Bankruptcy for sole proprietorships and partnerships:
If you own a sole proprietorship or partnership, you have unlimited liability for your company’s debts. Your personal assets (such as your house or vehicles) can be seized if your business cannot meet its financial obligations. Declaring bankruptcy for your business is effectively the same as declaring personal bankruptcy.
If you are an individual and your total debts do not exceed $250,000, you may also want to consider a consumer proposal. This is a formal, legally binding process that is administered by a Licensed Insolvency Trustee (LIT). The LIT will work with you to develop a plan for paying back your creditors. Learn more about consumer proposals from the OSB.
Bankruptcy for corporations:
If you own a corporation, you cannot be held personally liable for the debts of your business. But declaring bankruptcy isn’t a free pass—it will still affect your credit rating and make it harder to get a loan in the future.