Bankruptcy for the Poor?by Stephanie Ben-Ishai and Saul Schwartz
February 19, 2007
"Should the bankruptcy process be more readily available to poor Canadians? Several different jurisdictions have recognized that it is can be difficult for poor debtors to file for bankruptcy due to the associated out–of–pocket costs and have identified forms of relief that can assist them in obtaining a fresh start. This paper addresses the question of whether Canadian debtors who cannot afford to pay the normal fees charged by bankruptcy trustees should have low–cost access to bankruptcy through a mechanism other than the summary administration procedure. We draw on two sources to shed light on this question: (1) a comparative analysis of different approaches adopted in the United States, Australia, New Zealand, the United Kingdom and the Netherlands; and (2) our findings from a series of semi-structured interviews with bankruptcy trustees. Bankruptcy trustees in Canada are the private intermediaries (often accountants) who are regulated and licensed by the Office of the Superintendent in Bankruptcy (OSB) and serve as gatekeepers to the consumer bankruptcy process."