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Jeremy Kroll
I have been helping people solve their money problems for over 11 years. I joined A. Farber & Partners Inc. in 1996 and became a licensed Trustee in Bankruptcy in 2001. Prior to joining the firm, I practiced as a Chartered Accountant with a major accounting firm both in South Africa and Canada.
573 comments:
«Oldest ‹Older 401 – 573 of 573If the debt in question existed on or before the date you filed for bankruptcy, then it may have been discharged pursuant to the Bankruptcy and Insolvency Act.
If this debt was incurred after you filed for bankruptcy, you would still be responsible for this debt.
There are certain debts that are not dischargeable from bankruptcy which include such debts as, child support, spousal support, fines and penalties of the court (traffic tickets as an example), student loan debts if you have been out of school for less than 7 years (less than 10 years back in 2005) and any debts where fraud has been proven in court.
Without more specific details of the debt to which you speak, it is difficult to determine the circumstances under which the creditor is requesting payment.
However, if this debt was incurred prior to filing for bankruptcy, and if this debt is dischargeable under the Bankruptcy and Insolvency Act rules, then, yes, the creditor should no longer be attempting to enforce collection and is in violation of the Federal Statutes contained in the Bankruptcy and Insolvency Act. You should notify the creditor that you filed for bankruptcy protection in 2005 and were granted a discharge from your debts, including this debt and that they should cease collection efforts immediately.
You can send them a copy of your Discharge Certificate and/or request that they contact your Trustee.
Although the will may stipulate a trust agreement, to ensure that the house is protected from seizure in a bankruptcy, there would need to exist a proper trust set up.
If a proper trust is not in place, then there would be a need for a Trustee to review the situation and determine whether or not a trust is in fact in place which would result in an unknown as to whether or not the house is protected in a bankruptcy scenario.
We suggest that you consult with a lawyer to determine whether or not a legal trust has been put in place which would effectively restrict access to the property by any of your husband's creditors.
If the house will eventually only pass into your spouse's name, the house would have no impact on your bankruptcy at all.
In Ontario a bankruptcy remains on your credit report for a period of seven years from the date filed, or just a bit more than six years after a 9-month bankruptcy.
For many people who have had debts sitting on their bureau report for many years, sometimes decades, a bankruptcy filing is one method of clearing up the old debt and having it removed completely.
If you file for bankruptcy in Canada, all property, wherever located in the world, vests in the Trustee of your estate. What this means, is that the Trustee takes ownership of all assets and determines whether or not they have any value and if yes, they are to realise this value for the benefit of the unsecured creditors. This can be done either by way of sale to a third party or the debtor can pay the Trustee the equivalent value and retain ownership.
I am about to start bankruptcy proceedings. I have an account where I was given overdraft protection, but have not used it at this time. When I go into bankruptcy, will I still be able to use the protection if needed as it was approved before going into bankruptcy.
If the account is at a bank where you have other debts, then the overdraft will be cancelled by the bank. If you do not owe the bank anything, technically the Trustee would need to notify them of the bankruptcy which may result in the bank discontinuing the overdraft protection at their discretion.
I have property which is paid for (I have the deed) approx value 80,000. I received a line of credit type loan and paid
cash for property. My father co-signed for the loan and used his house as collateral so there is no lien on my property.
My question is should I transfer title to another family member to protect this asset before entering into bankruptcy ?
Regards,
How am I able to check my credit status in Canada?
Transferring a property for the purposes of defeating your creditors is something that a Trustee would review in your bankruptcy. If you know yourself to be insolvent, and while insolvent, you transfer a property to a family member for no consideration, this is called a settlement. Under the Bankruptcy and Insolvency Act, a trustee would be obliged to attack this transaction in court. If the court finds this transaction to be a settlement, the property that was transferred to the family member would be deemed to once again be your property, and consequently, property of the bankrupt estate, and the Trustee would realize on the property for the benefit of the unsecured creditors.
You may want to consider taking a mortgage against the property and either paying your creditors in full or making a proposal to your creditors. Should you wish to discuss this further, you can contact us at 310-1100 to arrange a no-obligation, free initial consultation with one of our managers.
You can check the status of your credit report by visiting the web sites of the two major credit reporting firms in Canada:
- www.equifax.ca
- www.transunioncanada.com
Once on those sites you can use your valid credit card to instantly order a credit report. You can view it online and then print it to your own printer.
This will give you an excellent overview of your credit in Canada.
If my customer goes into corporate bankruptcy and wishes to continue buying my products, how secure is any credit we issue? I heard that supplier credit is guaranteed payment during the bankruptcy period.
I am $48,000 in debt (credit cards), I am without employment.
My question is, I co-own a cottage with my sibling outside of Ontario (approx. value $18,000).
If I file for bankrupcty, what happens to my portion of the cottage?
Thank you for your help.
Hello! I am currently $22,000 in debt for a line of credit& cards. My bank says my ratio is 49% and they won't help me. I cannot meet min. payments anymore&Im having to purchase everyday items like groceries on current credit cards to try and make due. Would that look bad if I filed for bankruptcy? I am making payments on debts.
I am considering bankruptcy and wondered - If I have a line of credit with the same institution that my work puts my RRSP contribution into - what will happen to my RRSP's after bankruptcy. I understand that any RRSP I have right now would be taken, but what about the contributions I make after the fact?
My 75 year old mother just advised me she is $23,000 in debt on 4 credit cards. She has no assets other than personal possessions, a 9 year car and pension income that amounts to $1600.00/month. After paying rent and utilities, she has about $150 left for groceries, etc.
I am in no financial position to pay any of this debt so I felt declaring bankruptcy was her only option. Is there any other options available for her?
My brother lost his job two months ago. He's on EI and his doctor has recommended that he apply for Disability due to a debilitating health condition. He can't pay his mortgage, he owes back taxes, including property taxes, and has a huge credit card debt. He contacted a bankruptcy trustee who told him that he doesn't need to apply for bankruptcy until he starts working again. That doesn't sound right, especially since he may never be able to work again. If he gets approved for Disability payments, can't they be garnished if he doesn't apply for bankruptcy?
Hello,
I am unemployed with a large load of debt on my plate, I have not paid my bills for over a year now and almost all my bills are written off or in collection agencies. I have been thinking about filling for bankrupcy for awhile now but am afraid it will ruin my future.
Would this affect me in getting a house?
If I were to get married would it go on my partners credit?
How long does it stay on my record?
Will I ever be able to rebuild my credit?
Thanks so much!!
When a corporation goes into bankruptcy, there are 2 potential scenarios under which the corporation (through the Trustee) would find itself needing credit terms from suppliers.
1. Cease normal operations immediately and sell the assets requiring some continued services and/or supplies to until the assets are sold.
2. The business is operated by the Trustee to enable a sale of the entire business on a going concern basis to maximize recovery for the creditors requiring continued supply (although possibly on a reduced basis from normal operations).
In both scenarios, the Trustee may require continued supply of services and/or products to either enable the shut down or continued operations of the business. In these cases, the Trustee or its representative would contract directly with the supplier for these services and/or products. The Trustee may request credit terms on which to obtain these services and/or products and would only enter into these agreements if the Trustee was sure that these purchases could be paid for.
The Trustee may, if requested, sign a guarantee to help provide assurances to the supplier that their account (for services or product delivered during the bankruptcy) will be paid. This guarantee is from the Trustee only in its capacity as Trustee of the estate of the corporation and not in its personal capacity.
A third scenario under which a supplier may be asked to advance credit terms to a business that has filed for bankruptcy, is after the business has been sold by the Trustee. In this scenario, the new owner, (who may in fact be the original owner(s) of the bankrupt corporation) may request credit but as a new business and as such, you would not have any guarantees from the Trustee that your account will be paid and you should carefully consider the credit worthiness and do your due diligence on the new owner.
Thank you for your email regarding your financial difficulties and your cottage ownership. You seem to indicate that the cottage could have some equity in it? If so, it is essential that you determine the actual net equity in a bankruptcy scenario. To make this determination, you need to know the current balance of any mortgages outstanding, any property tax arrears and the current market value of the cottage. Unfortunately, the property tax assessment value is not a reliable value for this purpose and you will need to get either an opinion of value from a real estate agent or an appraisal from a real estate appraiser.
The equity in the cottage becomes an asset of the bankruptcy estate and must be dealt with by the Trustee. Therefore, only the Trustee would have control over any sales process after filing.
However, it IS possible to purchase your interest in the property back from the Trustee. However, this is too detailed a topic to explain in this forum. Please contact us toll-free at 310-1100 to set up a no obligation initial consultation where we would be happy to meet with you and discuss all the implications of filing for bankruptcy and specifically how this relates to your cottage.
Thank you for your email. It sounds like you're caught in a cycle of debt - using credit cards to pay for weekly food and other necessities is a dangerous signal that you need to regain control over your financial life.
I would not be overly concerned at this point about looking bad in the eyes of your creditors - they will be able to tell very quickly from a glance at your credit report that you are running into extreme difficulty. A debt to income ratio of 49% tells me you are running into a wall of debt and need help.
We would need to determine how much income you have coming in to your household each month, and what your fixed expenses (rent, insurance, utilities, etc) are. Based on that calculation and the generation of a simple budget we will be able to help you decide whether you can handle a consumer proposal or if you should be filing for bankruptcy protection instead. The important thing will be for us to help you get away from the cycle of debt you are trapped in.
