How debt can impact your ability to sponsor an immigrant to Canada.

• Author: Hoyes, J. Doug

With the well-documented problems occurring now in many areas of the world, an increasing number of Canadians are considering sponsoring a relative or other person to immigrate to Canada. But is it possible to be a sponsor if you have debt? The answer is yes, but there are limitations.

First, a caveat: I am a bankruptcy trustee, not an immigration lawyer, so I will confine my comments to the area of debt. Before embarking on a legal process, such as the immigration process, you should always consult a knowledgeable legal professional.

Government Restrictions on Sponsorship

With that caveat in mind, the basic requirements to sponsor a relative can be found on the Government of Canada website. There are a number of debt-related problems that may disqualify you from being able to sponsor a relative, including:

* being behind in alimony or child support payments. Simple arrears, such as being a week behind in your payments may not be enough to disqualify you, but if you are in default, it is likely that you will not be able to be a sponsor based on the assumption that if you are unable to meet your existing Canadian family support obligations, you will likely be unable to support an eligible relative.

* you did not repay a previous immigration loan, made late payments, or missed payments.

* you have declared bankruptcy and are not yet discharged.

As this list indicates, simply having debt does not automatically disqualify you from having the opportunity to sponsor a relative. Most Canadians have debt, whether it be a mortgage or a car loan, and being behind on your debt payments may not disqualify you.

However, if you are currently bankrupt, you will not be able to sponsor a relative until you are discharged from your bankruptcy. Whether you are discharged or not from your bankruptcy is a key point, so a further explanation is in order.

Discharged vs Undischarged Bankrupt

The specific question you will be asked to answer on Form IMM 1344, last updated August 2014, is question #8: "Are you an undischarged bankrupt under the Bankruptcy and Insolvency Act?"

If you were bankrupt in the past, but are now discharged, your answer would be "no"; so you would not be disqualified.

To be "undischarged" means that you are currently in the state of bankruptcy. In Canada, if you are bankrupt for the first time, you are bankrupt for a minimum of nine months (or 21 months if you have income over the limits set by the government). A second bankruptcy will last...