happen, even in cases where there has been no job loss or layoff.  In a world that equates personal worth with financial success, it can be emotionally devastating to look into the mirror and admit you are barely able to pay your bills.  In the event you are at the point you cannot pay your bills at all, an Alberta bankruptcy may be your only option.

Despite the fact that more and more Canadians are filing for personal bankruptcy, there are still many who view it as the ultimate personal failure.  As such, they worry and wonder who will know about the financial troubles that drove them into Alberta bankruptcy.

In the vast majority of shared living arrangements, the partner will know, even if you have not shared the extent of your difficulty with them.  The sooner you let them know, the better your chances of maintaining a healthy relationship.

Depending on how good you are at hiding your emotions, your close relatives may not suspect and there is no requirement for you to tell them, unless one or more have co-signed loans for you.

In truth, the only people who will know are the bankruptcy trustee you hired to manage your filing, the Office of the Superintendent of Bankruptcy (OSB) where you file your paperwork, your creditors, and the two major Canadian Credit Reporting Bureaus.

You may have heard of some famous person’s bankruptcy filing appearing in the newspapers.  The media is usually only interested in the financial troubles of the rich and famous.

In addition, a notice of a bankruptcy is advertised in the newspaper when it is an "Ordinary" Administration, most personal bankruptcies are filed as a "Summary" Administration.  It will be filed as an Ordinary Administration when the trustee is expecting $15,000 or more to be paid into the estate (through sale of non-exempt assets or surplus income). When a business makes an assignment into bankruptcy it is also filed as an Ordinary Administration.

Some Albertans fear they will lose their jobs if they declare an Alberta bankruptcy.  Unfortunately, if you work for a company where you are bonded or licensed to work on certain financial transactions, you might.  For the vast majority of Albertans who file for an Alberta bankruptcy, their employers will never know.  The only exception is if your wages are currently under a garnishment order.  Your employer will be notified that a bankruptcy has lifted the garnishment order.

The person about whom you should be most concerned is you.  Some Albertans see financial troubles as signs of personal failure and an Alberta bankruptcy can lead to a loss of feelings of self worth.  Your bankruptcy trustee can help you find qualified counsellors to help you deal with any emotional trauma you might experience as a result of your bankruptcy.