Please call us today at 310-1100 so we can book a free consultation for you and help you get back on track financially.
The Trustee will be required to instruct you to relinquish any RRSP contributions you've made to this retirement investment in the 12 months prior to the filing of your insolvency. Any contributions prior to that time period you can hold on to.
However... it may be wise to move the surviving RRSP funds to a new institution where you do not have any debt owing at the time you file your insolvency. This would be done purely to protect you from any issues that might arise with the existing institution at the time of filing.
Please give us a call at 310-1100 today to book a free consultation so we can discuss this issue with you in greater detail.
Your 75-year-old mother is obviously living on her credit due to her low monthly pension income. Unfortunately that has resulted in a downward spiral of increasingly-dangerous debt accumulation that she will have a great deal of difficulty extricating herself from if she does not file for protection from her creditors.
I strongly recommend your mother consider bankruptcy protection as her monthly budget is far too tight to consider making a consumer proposal to her creditors.
If she calls us today at 310-1100 we can arrange a free consultation for her at an office close to where she lives, alleviating your stress over this issue as it is obviously causing you a great deal of frustration of worry to see your mother in the midst of this tough situation. Low monthly payments to her estate would allow her to clear up all of her debt pressures within (hopefully) less than one year.
My understanding of disability payments is that even though they cannot be garnisheed by the creditors, the bank account where they are deposited can be frozen and the funds removed by the creditor. So being on disability does not provide 100% protection from his creditors. The same would apply to EI payments.
I would recommend that your brother seriously consider bankruptcy protection from his creditors. Calling 310-1100 today can get him a free consultation at one of our 29 Ontario offices - we can sit down with him and discuss his financial situation with him in detail.
Thank you for your question today. If you have failed to pay your debts to the point where they've gone to collections then your credit report (obtain a free copy at http://www.equifax.ca) is severely damaged. It will remain in that state (at an R9 level, akin to filing for bankruptcy) for seven years after you've either cleared up your debt (by paying it in full to your creditors) or filed for bankruptcy protection from your creditors.
If you are unemployed it might be best to find some sort of work before you enter into bankruptcy protection - right now you have nothing to protect but once you are working your paycheque will need to be protected from your creditors.
In respect to your other questions:
1. Obtaining a mortgage will be extremely difficult while you are carrying your debt load. Clear it up first, wait 3 or 4 years and then start talking to mortgage brokers. The larger your downpayment the better your chance of obtaining a reasonable mortgage.
2. Your social insurance number is how the credit bureaus track your debts. Your partner's social insurance number would be different, therefore your debts are separate too. Avoid joint debt and you will avoid any impact on your partner from your bad debt.
3. Once you are discharged from bankruptcy protection the record of your filing will stay on your credit report for seven years.
4. An important part of our R Plan service is two credit counselling sessions - during those sessions we will teach you how to create and maintain a monthly budget, rebuild your credit and how to manage credit wisely.
Please call us today at 310-1100 for additional information and to book your free consultation so we can begin the process of assisting you.
Someone I know is going bankrupt. I have been listed on the filing as being owed to and unsecured.
(>$10,000)
I have a receipt for about 1/4 of it. Is there any point in me filling in and returning the form?
(DO I need some kind of lawyer for this?) Or, will it just cost me more in time and effort to get nothing anyways?
Mark, how's the experience coming into a trustee's office for the first time to file for bankruptcy? For some reason, I feel that the moment I step into the office, I will be judged starting with reception. What office are you located?
In order for me to get my discharge from my bankruptcy my trustee wants me to pay over $18000 he knows I'm a single mother and had to file because of illness I can't afford to pay this I have 12 months to make this payment what are my options?
Thank you for your question today. If you have been listed on the filing as being owed funds by a debtor who has filed for bankruptcy protection I recommend that you fill out and submit the the debtor's Trustee a proper Proof of Claim with supporting backup on the debt owed to you or your company. This will allow you to participate in any dividend payout at the end of the bankruptcy process.
If you only have paperwork supporting 1/4 of this amount owing submit what you have and you will be paid out (assuming sufficient funds exist in the estate for the Trustee to do so) a dividend for a percentage of the amount you can provide verification for.
It is always a good idea to submit a proof of claim and there is no need for you to engage the services of a lawyer to complete one - just contact the Trustee listed on the paperwork you were sent and one of the Trustee's staff will walk you through the process of properly filling out the Proof of Claim and submitting it to them. They are there to assist you.
Jake, thank you for your email. At A. Farber & Partners we are here to assist our clients when they are experiencing severe financial distress. In fact, our marketing materials and company philosophy reflect this: "respectful solutions to debt problems." The key word there is "respect" and we would be more than happy to meet with you and discuss, confidentially, your financial difficulties. We are not here to make you feel badly about your financial pressures - we know you are already under stress - but to assist you with the process of alleviating those pressures.
I am usually located at our head office at Sheppard and Leslie. If you require a free consultation please do not hesitate to call us at 310-1100 at any time and our helpful HCD staff will discuss your situation with you.
I am sorry to hear that you are ill and having financial difficulty. The important thing to remember here is that you are receiving relief from the crushing debt that you were burdened with - many people, once they file for protection from their creditors, forget about the huge debt load they had. Please put your situation in perspective against the debt you were burdened with when considering what the Trustee has requested of you. The amount you mention seems to be either a surplus income payment or, more likely, your share of the net equity on a family home or other asset, is this correct? Since you've provided so little information all I can recommend you do is to get in touch with your Trustee directly to arrange a face to face meeting with him or her to discuss this financial payment as soon as possible. Hopefully you can work out a payment plan with your Trustee that will be manageable by you.
Hello
I am having financial difficulty and believe bankruptcy would be my only way out. I have a question
What would happen to my home. The deed is registered 90%to my dad and 10%to me. Also what would happen to my son's RESP?
Thank you
I've heard that on Sept 18, 2009, the consumer proposal limit will be increased to $250,000. Is this correct?
I've heard that as of Sept 18, 2009the limit for consumer proposals will increase from $75,000 to $250,000. Is that true?
i filed bankruptcy in 2004, due to my own stupidity at the time i did not complete any of my conditions ie:credit counselling, and was never to my knowledge discharged. i have not used or had any type of credit since besides a secured credit card with a low limit. i have no idea whats on my credit report and am afraid to find out. what do i need to do to clean this mess up. by the way i now live in alberta
Hi I was wondering I ahd a car repoed and i owe $7000.00 the collection company is harassing me even though I'm making $50.00 /month payment. It's all I can sfford right now. I did miss 2 months (July and August) because I thought I had sent checks, to cover those months and I hhadn't. now she is callong me calling me names and saying that what I'm paying is not acceptable. Tell me if I'm making an attempt can they still harrass?? Thank you
Can a person who has been convicted of fraud and has incurred debts defending the conviction, file for bankruptcy?
I have debt of about $50,000 (credit cards and a small loan). I am considering a cosumer proposal. I have an older townhouse which I have never missed a mortgage payment on in the seven years I have lived in it. I cannot keep up the payments on my cards. I live alone and my income is $38,000 per year. I don't want to lose my home. Is it protected in a consumer proposal?
My wife and I are in dept individually and as we are married (30 + Years) I gues the debts would be considered shared (personal debt.)
We should probably file for bankrcuptcy due to the size of the dept $200,000
My wife and I are also disabled and our only income is disability income.
I have reason to believe that within the next (2) months, I will be receiving about $4,000 monthly, increasing.
At that time we would of course come off disability.
My (2) questions are as follows:
I am also the owner and CEO of a
non-operational Fully Incorporated Company and my wife is a Director and Shareholder.
The purpose of the Corporation is for circumstances like this, it waas created for financial transactions.
If this actually happens and my wife and I have "NOT" declared personal bankruptcy what would happen if that $4,000 month went into the Corporation.
Would that $4,000 be protected from creditors?
The Corporation has no depts or, assets and is not involved with our personal debts in any manner.
What would happen with that $4,000 month going into the Corporation if my wife and I "DID" declare bankruptcy?
Thank you for your kind assistance
We are about to go bankrupt. However, there may be money coming to us from a lawsuit we have already in process due to the death of our child in a car accident. If we do get any money from this, does it go straight to the trustee?
I have been trying to avoid bankruptcy for a long time, but a CC company has now passed the account over to a law firm who has issued a "copy of the draft Statement of Claim which may be issued and served on you"
The Statement of Claim draft that they included is 4 pages long and presumably will be what I will be served if I don't pay or make arrangements.
I have told their collection agencies before that:
1/ I have cancer and am about to be scheduled for a second surgery.
2/ I am unemployed.
3/ I have NO assets - I rent a basement suite, have a very old car and no savings or RRSP etc. anymore.
4/ My husband is just turning 65 and is self-employed but only part time. I am very weak and in pain so he must help me in the house and to get to appointments etc. We have no other source of income except his part time handyman work and soon his old age pension.
Up until recently we were hoping that I would be able to go back to work so I would be able to manage to take care of the debts-even to make a proposal, but it won't be possible since I now have a recurrence of the cancer and need surgery again. Due to our health and other disastrous occurrences like a house fire, a flood, family deaths, we have used up the assets we did have and have accumulated several debts, and have not filed income taxes during these last years of troubles.
