Bankruptcy And Sponsoring a Relative’s Application For Immigration

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The recent conflict in the Middle East has resulted in a massive migration of citizens from worn torn countries.  This mass migration has resulted in a large number of people stuck in refugee camps hoping to find asylum in various countries, including Canada.  While the Government of Canada has committed to sponsoring 25,000 refugees, some have family members residing in Canada who are willing to sponsor their immigration application.

According to Immigration Canada you can sponsor a relative’s immigration application as long as you are a citizen or permanent resident of Canada and are 18 years of age or older.  There are however some restrictions, one of which states that you can not be an undischarged bankrupt.

A first time bankrupt with no surplus income will be eligible for an automatic discharge after 9 months as long as all conditions are met.  If there is surplus income the discharge will be issued after 21 months.  A second time bankrupt will be eligible for an automatic discharge after 24 months or after 36 months if there is surplus income.

If you are considering sponsoring a relative’s immigration to Canada you might not want to wait until you are discharged from bankruptcy, which could take anywhere from 9 – 36 months.  You could postpone filing for bankruptcy until after the sponsorship, however, the application process could take several years.  In the meantime, your creditors will continue their collection activities which might include legal proceedings.

As an alternative to bankruptcy, you might want to consider filing a consumer proposal which will not impact the sponsorship application process.   A consumer proposal still legally protects you from creditors however it allows you to work out settlement arrangements with them.

If you have already immigrated to Canada, filing for personal bankruptcy will not affect or delay your efforts to become a Canadian citizen.

There are advantages and disadvantages to both personal bankruptcy and consumer proposals that are specific to each person’s situation so you should consult with a Licensed Insolvency Trustee to help understand your options.

Powell Associates Ltd. is a Licensed Insolvency Trustee (LIT) focused on providing debt settlement, proposal and bankruptcy solutions for individuals and businesses.  We offer free consultations to review your personal financial situation and practical debt resolution options.  Contact us to discuss your situation over the phone or book an appointment to meet us face-to-face in Saint John, Moncton, FrederictonCharlottetown or Dartmouth - it's your choice.