Bankruptcy can cause issues when someone is planning to sponsor their family for permanent residency so they can join them in Canada.

Does bankruptcy affect an individual’s family immigration sponsorship process? Yes, it does. However, there are steps you can take to alleviate delays and mishaps while waiting for sponsorship approval.

For newcomers to Canada who have to file bankruptcy, while planning to sponsor their families, there are steps you should take to ensure you don’t stretch regular delays. We’ll outline the 5 most important factors that bankruptcy can have on you when you want to sponsor your family to come to Canada.

Can I sponsor my family while I’m bankrupt?

While you are bankrupt, you cannot sponsor any family member to come to Canada. During time you are an undischarged bankruptcy. When you file for bankruptcy, the primary effect that debt has on immigration is that you cannot apply to sponsor your family to immigrate to Canada.

But this isn’t a permanent situation. Once you get your bankruptcy discharge, you will then be allowed to submit a sponsorship application to immigration Canada.

While bankrupt, what other restrictions do I face sponsoring my family?

During the period of bankruptcy, here are some common restrictions that exclude you from sponsoring your family overseas:

• Non-payments of child support and alimony. It is crucial you don’t miss paying alimony or child support as the Canadian government will think since you are missing existing payments, you will not be able to support your sponsored family relatives financially..
• Non-payments, missed or late payments of immigration loans or bank loans.
• Present bankruptcy that is not discharged.

What’s the difference between discharged and undischarged bankruptcy?

“Undischarged” is the time when you are bankrupt. The period of undischarged bankruptcy usually lasts 9 or 21 months for first-time bankruptcy. If you have filed bankruptcy for a second time or more, your undischarged period can last up to 24-36 months before you are released. During this time frame, you cannot apply to sponsor your family.

“Discharged” means that your bankruptcy period is released. This is a good time in your life, as this means you are discharged from your debts. Once the government of Canada sees that your bankruptcy is discharged, they give you the green light to begin your duties to start the sponsorship process.

Practical Options for Debtors Who Want to Sponsor a Family Member

If you don’t think you can wait out the undischarged period of bankruptcy and want to sponsor your spouse for Canadian residency, don’t file for bankruptcy. Rather, apply for a consumer proposal instead.

A consumer proposal is a legal contract agreeing to a settlement where you outline a payment plan with your creditors. A consumer proposal might work in your favour if you don’t have a large amount of debt. This is because you can arrange to pay a portion of the full amount that you owe to your creditors.

If your creditors agree to your consumer proposal, you can make payments and be debt-free within a time frame of no more than 5 years, and once the amount is paid off, your debts are discharged. This avoids filing for bankruptcy, and even though it lasts up to 5 years, you are not restricted like a bankruptcy and are able to apply to sponsor your spouse and family. However, there are conditions.

The government of Canada might still reject your sponsorship if you have filed a consumer proposal because it signifies that you are in great debt. Having savings and the proper means to take care of your sponsored family is important but if debt is a factor, you are not likely to be able to anyways.

Depending on the amount of your debt stated in the consumer proposal, the government may then assess if you will be able to keep up with your payments and cover the costs to take care of your family when they review your overall budget.

Remember a consumer proposal deals with your debts as does a bankruptcy, and keep in mind that a consumer proposal follows the same steps as a bankruptcy.

Another option would be to borrow money from your family to pay off your debts, thus avoiding filing for bankruptcy or a consumer proposal. If you have access to family money, you could waive the waiting period and start the application process.

Does a consumer proposal affect my sponsorship?

Now that you discussed some options to filing for bankruptcy, a consumer proposal might seem like a good option after all, right? All in all, a consumer proposal won’t affect your sponsorship application. But as stated, the Government of Canada can still say “no” if they deem your debt to be unmanageable with the addition of your family during the payment plan.

Besides unmanageable debt, here are some circumstances that can hurt your chances of sponsoring your family:

• Your Canadian citizenship or permanent residency has been revoked
• You are incarcerated
• You have been charged with a criminal or sexual offence in Canada
• You stopped making child support payments
• You stopped making payments to the Immigration and Refugee Protection Act
• Your salary does not meet the minimum requirements
• Your bankruptcy remains “undischarged” under the considerations of Bankruptcy and Insolvency Act

Filing for bankruptcy does not mean that you won’t be able to sponsor your family, but you will have to follow a guideline that is time-sensitive. As you can see, if you plan to sponsor your family while bankrupt, it will cause delays until you are discharged.

But, if you stay on track of your payments, should you choose a consumer proposal or until your bankruptcy is discharged, you can start your application process. If you require additional bankruptcy immigration counselling in Toronto, the GTA, or Southern Ontario, we’re here to help.

Always consult with your immigration lawyer when making a decision that could affect your sponsorship.

To learn more about how bankruptcy affects sponsoring your family, call Kevin Thatcher & Associates at 1-888-329-5198 or contact us here.