We have concluded that the only thing to do is bankruptcy.
I have explained all this to the companies. I know they can't wait forever for us to get the bankruptcy organized. I don't know how soon I will be able to file bankruptcy and in the meantime I have no money to make normal payments. If they take me to court, there is nothing to get out of me anyway-I have no employer so they can't garnishee. If I survive the surgery, I may not be around that long after either. I don't mean to sound all doom and gloom, but I wonder if they can go after our children too.
This law firm is saying that I must make a payment to stop legal action. Is this true? Is it even advisable? If I make a payment of even $50 to them, what would that do? I just need to know mainly if I must somehow come up with a payment and how little would they accept? I mean LITTLE. And how long would that get the legal action stopped? 1 month? If I make a small payment will that be detrimental to the bankruptcy process or better for it?
I wish now that we hadn't tried so hard to hold out on bankruptcy in hopes of being able to recover. If we had done it when I was better, it would be done now.
Thanks for your advice.
What happens to a consumer proposal upon death? Is the estate responsible for the debt?
Hi there,
I am considering bankruptcy but I have some money in a locked in RRSP that I can get released in a couple of months based on property tax arrears. If I start the bankruptcy proceedings before getting this money unlocked will I be able to say what it is going towards or will it be determined for me and possibly go to unsecured creditors. Is it best to get the money unlocked, pay what I want it to pay and then proceed?
Thank you for your question about what would happen to your home and your son's RESP in a bankruptcy scenario.
1. The home is owned 90% by your father and 10% by you. We would calculate the value of the home and the amount of equity available to your creditors and 10% of that amount, if any, would need to be contributed to you over time for the benefit of your unsecured creditors if you wish to retain title to the home.
2. RESPs become the property of the estate in a bankruptcy scenario. We could write to the RESP company to request that they liquidate the RESPs and turn over the proceeds to us for the benefit of your unsecured creditors.
I recommend we talk further to see what the full ramifications of a bankruptcy might be for you. You must have lots of questions. Please contact us at any time at 310-1100 to arrange a no-obligation, free initial consultation with one of our managers.
Yes, you are correct. On September 18th, 2009 a series of BIA Amendments came into force. One of these amendments was to consumer proposals. Previously a consumer proposal had a maximum threshold of $75,000 CAD. This has now been increased considerably to a maximum threshold of $250,000 CAD.
Robert, thank you for your question. Getting your discharge from bankruptcy would allow you to once again obtain proper credit and rebuild your credit rating. It is essential that you move quickly to arrange for your discharge.
Step One: Contact your original Trustee to find out what duties are still outstanding, and arrange to complete these duties as soon as possible
Step Two: Contact TransUnion and Equifax Canada (www.equifax.ca) to obtain free copy of your credit report so you can see what is listed on it.
Once you've completed all of your outstanding duties, and received your discharge from your original Trustee, you can submit your discharge paperwork to the 2 creditor bureaus so they can update your status.
Then you can arrange for a secured credit card with a small amount of credit on it and begin using it responsibly to rebuild your credit as quickly as possible.
Good luck with this process!
Dealing with collection agencies can often be a stressful process. I'm sorry to hear you had your vehicle repossessed!
Once the vehicle is in the possession of the lender it can be sold or auctioned off and the shortfall (if any remains) between what you owe the lender and what they received by auctioning or selling the vehicle is your responsibility to pay.
If the collection agency feels you have not been providing them with a sufficient amount to pay down the debt over time they can contact you and request larger payments or a lump sum payment. But they MUST do so within the boundaries of the Ontario Collection Agency Act, which was revised in 2008.
Please visit this webpage for further details on what collection agencies can, and cannot, do to obtain payment from you:
http://www.gov.on.ca/mgs/en/ConsProt/STEL02_045978.html
If your vehicle has been sold or auctioned, and you are on the hook for only the shortfall amount you can include this as an unsecured debt in a bankruptcy filing or consumer proposal. If you would like to learn more about your rights and your options, please contact us at 310-1100 to arrange a no-obligation, free initial consultation with one of our managers.
Thank you for your question about debts in respect to a fraud conviction.
Since you do not specify what type of fraud conviction you have received it is difficult for me to answer your question on this blog. I strongly recommend you contact our offices toll-free at 310-1100 to set up a no-obligation initial consultation to discuss this sensitive issue.
Some legal judgement are not dischargeable (re: Section 168 of the Bankruptcy and Insolvency Act) but I would need more information about your specific situation in order for me to give you a proper answer.
A consumer proposal is an alternative to bankruptcy protection in that your assets do not vest with the Trustee. Rather, a consumer proposal should be constructed so that it offers the unsecured creditors more than they would receive from a bankruptcy filing. We would calculate the equity in your share of your home, and any surplus income on your yearly net income, and recommend a proposal that offers more than that total amount so that your creditors will see you are prepared to settle your debts in a responsible manner.
I would recommend giving us a call toll-free at 310-1100 to set up a no-obligation initial consultation where we would be happy to meet with you and discuss all the implications of filing a consumer proposal and specifically how this relates to your home and income.
Is there a maximum % of earnings that CRA can garnishee%
When you file for bankruptcy - do they send someone to your house to evalutate your assets to see what you have and then take it away? What about firearms - are you allowed to keep them in a bankruptcy? If you own a house and have decided to move out and rent - who do you give the keys to the house?
I haven't paid my mortgage in 4 months due to job loss. In Ontario, Can the bank come to your door and change the locks and kick you out? If so, what happens to your belongings?
I have registered retirement that is now in the form of a RIF. Is that subject to seizure if I go bankrupt
I have Universal Life Policy that has a minimal cash surrender value and a Critical Illness policy, do I have to give up my policies.
I have Universal Life Policy that has a minimal cash surrender value and a Critical Illness policy, do I have to give up my policies.
Hello, Jeremy
Back in "Aug of 2008" I filed bankruptcy with Donna Leitch . I was told that two tax return's would be done(per & post). To this day they have not been done!!!
Cheque's have been cashed for the fee's of bankruptcy and I would like to know what is the time line
is for a trustee to complet this,
After many phone call to her Office and been told that
I'M BUSY !!
This is not fair or Right,
Do I have rights about this ??
Gavin Mcguigan
I am behind in my bankruptcy paymnts and i think i am past my 9 mths i cant afford to catch them up as iam not working i know everything will be sent back to my creditors what are the next steps for me to take as i need the help of my bankruptcy to get rid of my debts i cant afford life without it ...can i file again if that happens??? i am not sure what to do next
Hello,
I recently finished university and am in tons of debt. I was on the shortlist for a job in another city, so I decided to get a car to prepare myself for the move. However the job didn't pan out and I'm left with credit card debt, student loans and a car....with no job. Can I declare bankruptcy?
My ex-husband declared bankruptcy in Ontario while he still owes me substantial amount of the child support and court cost. I understand bankruptcy does not relief him from the arrears and the on-going child support but what will happen to the court costs? Can I get the court costs he owes me from his asset? As there are other creditors like banks, how the trustee would decide which debt has the priority over the others? After I receive notice from the trustee how long do I have to respond to the trustee to show how much of the debts is for child support and how much of it is for court cost
I have approx $10K of debit in Canada. I am a Canadian citizen and have recently been laid off. I have no mortgage or any real belongings aside from my car.
However I bought my car a few years ago in Florida where my family lives. My parents took out a line of credit to give me money for the car. If I were to declare bankruptcy what would happen to my car? The book value is approx $14K, but I owe $12K on the car still. (To my parents)
I have been served in a statement of claim. IF I lose this case, judgment against me could be over $200,000. The home myn wife and I live in is in her name. All investments are in her name, and have been since long before being served. My personal debts are $30,000+-. My bank account is minimal. Vehicle worth about $1500. have a few personal possessions and a small amount of construction tools. No investments. Suggestions needed? Is bankruptcy a viable option? thank you, harley G.
I have a secured personal line of credit. How is that affected if I claim bankruptcy? Does it ever get wiped out?
HOW LONG A PROPOSAL STAY IN THE CREDIT BUREAU?
Where can I go to get an unsecured credit card or line of credit? I was discharged from bankruptcy 2 years ago and I need some kind of credit to operate as a sub-contractor.
Thanks
Hi.
I have been trying unsuccessfully for years to get my husband to go bankrupt. His lauds his credit score like it's some magical grail, which is to say, all bill payments are being met, and on time, but just barely. We're living paycheck to paycheck and we've been doing so for years due to circumstances beyond our control (sick kids, etc).
I just added up the CC and high interest debt: $144,000
This doesn't take into account 2 leased vehicles, my outstanding student loan, debenture payments, insurance or mortgage payments.
My husband is working in the states and it is our intention to move there in the next few months. I am sick and tired of the debt, and I do mean SICK. Oh, I forgot to say that the take home pay after paying the bills leaves just enough for food, and household bills. We're not living large.
And the take home pay hasn't had taxes deducted!! We're going to get slammed with taxes once he files, and that's it-we will NOT be able to pay.
It's time to consider bankruptcy and I think I have my husband convinced but he wants us to move to the states first and buy a home there. The equity in the home would be small, just like the equity in our home here.
We want to start building credit in the states, and I DO want to go bankrupt on our canadian credit card debt.
Is this possible living in the states?
