One of the main purposes of filing for personal bankruptcy in Canada is to discharge your debts. To discharge your debts means to get rid of them, so that you are not required to pay those debts.
However, there are certain types of debts that are not dischargeable in a bankruptcy. If you go bankrupt, you are still liable for those debts. Here is a quote from section 178(1) of the Bankruptcy & Insolvency Act of Canada:
178. (1) An order of discharge does not release the bankrupt from
(a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;
In other words, going bankrupt does not release you from any “fine… imposed by a court in respect of an offence…”
That means that traffic tickets and fines do not go away if you go bankrupt.
How to deal with traffic tickets and fines
If you are in financial trouble, and you have outstanding traffic tickets and fines, you have a number of options.
Since you know that by going bankrupt you cannot discharge these debts, the most logical option is to pay them. If you don’t pay your traffic tickets it is likely that at some point your driver’s license will be suspended, or you will not be able to renew your license plates. If you have a $100 outstanding fine, it is better to pay the $100 owing and discharge the debt.
If you have made the decision to go bankrupt, you will probably stop paying your other debts, such as credit cards, while your bankruptcy paperwork is being prepared, so you could use the money you are saving to pay your traffic fines.
If you cannot pay them in full immediately, talk to the court or the City and work out repayment arrangements. You may be able to make weekly or monthly payments towards your fines. It is possible that if they are receiving regular payments, they will not suspend your license.
A final option is to get the advice of an expert in this area. In some cases, if you are not an expert in traffic law, it can be risky to attempt to deal with traffic fines on your own. So, if you can’t deal with this on your own, getting help now is a wise choice.
Once you have dealt with your traffic fines, it may then be necessary to consult with debt expert to deal with your other debts.