The other day I got a call from someone who had come in for a consultation about what declaring bankruptcy in Lethbridge would mean in her situation. She was upset because she saw a notice in the classified section of the newspaper about some Lethbridge resident who had declared bankruptcy. She asked me if everyone would know about her financial trouble if she filed for bankruptcy in Lethbridge.
For almost everyone we work with, the simple answer is no. How then does a bankruptcy notice appear in the classified section of a local newspaper? A notice of a bankruptcy in Lethbridge 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.
The fact is, the only people who get automatic notification of a bankruptcy filing are the Office of the Superintendent of Bankruptcy (OSB), the creditors that are included in the filing and Canada’s two main credit reporting bureaus – TransUnion Canada and Equifax Canada.
The notification that is placed in your credit history drops off after six or seven years, depending on the reporting bureau. The notification in the OSB stays forever as a means of tracking multiple bankruptcy filings from the same individual.
Since these filings with the OSB are a matter of public record, should you go into politics or become famous (or infamous) in some other way, it is possible some reporter somewhere could dig into your record and publicize your bankruptcy. No one is interested in the financial troubles of average residents of Lethbridge.
Finally, in most cases, your employer will not know if you declared bankruptcy. However, if your wages have been garnished, they will be notified to lift the garnishment. In addition, there are some jobs in the financial industry involving handling public money that requires licensing and/or bonding. If these requirements prohibit employment to anyone who has declared bankruptcy, your employer will be notified. You should know these are very rare occurrences.
In summary, beyond the government, your creditors, and the credit bureaus, no one will know about your financial troubles unless you tell them.
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