Thanks for your time, and help.
My wages have been garnisheed at 25% by CRA for back taxes, and I have been struggling along under those conditions. My wife is in a wheelchair, I work part time in a low paying job, and we are consistently about $300 short at the end of the month. Our whole effort goes into paying our mortgage and not losing our one-room house. Now I've received a letter from CRA saying they are increasing the garnished amount to 50%, and they won't return my calls. That means my entire take-home salary will average less than $500 a month. Would personal bankruptcy be my best option? We just don't make enough live - it's not a credit card or overspending issue: CRA would be our only debt.
On February,2009 I filed for bankruptcy.My ex spouse lawyer is on the list as one of my creditors for $ 8000.00. The lawyer is still claiming the amount,and it went collectible through the family responsibility office,can she claim for it while i am in bankruptcy? or is she breaking the law for bankruptcy. Can i sue her for creditor harassment and financial hardship?
Thank you for your question about CRA garnishments. According to our experiences with our debtors, garnishments can range in percentage from 30% (of gross earnings) to a maximum of 100% (of gross earnings) depending on the debtor's situation.
The best way to stop any garnishment dead in its tracks is to file for protection from your creditors through a licensed Trustee in Bankruptcy. If you feel we could be of assistance, please call us at any time at 310-1100 (from any area code near our 30 offices across Ontario) to set up a free consultation.
Thank you for your questions about assets - essentially, a debtor is required to list and swear under oath to the accuracy of all assets that he or she possesses either in Canada or worldwide.
In the case of your firearms, these would need to be evaluated by a professional firearms dealer or reseller and a letter of opinion of the value of the firearms provided to the Trustee. This amount would then be listed on your Statement of Affairs. Your are allowed up to $5,650.00 of personal effects such as firearms. Any value over that amount would need to paid out to the estate for the benefit of your unsecured creditors.
Typically, Trustees do not visit the homes or debtors to assess their belongings - by swearing under oath in the presence of a Trustee/Commissioner of Oaths you would be required to be honest and forthright with your creditors as to the value of your household goods and personal effects. The documents are legal documents filed with the Bankruptcy Court of the Federal Government of Canada.
As for your question about your home, I assume your intention is to walk away from the ownership of the property? In that case you would notify the first mortgage holder of your intention to move out, hand over the keys to them and move out. They would then take possession of the property, change the locks and list the property for resale. Any shortfall owing (i.e. the home sells for less than you owe) would be addeded to your bankruptcy filing.
We can assist you with explaining in greater detail how these processes work at your free consultation. Please call us at 310-1100 at any time to set up a meeting.
I'm sorry to hear that you've been experiencing job loss and related stress.
Being behind on your mortgage payments for such a long period of time can certainly result in repossession of your home by your mortgage holder (in this case, your bank).
Normally you would be given a series of warning letters and then notified that the bank would be seizing the asset (the home). If you have not moved out by the deadline date th bank has the right to change the locks and then place all of your household belongings in storage -- they would notify you of this action and you would most probably have a specified period of time to retrieve them from the storage facility before they would be sold or liquidated by the bank.
It sounds like your situation is quite dire - I recommend giving us a call as soon as possible to discuss your situation and how we can best assist you. Please call 310-1100 from any area code near one of our 30 offices to book a free consultation.
Under the BIA Amendments that came into force on September 18th, 2009, a RIF for which there have been no contributions within the past 12 months would be exempt from seizure if you go bankrupt.
We recommend booking a free consultation if you'd like further information about the insolvency process. Just call us at 310-1100 and we will set up an appointment for you at one of our 30 conveniently-located offices across the GTA.
Thank you for your question about your Universal Life insurance policy and your Critical Illness policy.
Universal Life policies normally have a term life portion (i.e. a cheque is only issued upon the death of the holder of the policy) and a whole life portion (cash value accrual over time). If your Universal Life policy has a preferred beneficiary (i.e. spouse, parent or child) then it is exempt from seizure. If the beneficiary is your estate then the full cash value of the policy is available to your creditors.
Critical Illness Insurance only turns into as cash value when utilized upon diagnosis of one of the critical illnesses the policy covers. Therefore it would not normally be affected by an insolvency filing.
I have been separated for 3 years, but my mortgage is still in both our names. I am still living in the house and paying the mortgage. My ex is talking about claiming bankruptcy. Is this going to affect me in any way? The bank advised me once before that I technically do not make enough money to have her name removed from the mortgage, therefore that is not an option at this point.
Can I still apply for bankruptcy if my parents are co-signor? I understand that they will have to repay the debt, but will my bankruptcy effect their credit?
Also, I understand that you cannot apply for any credit for 7 years after a personal bankruptcy. Is that true? Will my personal bankruptcy affect any credit my spouse applies for?
On February,2009 I filed for bankruptcy.My ex spouse lawyer is on the list as one of my creditors for $ 8000.00. The lawyer is still claiming the amount,and it went collectible through the family responsibility office,can she claim for it while i am in bankruptcy? or is she breaking the law for bankruptcy. Can i sue her for creditor harassment and financial hardship?
My mom currently resides in a nursing home due to her inability to care for herself.
To date I'm in arreas for$30,000
can this amount be claim under Bankruptcy.
p.s.Her monthly payments are now being taken out of her pension.GIS&OAS. THROUGH AUTOMATIC WITHDRAWAL.
The arreas amount$30,000.is only compounding with intrest.
I live In Ontario canada,my bills and my court settlement to my ex- wife is in excess of $250000 dollars.I have about 100000 dollars in RRSP.will I have to give to her and my creditors if i file for bankruptcy?My ex did not ask for the RRSP in the settlement either
Question with two scenarios:
1. Declared bankruptcy Oct 2008 (Ontario); provided Trustee with items required for pre-bankruptcy income tax return (January 1st to date of bankruptcy) and subsequently provided information for income tax return for 2008 (complete year). If one rceives Absolute Discharge in February 2010. Does the individual(the bankrupt)file the income tax return for 2009 or does the Trustee do this? Who gets refund, if any?
If not discharged in February 2010does the individual(the bankrupt)file the income tax return for 2009or does the Trustee do this? Who gets refund, if any?
After you claim bankruptcy, can you have a savings account to start over? If you successfully save after claiming bankruptcy but before a discharge, can the money be taken for creditors? And if family gives you some money for savings during a bankruptcy, after filing, can you save this without it being taken towards creditors?
I have some ESPP company stocks in an u.s account that I have collected over the past six years is that considered same as DPSP? Are they exempt?
Hi,
I am thinking of filing for bankrupcy. I currently rent a home. It's just my baby and I here. I am thinking of having my parents move in with me for awhile. My mom does not work but my dad does. I will not ask them for rent money-but just that they pay their groceries and perhaps some of the bills--water/gas etc. Will their living here for a short time affect anything at all? Thanks.
Filed for Bankruptcy January 2009. Discharged October 2009. It is now March 2010 and the Trustee is only now cashing in My son's RESP. Is this normal, such a big time delay. I thought it would have taken place during the 9 month bankruptcy period. Please comment
I have locked in investments, if I declare bankruptcy will these investments be used to pay my debt. They won't release the monies as I need it for a legal matter (lawyer fees)this is basically the on debt I have $20,000
Thank you for your question about separation and potential bankruptcy filing of your ex-spouse. There are a number of issues to be concerned about here:
1. The fact that you and your ex-spouse are separated but still reside in the same house could be problematic - normally she would be required to prove the monthly net income from all residents of the home. You can refuse to provide such information on her bankruptcy filing but it will affect her calculation percentage (it will go up). Her Trustee can provide her with more information on this issue.
2. If there is equity in the home and she wants to retain her share of the ownership she will have to negotiate a settlement offer with her creditors for her share of the equity. This is done through her Trustee as well. Your share of the equity will not be affected by this.
You cannot stop your ex from filing but you can protect your interests and assets when she does file.
Please also be aware that if you have joint debts with your ex-spouse your creditors will most likely pursue you for the amounts owing in the event that your ex files for bankruptcy protection.
If you require any advice, we do offer a free consultation at our 30 offices across Ontario. just call 310-1100 to set up an appointment to meet with one of our insolvency experts.
Thank you for your excellent questions.
Firstly, you CAN still apply for bankruptcy if your parents are co-signers but they will be responsible for the full debt once you file. As long as they deal with the debt promptly by making regular payments to the creditor the joint debt was issued by their credit ratings should not be affected by your actions. It might be wise for one of them to contact the creditor once you file to confirm that the debt will be paid by them.
Once your bankruptcy is discharged (normally 9-10 months after filing if no opposition and no surplus income or other issues) you can apply for new credit. Many bankrupts have new credit in place within a year of filing. This might be as simple as a small RRSP loan or a secured credit card.
Normally your spouse would not be affected by your bankruptcy filing. However, if your spouse and you go to jointly apply for a loan, line of credit or mortgage the percentage of interest charged could be higher due to your credit history. Sometimes it's easier for just the spouse with the better credit rating to apply for new credit rather than jointly applying.
Legal fees are considered unsecured debts. Unless the fees were in respect to child or spousal support owing, your ex-spouse's lawyer should not be able to use the FRO as a vehicle for recouping them. However, we are not lawyers so you should obtain independent legal advice on this issue from your own lawyer prior to contacting the FRO to request the debt be removed from your account with them.
