Definition
Bankruptcy is a legal procedure governed by the federal Bankruptcy and Insolvency Act (BIA). Once discharged (generally 9 months for a first bankruptcy with no surplus income), the borrower can begin rebuilding credit.
Credit file impact (Equifax/TransUnion): - **First bankruptcy**: stays on file 6 years after discharge in Quebec (7 years in some other provinces) - **Second bankruptcy**: stays 14 years after discharge
Minimum delays for a mortgage after bankruptcy: - **Standard A-lender**: 2 years after discharge + rebuilt credit file (score > 680, 2 new active credit lines, 5-10% down) - **A-lender (CMHC insured)**: 2 years after discharge, 5% down if score OK - **B-lender**: possible from 1 year after discharge with 20-35% down - **Private lender**: sometimes possible during bankruptcy with 35-50% down