As for being able to sue your ex-spouse's lawyer for creditor harassment and financial hardship, once again I would recommend that you obtain some independent legal advice on this issue.
Thank you for your questions regarding your mother and her residence in a nursing home.
Following the amendments made to the Bankruptcy Insolvency Act (BIA) on September 18th, 2009, a creditor cannot terminate a contract with a debtor simply because a bankruptcy has been filed.
This ruling applies primarily to such things as utilities, car financing, mortgages on homes, etc.
The question here is: WHO is the debtor? You or your mother? Did you personally guarantee her debt to the nursing home? If so, you should be able to have that debt discharged in a bankruptcy filing. However, if the debt is in both your name and her name it would mean both of you have to file.
I would strongly recommend soliciting some assistance on this issue from an independent authority, such as a Provincial social worker or social action agency specializing in caregiver and senior citizen issues.
You also need to ask yourself about what might happen in the future. Yes, you may be able to resolve the existing debt to the nursing home but what about debt incurred in the future? If nothing changes financially for you or your mother then new debt will be accrued.
An alternative might be to search out more affordable accomodations for your parent so that you, and she, don't accrue additional debt down the road. Ideally, the goal would be for her monthly pensions to cover the majority of her living costs.
A relative has declared bankruptcy and was working with a trustee, but after a series of layoffs, has fallen behind on his payments and is not able to pay anything at the moment. The trustee says that he will not longer represent him unless he comes up with $10,000. Does that mean that they have withdrawn his application for bankruptcy or is he still considered to be in the process of filing bankruptcy? He was told that his creditors can now try to collect from him.
Hello, my questions is. I own a house with some one and we have been seperated for 6 months now. We own a house together and he lives there but i don't. Iam still making my half of the morrgage payments but finding it very hard. I am staying in a house that my parents own and can't pay them any rent. Can i claim bankruptcy to get out of this house. He wont sell it because hes not ready, but i am.
I believe I am in a situation of personal bankruptcy. Although I have lived in Ontario for the past 12+ years I will be relocating to another province for work and family reasons. Where should I file for bankruptcy and is there any difference between filing for bankruptcy in Ontario or any other province?
I believe I am in a situation of personal bankruptcy. Although I have lived in Ontario for the past 12+ years I will be relocating to another province for work and family reasons. Where should I file for bankruptcy and is there any difference between Ontario and other provinces?
I'm divorced and currently in debt and not able to pay all that is required of me. I'm on long term disibility...the home that was bought with my ex husband has just been changed over in his name recently...but has been signed over to him by me in a sepration agreement a few years ago. The house has a basement appt. and that is where me and my kids are living...I was wondering how will this affect me claiming bankruptcy. I am paying rent to him for living here. Any help would be great.
My common law spouse is wanting to claim bankruptcy on a government debt (payroll for a business). My name was not on the business can they touch my home (the deed is in my name only- but he is the guarantor on the mortgage)?
If you are ordered by the rental tribunal (landlord tenant board) to pay arrears to a company/building and then you file for bankruptcy can they still garnish your wages AFTER you file? Does it matter if you file before or after the order is made? Is there any way they can contest it? Is there any way to protect myself through bankruptcy?
James, thank you for your question about RRSPs and bankruptcy filings. In Ontario your creditors would be entitled to any RRSP contributions you made within the 12 months prior to the date you file for bankruptcy protection. Anything contributed prior to that time period would be yours to keep.
I cannot comment on the divorce court settlement however, so I am not sure what might happen to your RRSPs in that situation.
If you do need some further assistance please do not hesitate to contact us at 310-1100 any time and we can arrange a confidential consultation for you at an office located close to where you live or work.
Thank you for your question about tax filings and bankruptcy. Normally the trustee would file 2 returns for you during the year of bankruptcy protection: A "Pre-return" and a "Post-return". The Pre return would be from the first of that year until the date of filing, the Post would be from that date until the end of the calendar year. You would then file your own tax return the subsequent year. Any tax return filed after the bankruptcy calendar year would result in a refund or a payment and you would be able to retain any refunds to you or be responsible for any payments owing by you to the CRA.
Any funds you amass in a savings vehicle while you are under protection from your creditors could theoretically be seized by the estate for the benefit of your unsecured creditors. Once you are discharged from your debts, and the protection lifted (as it is no longer needed) you can open as many TFSAs, RRSP and savings accounts as you like. But it is recommended you not set up such savings vehicles during the bankruptcy period.
hello
suppose my parents stand as cosigners for my student loans will they have to loose everything if i cant pay my loans and need to declare bankruptcy?
Thank you for your question about having your parents move in with you to share expenses while you file for bankruptcy protection.
The BIA is very specific on this issue: Your Statement of Affairs must include the income for all members of your household. In your case this would include your parents. So if they have sizable net income each month it could push you into a surplus income situation where you would have to contribute 50% of any overage in household income to your estate.
So it is advisable that you review your household income, including any seasonal increases or decreases, prior to taking in your parents.
Although many bankruptcies last only nine months (first-time bankrupts, no surplus income, no opposition) and this is common knowledge, what most people do not realize is that the Trustee and the Administration Team often continue working on the file for one to two years after that time period.
All assets must be realized upon, if they can be (such as your son's RESP) and this can be a very time-consuming process. Once the administration is complete, a Receipts and Disbursements report is compiled, the creditors who participated in the bankruptcy are paid a dividend (if one is available to them) and the Trustee requests to be discharged from the estate by the Court.
The short answer is: The 9-month bankruptcy period is just one part of the process -- the administration of the estate can continue long after the debtor is discharged.
Thank you for your question about your locked-in funds. The rule is simple: If you could gain access to these funds prior to retirement, then the Trustee can usually gain access to them as well, and would write to the fund requesting confirmation of this and to ask the fund to turn over the proceeds to the estate.
The specific situation you mention regarding legal funds may require more discussion - if you feel it would be helpful, please call us anytime at 310-1100 to set up a free consultation.
The Trustee has probably, in this case, petitioned the Court to be discharged from the bankruptcy. This means two things for your relative:
(1) The bankruptcy will not be discharged until he pays the Trustee the balance owing, or works out a settlement with the Trustee at some point in time, and
(2) Once the Trustee is discharged the creditors can once again attempt to collect on the debts owing to them by your relative.
The best solution to this problem would be for your relative to approach the Trustee, make arrangements to pay the balance owing to them off over a period of time, and then be properly discharged, which makes the debts go away permanently and prevents the creditors from further harassing your relative.
This sounds more like a question for your Family Law lawyer than a Trustee. Since we are not lawyers I will strongly recommend you speak with someone who can provide you with legal advice and find a solution to the house situation.
In respect to a bankruptcy filing, if there is any equity in the home you would be responsible for paying your 50% share of it to the estate. Or you could surrender your ownership of your share of the home to the estate and the Trustee would go "on title" instead. Your former spouse would not have any control over this arrangement but could purchase your share of the equity owing to the estate to retain 100% ownership of the home once the equity was paid.
This can often be a complicated situation so we strongly recommend a free consultation if you'd like to explore any of the above options. Please call 310-1100 at any time to arrange a meeting at an office close to where you live.
If you are planning to relocate to another province, and plan on doing so soon, we recommend you file your proceedings in the new province, as you will be required to attend 2 counselling sessions and may also have to appear for a meeting of creditors in some situations. Being close to your Trustee's office would then be most important.
Is there a specific amount of time you ned to wait between bankruptcies? I filed in 2005 and was dischared in 2008.
What are the implications of re-registering a jointly owned home into the wife's name only, prior to the husband declaring personal bankruptcy??
I am filing for bankruptcy and I just had a car accident I may get a settlement from the insurance company in a year or two what will happen with the settlement that I may get will they take the money I owed off it?
I am filing for bankruptcy and I just had a car accident I may get a settlement from the insurance company in a year or two what will happen with the settlement that I may get will they take the money I owed off it?
Hi! I filed for bankruptcy in 2007, do I still have to keep all of my records before then for 7 years still....moving and don"t want to have to take boxes of receipts, bills, etc...if I don't have to.
Thanks!
HI
My husband and I have been separated for 2 years. The marital home has been in my name only for 15 years as he was self employed but he will be entitled to half the equity in 3 years as per a separation agreement and family law. He has now indicated that he is filing bankruptcy. How does this affect my home and the equity there? I am not sure that he has even told the trustee that he has this asset as it is his pattern of behaviour to be less than truthful. Is this fraud? When the house is sold in 3 years, can the trustee or creditors come back on him for his share of the home to pay his debts? Thank you so much for your assistance!
L
Thank you for your question about the former matrimonial home and its transfer to your ex-spouse.
Essentially, that transfer would be suspect if you ever filed bankruptcy, especially if you could not provide paperwork to detail the legal transfer of the asset to your ex-spouse. Did money change hands? Does the property have any equity in it? Was it transferred into his name less than one year ago? All issues of concern for the Trustee and therefore the creditors.
When swearing under oath to the legitimacy of the information you have provided on your Statement of Affairs you would be required to detail the house transfer if it occurred within the past 5 years. You may also have to contribute the value that you might have obtained from the transfer to your creditors in an insolvency proceeding.
One other issue of concern: You still reside in the same home as your ex-spouse. This may elicit some suspicion from your creditors, and from CRA as well. Proceed with caution!
If you think you can benefit from a free consultation with us, please call our hotline at 310-1100 anytime to set up a meeting with one of our consultants.
Thank you for your question about your common law spouse and his desire to file a bankruptcy.
Payroll debts are considered "deemed trusts" - in other words, he was required to pay those funds to his workers for the hours they toiled for the business. Plus, he was required to hold back Canada Pension and income taxes on behalf of his workers. These would be difficult to discharge in a bankruptcy proceeding and CRA would examine such debts closely.
Your home belongs to you, and as long as it was not transferred solely into your name within the past five years it should be safe from his creditors.
Once you file for bankruptcy protection and the Federal Government issues an estate/court number for your filing, a "wall" of legislation is erected between you and your creditors. All legal proceedings grind to a halt at that moment. Therefore, no garnishment actions can be taken once the protection is in place for you.
It does not matter if you file before the legal action is initiated or after -- the protection, once in place, does just that, it "protects" you from your creditors and the courts.
The only option a creditor might have is to oppose your discharge at the time it comes up (at the end of the process). This could delay the date of your discharge but may not affect you financially otherwise.
Once discharged, the debts are reduced to zero and you no longer have to worry about them.
If you feel a free consultation may be of benefit in your case, please do not hesitate to contact our hotline staff at 310-1100 anytime. We'd be happy to set up a free consultation for you at one of our more than 30 offices across Ontario.
Student loan issues are tricky. Here are a few points to consider:
1. If it has been less than 7 years since you finished your program of study, the student loans will NOT be discharged in a bankruptcy.
2. Co-signed student loans are the responsibility of both the debtor and the co-signer. Both are 100% responsible for the loans. So if you do file for protection from your creditors your parents would be on the hook 100% for those loans.
3. In some cases, if you are working in your field of study and have been out of school for more than 7 years, the student loans collections division can STILL oppose your discharge on the grounds that you benefited directly from the student loans to pursue your field of study. This has occurred in numerous cases before the Bankruptcy court recently.
Our recommendation? Arrange a free consultation by calling 310-1100 so we can advise you fully on what can, and cannot, be discharged. You may have numerous other debts that can be dealt with, leaving you with only the student loan debts to pay off, thus providing you with some relief.
Thank you for your question about time limits between insolvency filings. Essentially, if you were discharged from your first insolvency in 2005 you could have requested to be assigned into protection again the following day! That is most unusual, of course, as it would have been extremely unlikely you would have accumulated any new debt by that point.
The simple answer is that there is no specific amount of time you need to wait once discharged. It is more a case of need - if you need the protection it is once again available to you. The Trustee would, of course, conduct a proper assessment of your situation and advise you of all your options. Bankruptcy may NOT be your best solution if you are in need of protection again.
If you feel a free consultation might be helpful to you, please call our hotline staff at 310-1100 to set up a meeting at any of our 30 offices across Ontario. We are here to help you.
Hi there. Your question about reregistering a jointly owned home (i.e. matrimonial home) in one spouse's name prior to the other spouse filing a bankruptcy is one we get frequently here. Please read back through the blog entries for a number of excellent comments on this issue.
The bottom line? Don't do it. The transfer would be considered a Fraudent Coveyance under the Bankruptcy Insolvency Act, especially since you knew you were insolvent and would be filing for protection from your creditors. This would be construed as you hiding an asset of value from your creditors as they would rightfully gain some benefit from it if you filed for protection and it was still partially in your name.
Need further advice? Please call us at 310-1100 to arrange a free consultation at one of our more than 30 offices across Ontario.
Settlements from car accidents may come under the heading of "pain and suffering" and therefore may be partially or completely exempt from seizure by your creditors if you file for protection.
We would want to take a look at your entire situation before giving you any further advice as each situation is different.
Thank you for your question about record keeping and the seven-year period. If I understand your question correctly you may have mixed up the 7 years your credit history following the date of bankruptcy remains on your credit bureau report with what needs to be physically retained by you for income tax purposes (as recommended by CRA).
It is always advisable to keep a past history, organized and filed correctly, of financial transactions, income tax returns, etc. CRA could request an audit of your returns at a later date, whether you file for protection from your creditors or not, so keeping good records should be part of every Canadian's proper financial planning.
Anything you don't need for tax purposes (like old receipts, utility bills older than 5 years, etc) should be shredded rather than just thrown away to avoid identity theft.
However, if you need 100% clarification on what CRA does want you to keep, and for how long, we recommend you visit their web site or contact them by phone.
Great question! We seem to be getting a lot of enquiries about matrimonial homes and separation and divorce issues lately -- a fallout from our nasty recession no doubt!
There are 2 possible ways to handle this situation:
1. You could get in touch with your ex-spouse's Trustee and advise them of the prospective equity windfall for him on the property. In three years' time the creditors would be able to divide up the equity available between them.
2. You could also negotiate directly with the Trustee to "buy out" your ex-spouse's share of the home equity before the three year mark. The creditors would be happier because they'd get their money faster if you could arrange this.
Your ex-spouse's behavior and non-disclosure is his problem ultimately. If he swore under oath on his Statement of Affairs and failed to disclose the house equity then he could face serious consequences. His Trustee can advise you further on that issue.
My questions are how much does a consumer proposal cost and will I be able to keep my truck and townhouse? as they are with the same bank as other loans that I cannot afford
My wife and I have a mortgage and a line of credit in both our names.
If I declared personal bankruptcy do we lose our house.
Value of the house approx. $210,000
Mortgage is $98,000 and line of credit is $42,000
I am getting a divorce and the court is saying I have to pay out my ex a large sum of $ the equity in the house and a pension pay out. As well I have to pay him alimony pmts. I cannot afford all of these pmts and see bankruptcy in my future. If the court orders me to pay out the equity of the home and pension does this make my ex a creditor and if I do have to file bankruptcy does this debt go away? Also, if this debt goes away in bankruptcy does that leave my pension intact if it was included in the debt? I believe I will still have to pay alimony in the event of a bankruptcy? I do not want to file for bankruptcy but my ex refuses to work out an arrangement to get the portion of the pension at the time of retirement therefore, it is going to become unaffordable to pay all of that and have food on the table.
Hi, I've been separated for almost 2 yrs and my husband is filing for bankruptcy. Am I responsible for any debt that we have together? There is a personal line of credit as well as a business line of credit? ALSO our home is in both our names, when he files will I lose the house??
Thank you for taking the time to help me.
My wife and I have both declared bankruptcy earlier this year. We each have term life policies naming the surving spouse as beneficiary. If either of us die before being discharged are the benefits subject to seizure by the trustee? If so, are we able to name our kids (age 1 and 3) as beneficiaries so as to avoid seizure? The purpose of the insurance has always been to provide income for their care should one of us die and I'm worried there won't be anything for them if I pass away.
will bankruptcy eliminate a loan with the federal government?
Me and my spouse have old debts that I had been trying to deal with through debt pooling. I do not like the company so I cancelled it. We just started a small business and just got a loan for a car. Can we file bankruptcy?
I have recently filed for bankruptcy (April 2010) but am now a student attending University. OSAP has declined my appeal for funding but the University has reviewed my situation and is considering a bursary of $3000. Is this something that I will have to declare as earnings?
I am a Canadian citizen but have relocated out of the country. I was hoping to work and be able to pay back my debts, but they are now overwhelming and I am struggling to support myself and my daughter. I have done some research and feel that bankruptcy is the best option at this time. However, is it possible to make this happen as I am out of the country and have no plans (or financial means) to return?
If I declared bankruptcy in Dec. 2004 and didn't fulfill all of my obligations (ie: the credit councilling sessions conflicted with my work schedule and I was unable to attend), would the courts till have granted a discharge? I attempted to open a bank account at one of my former creditors and all kinds of bells and whistles started going off, even though the debt on the screen said that it was written off. This leads me to believe that there was some form of closure put to my former debts. Am I correct?
Hi
If I have huge debts on my credit cards, bankruptcy or any proposal is not an option for me at this moment, and I will not pay my debts back, what can happen to me in the worst scenario?
I do not own anything, so if banks take me to the court, they will not get any money from me anyway.
How long can I wait and postpone to fail bankruptcy?
I understand that the purpose for filing for bankruptcy is to give you a new start in life.
My wife and I are both disabled and the only money we get is from Ontario Disability
We are heavily in debt (about $200,000) and we have been to see a Trustee who has fees of about $1,000 +
It appears that we don't have enough money to be able to declare Bankruptcy as we cannot afford the Trustee fees
Do we have any options?
Thank you
If I am unable to pay VISA the $100,000 I owe them, will they be able to force me into personal bankruptcy? Would they be able to touch my property?
Hi, I've been reading different websites that I can claim bankruptcy in the US for my Canadian debt. I did, now the Canadian creditors won't leave me alone. What's my best legal option? Thanks!
Hi Jeremy
I was in bankruptcy and then came out and made a consumer proposal. My former landlord insisted the commercial lease was not covered in the listings of bankruptcy,therefore i was still liable for rent at the premises and is now suing me. Can he still hold me accountable or would the lease have been covered in the bankruptcy proceedings???
I declared bankruptcy in October of 2002 and was released in August of 2003.
I had an Amex LOC that was included in the bankruptcy.
Even though 7 years has passed and my credit on Equifax and TransUnion is clear and good (score is 754), Amex refuses to accept my applcation for a charge card indicating my account is delinquent and that I still owe $6500.
Should this account not have been closed and me released from the debt on my release from bankruptcy? If so, how do I correct the issue with Amex as they do not want to listen to my explanation?
If I am a senior not working, own my house debt free, own a car debt free, can I still claim banruptcy without losing both in the process.
Dan, thank you for your excellent question about the cost of a consumer proposal. Please be aware that it is extremely difficult for any Trustee to quote you a monthly proposal payment amount without first reviewing the following:
1. The value of your assets (your townhouse equity, your truck, any pensions and RRSPs you might have, RRSP value, etc)
2. The size of your debt load (secured and unsecured).
3. Your net household income monthly. This would be your net income plus the net income of any other family members in your home.
Normally a consumer proposal is built upon a percentage of your debt, with surplus income calculated (if applicable) from the net income of the household.
A viable proposal must offer the creditors more than they would receive in a bankruptcy filing, and your cash flow would need to be able to handle a long-term repayment strategy (for example, $200 per month for sixty months is one scenario we see a lot).
Also problematic is your issue of having your secured debts at the same banking institution as your unsecured debts.
And if you have TOO much equity in your home you could be solvent, which means you would not qualify to file a consumer proposal or a bankruptcy. Being "insolvent" is when your total debt load is larger than the value of your assets + your net income monthly.
I hope these answers are helpful to you.
In your case I would strongly recommend a face-to-face discussion with one of our Trustees or administrators. Please give us a call at your convenience to 310-1100 (works from any Southern Ontario area code) and we can set something up for you.
Thank you for your question about your joint debts, specifically your mortgage and your line of credit.
Based upon the rough numbers you've provided:
House valued at $210,000
Line of credit valued at $42,000
Mortgage valued at $98,000
and assuming the line of credit is also secured to the house, you would be left with approximately $70,000 of equity left over.
That means you are not insolvent, and therefore you do not qualify for a consumer proposal or a bankruptcy filing. Being insolvent is when your debt load outweighs the value of your assets.
I do not even know what your monthly income is so cannot comment about that. And if the line of credit is unsecured then the amount of secured debt you have drops even further, leaving you with more equity in your home to utilize to pay down your debts.
I would recommend you speak with your favorite bank manager or a mortgage broker to see if you can utilize the equity in your home to deal with your debt issues. You may be able to borrow against the equity in your home to pay down your line of credit, thus effectively reducing your debt load in the process.
Thank you for your questions about divorce and the distribution of marital assets. While we are not family law specialists (and they would be the folks you want to approach with some of these questions) I can quickly answer a few things for you:
1. Rather than keep the matrimonial home it might be best to sell the property and find rental accomodation for yourself for the time being. Then you won't have to come up with the other half of the home's equity PLUS you will have funds available to pay the pension pay-out
2. Spousal support is NOT dischargeable in a bankruptcy filing. You would be responsible for those payments.
3. Yes, if you filed a bankruptcy the spousal support debt would have to be listed and your ex would become a creditor of your estate, if there was back-alimony owing.
4. I cannot answer your questions about your pension without first reviewing the paperwork. Is it locked in until retirement? Is it accessible now? The answers to those questions would determine how you should proceed, and what impact a bankruptcy would have on your pension.
I would strongly recommend a meeting with your family law legal counsel to iron out some of the issues you've raised in your posting. But I also recommend you give us a call at 310-1100 at your convenience to discuss the other issues with one of our Trustees. A face-to-face meeting at one of our 30 offices across Ontario is warranted so that we can properly review your financial information and assets and give you some answers to your questions.
Thank you for your questions about your ex-spouse's bankruptcy filing and how it might impact you.
Firstly, any joint debts are the responsibility of all parties to the debts to handle. So if your ex-spouse files for bankruptcy protection you would end up being 100% responsible for those joint debts.
If the business line of credit was personally guaranteed by you then it would also be your responsibility to cover if your ex-spouse files.
If your ex-spouse files for bankruptcy he will need to either turn over his share of the equity in your matrimonial home to the Trustee or the Trustee will go "on title" to the home so that when it is sold the estate and his creditors receive a portion.
But if you have children living in the home with you it would be rare for you to be affected directly by your ex-husband's filing in any other way. Just be aware that when the house is sold, your ex-husband's portion of the equity would be turned over to his creditors. Your share of the equity would remain in your hands.
We are not lawyers so any advice I am providing is from the point of view of the Bankruptcy and Insolvency Act and NOT from a legal point of view. I strongly recommend you get some advice directly from your legal counsel on your asset distribution so that you are protected.
Thank you for your question. As gloomy a subject as it is, the death of a bankrupt is something all Trustees have had to grapple with at one time or another.
Since no one has control over death, we can only focus on what would happen to the surviving (albeit bankrupt) spouse.
When someone is under bankruptcy protection and they come into a sum of money through insurance pay-out, inheritance, gift, lottery winning or any other such situation, the funds must be turned over to the Trustee. The Trustee will then distribute the net funds to the participating creditors of the bankrupt's estate. If there is anything left over after all fees and disbursements are accounted for, then the remaining funds would be turned back over to the bankrupt and he or she would be discharged if all other duties have been fullfilled (i.e. attending 2 counseling sessions, providing income statements for the time period required, providing up to date tax information, etc).
As for transferring beneficiaries once a bankruptcy is filed, this would be construed as a form of fraud by your creditors and the funds would be retrieved and distributed to the creditors, as described above.
Will bankruptcy eliminate a loan with the federal government? In many cases, yes it would as most government loans (for example, development loans to start a small business) are underwritten by the government so they guarantee them in the event the borrower is insolvent.
Any unsecured debt, including personal income tax, is dischargeable in most cases in a bankruptcy filing. However there are rules surrounding tax debt and I recommend consulting a Trustee before proceeding further with a bankruptcy filing if this is a situation you find yourself in.
A car loan is a secured debt, and would therefore be outside the bankruptcy or a proposal in most cases.
And starting a small business should not normally prevent anyone from filing for protection from their personal creditors.
You do not mention whether you intend on continuing the business when you are bankrupt? Keep in mind that bankrupt individuals running a business must disclose to their suppliers that they are under protection (for any debt over $500 in size). And bankrupt individuals who run a corporation cannot remain in a directorship position while bankrupt.
I strongly recommend a free consultation with a Trustee specializing in small business issues -- please give us a call at 310-1100 at your convenience so we can set up a free face-to-face confidential consultation for you at an office near where you live or work.
I am sorry to hear that OSAP has declined your appeal for funding. But it is terrific to hear that the university itself will be bestowing a $3,000 bursary on you.
That bursary would not normally be considered an "asset" or "gift" of the estate so you would not normally have to turn it over to your Trustee.
However, you would have to declare it as income during the month(s) you receive it.
Keep in mind also that only YOUR Trustee can determine how best this situation should be handled - while the BIA provides guidelines on such issues another Trustee cannot over-rule your Trustee in respect to the administration of your estate.
My strong recommendation would be for you to speak directly with your own Trustee about this issue and advise him or her that the bursary will be coming into your possession.
If you have been outside Canada for more than a year, and have no plan (or ability) to return over the next few years then it would be most difficult for you to file a bankruptcy in Canada.
I recommend you sit tight and at some time in the future, when you can afford to return to Canada, get in touch with a Trustee at that time and file for protection.
The BIA is very specific about who can, and cannot, file for protection and unless you still have assets (such as a bank account with sufficient funds in it or an RRSP that can be liquidated when you file), a filing without residency is very difficult to accomplish.
And that is before we even begin to discuss the duties of a bankrupt, which include attending counseling sessions (2), submitting monthly income statements to the Trustee, attending a meeting of creditors or OSB-requested meetings as necessary and providing worldwide tax information. Would you be prepared to jump on an airplane and fly back to Canada if the OSB or your Trustee demanded it? It sounds like that would be too difficult for you to accomplish at this time.
When a creditor "writes off" a debt, it has nothing at all to do with a bankruptcy filing. Writing off a debt means the bank has essentially "eaten" the debt and realizes it will not be able to recoup it.
And if you didn't fullfill all of your duties under your bankruptcy, and did not attend the court proceedings, you would have to speak with your Trustee to determine what items are still outstanding and get them completed (i.e. finish paying your fees, attend counseling sessions, provide tax info, provide monthly income reports and any outstanding asset information) before your Trustee or the bankruptcy court will issue a discharge to you.
I never recommend trying to conduct business with a former creditor anyhow, whether you are discharged or not. Despite what may appear on your credit report, creditors themselves keep detailed records of bad debts and would rarely accept you as a client again.
The simple answer is this: there has been no closure to your former debts, and you are still on the hook to complete your duties to the bankruptcy court and your Trustee.
I strongly recommend you call your Trustee as soon as possible to make arrangements to clean up this situation so you can put your debts behind you and get a fresh financial start.
It sounds like you have found yourself in a very difficult situation.
You don't mention whether or not you are working? If you are, one option your creditors have is to go to court and arrange for a garnishment of your wages (i.e. your employer would be ordered by the court to deduct a percentage of your wages and send them to the creditor until the debt is paid in full).
If you are not working (i.e. on social assistance/welfare) you may be what some people call "untouchable" in that a garnishment or asset seizure is not possible. If that is the case there is nothing your creditors can do other than call you, contact any family members they can track down, and mail you demand notices.
Thank you for your question. I am so sorry that your spouse and yourself are going through a difficult time. Yes, filing for bankruptcy is a "fresh start" and as long as you have $1,000 in debt and reside in Canada you have the legal right to file.
But most Trustees are private businesses and also are bound by the rules and regulations of the Bankruptcy Insolvency Act (the BIA) which means they have to incur court fees, filing fees, mailing fees and other associated costs to file a bankruptcy for you. The paperwork alone can normally grow beyond 30 pages and take several hours of staff time to prepare.
If you have never filed for bankruptcy protection before you may qualify for the OSB's Bankruptcy Assistance Program (or BAP) which can provide you with a low-cost bankruptcy by a Trustee assigned by the OSB to volunteer his or her time to prepare and administer your filing for you.
Individuals must meet the following criteria:
•intend to file for personal bankruptcy
•have more personal debts than commercial debts
•have made at least two attempts at finding a trustee
•not be involved in commercial activities
•not be incarcerated
•other criteria may apply
Please email the ISB directly at the following email address:
osb-bsf@ic.gc.ca
They can answer all of your questions on this excellent program and, hopefully, find a solution for your predicament.
Can Visa force you to pay back the $100,000 you owe them? And can they touch your personal property? Yes they can, and they may already be taking steps to seize your wages or other property if your debt is over-extended.
You can certainly file for protection from your creditor(s) through a bankruptcy or proposal filing and I would recommend you contact us immediately at 310-1100 to discuss this situation and arrange for a free consultation, before your situation spirals further out of control.
I am so sorry that you received poor advice in respect to filing for Canadian debts from the United States.
Your Canadian creditors would not normally be part of a US bankruptcy filing as American bankruptcy laws and Canadian bankruptcy laws are totally different.
You do not necessarily have a LEGAL option available to you at this point but if you are planning to return to Canada in the near future I strongly recommend filing for protection from your Canadian creditors once you return with the help of a Canadian Trustee in Bankruptcy. The wealth of information on this website can help you with that decision.
HI
I have a spousal credit card, my spouse and i are no longer together, and i have been using my card and paying the debt. However, recently i have become unable to repay the debt, due to disability.
I am now on disability.
I want to pay this debt, but the credit card company will not give me any information to have it paid by me.
I can not even change the address, and I need to do that to keep the bills coming to me.
I never planed to be so poor, and i never planed to not be able to keep paying the bill.
I do not want him to know about this.
Can you help?
I have a client who owns a corporation that has massive debt. His daughter owns another corporation that has been nil for 3 years. If the first corp was to cease operations and began operating under the daughters company would that need to be referred to at all during a corporate bankruptcy of his corp?
Can a Credit Line debt be paid off in bankruptcy?
If I have both credit card debts and also line of credit debts, can both be covered if I file for bankruptcy?
I am planning on filing for bankruptcy as I have about $65,000 dollars worth of debt in credit cards and lines of credit(that are not taken on my house, etc.). I have no house.
I have a car loan of about $9,000 which I am paying. My car is worth approximately $6,300. I would like to keep it and continue paying the loan. I understand that I am required to pay the amount over $5650 to the trustee if I want to keep the car. If it has a loan registered against it, the loan amount is subtrated from the value of the car to determine the net value.
Will I be able to keep the car and car loan payment or will the trustee have to advise the car loan institution that I am going bankrupt and is there a chance that they will call the loan?
If you are 5 yrs into bankruptcy & everything negative on your credit report has purged but you did not fulfill your duties and have not been discharged will the bankruptcy still automatically purge from your credit profile at 6 yrs?
Hi,
I would like to know the implications of filing a credit proposal being a licensed financial advisor? I'm currently studying towards my financial planing designation. How exactly would the proposal affect me in practicing as a certified financial planner?
I accumulated some debt trying to build my business from scratch and then unfortunately received some poor advice from a former accountant that has led me to my current situation. This has taken a huge toll on my family and would like to resolve asap.
Please let me know my options. Want to learn from my unfortunate experience in a positive way to help others. Thank you:-)
My husband works at Daimler Chrysler, and will be entitled to a pension. We were living together than married for about 21yrs. He filed bankruptcy due to a lot of debt he had incurred. his lawyer told me that I am not entitled to any of his pension due to the bankruptcy. Through my employment, I do not have a pension. Is there anything I can do about this? Cant seem to find info on the web. Thanks, Anna
My husband is considering filing for bankruptcy - our mortgage is in my name (since about two - three years ago)along with our leases for our cars.
Would our house be taken away? or any way be involved in this bankruptcy?
Would my income be affected by his bankruptcy?
he also is in arrears with child support - how would this be affected?
My commonlaw husband just received a summons to appear due to not paying his credit card debt.
First he had a heart attack, then there was a plant closure causing him to loose job. Apparently he paid insurance on card of which card holder ignored. Can he do a consumer proposal or is it too late .
Yhank you Vicki
Hello there, I've only got one question, hypothetically speaking if I was to file for bankruptcy, would there be a financial knock-on effect to the rest of my family, meaning would they be able to access any of their accounts, or does it just start and end with my financial situation. Thanks for your help.
hi we are going to be filing for bankruptcy for the first time and we were wondering if we were to file our income tax, we get our refund same day, and then we file for bankruptcy after words do we have to show proof of where our income tax went? and do we have limitations on were we spend it as our trustee is saying that we can only spend it on certain things. and also we have 2 vehicles a 03 alero, and a 94 gmc 2500 pick up, do we have to give them up? or can we keep both? as we are 2 adults and we have 2 children 2 years old and a new born
I'm presently in the midst of bankruptcy which won't be discharged until end of August 2011. my boyfriend found me a motorcycle for a really great price. He will lend me the money and finance me. What impact would this have on my bankruptcy. Of course since he's my boyfriend the repayment plans are low.
Thanks so mcuh
I'm in the process of claiming bankruptcy. How soon after can you register for a new business? Also would incorporating a new business before the bankruptcy be part of the the process?
Hello,
I have a large amount of personal, unsecured debt. Besides other court decisions, today I received a letter from a bank's lawyer saying that "a Writ of Seizure and Sale of Lands has been issued" and if I don't pay my debt or a settlement in 30 days the bank might enforce it, retain the services of the Sheriff and evict me and "others residing there", seize and sell our home at a price "far less than the fair market value". My wife and I are both on the title of the home and we have 2 small children. The unsecured debt is mine exclusively, my wife has no debt and perfect credit history.
Can you please tell me if what's said in that letter can really happen? Can the bank take our home and throw us out, even though I am not the only owner? What happens if I transfer the ownership and mortgage to my wife's name before any lien or bankruptcy I might file? Is it to late now or bankruptcy would void any court decision, including the above?
Thank you very much.
Here is my dilemma: I am currently $100k in debt, all of which is unsecured. My income is $65, although I am under contract and therefore this figure may change.
Part of the $100k (approx $40k) is owed to my mother, who borrowed against her secured line of credit to help me out. I have been making payments directly to her line of credit. In the mean time, I am barely meeting my financial obligations, have no savings, no assets, and am generally a miserable person from all the stress. I have not, however, fallen behind on my bills, although I find myself having to live off credit to survive.
I would like to consider bankruptcy, but not if I would have to include the money I owe to my mother. I do not want her to be impacted at all, and I want to continue to pay her line of credit because she is retired and not in a position to take on the payments. Can I do this, or would I be favouring a debtor? Can I even declare bankruptcy, given the fact that "officially" I can still make all of my payments?
I am a senior citizen making less than $17000.00 annually. I owe tax for 2010 of $ 1900.00 and cannot afford to pay it. If I do not pay can they seize my old age or cpp to make me pay. What is my best strategdy? Thank you.
Hello Sir
A company I work for is closing and the Director is going personal bankrupt, as a Shareholder, am I responsible for any Debts, etc, Bank and Government of Canada for unpaid taxes,HST,payroll.etc.
I have NOT signed any personal guarantees what so ever.
Regards
Steven
I am currently exploring the road of bankruptcy...my question is i own half a RESP with my x-wife which is being used by my daughter to attend University...are those funds affected by me going bankrupt
Thanks
Jack
I am filing for bankruptcy next week. My mother has an insurance policy worth $30,000 and I am the beneficiary. Is this money considered income and will be taken from me if god forbid something did happen to her during the next 21 months?
i filled bancruptcy in 2009 i was discharged in 2011. in 2012 was approved for disability tax credit retro to 2005 i was told that i am not allowed to get the money from the tax credit nor is my common law spouse even if she did not declare bancrupcy and had a taxable income for those years. is that correct
How long does a bankruptcy stay on your record? If I were to declare, what kinds of restrictions does that put on my every day life? I'm interested to know how this affects my day to day.
I have been named as a creditor in my ex-spouse's consumer proposal for spousal and child support arrears owed. As these are protected under section 178 of bankruptcy act, and we are going through FRO, do I need to fill out form 31(proof of claim)?
If a person declares personal bankruptcy and also declares bankruptcy on one of his ltd companies ,what happens to monies received in other Ltd companies that he is sole owner in. Monies such as rents on buildings that his Ltds own.
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