Question: I asked an Anonymous Question. Where do I go to read the answer?
Answer: If your question is posted, you can scroll down to find it. However, due to the volume of questions we receive, many of which are repeats of questions we have already answered, not all questions are answered. Click on the Find A Trustee link to send a question directly to a trustee in your city for a personalized answer.
Question: I have a healthy enough RRSP. I had repeatedly been told it was protected because it was “locked-in” and I could not touch it.
When we asses risk it is these pieces of information we consider. Is my RRSP available to creditors in my bankruptcy? It is locked in until 2015 (or longer). Once someone suggested I put it under an insurance but that seemed overkill.
Is it at risk if I go bankrupt?
Answer: Probably. If an RRSP is “locked-in” as a result of previous employment, where your pension is converted to an RRSP, it generally cannot be seized by the trustee. If there is a life insurance component it also is generally not seizable.
However, if your RRSP is invested in a locked in GIC that doesn’t mature until, say, 2015, the trustee would be able to seize it.
An added twist is that the rules regarding RRSPs will probably change later this year.
Given these complexities, you should gather all applicable RRSP documents and bring them in to your initial consultation with a trustee, who will be able to advise you on whether or not you will lose your RRSP in a bankruptcy.
Question: Are my exemptions specific to me or do my children have to include their personal clothing, computer etc. in with my assets?
And on the same topic. If my husband has assets and I have assets, is the bankruptcy only interested in my assets?
Both of our cars are in his name, does that mean one must be assigned to me?
My husband guaranteed a percentage of some of my loans. Our house is in his name and has little or no equity. Does my husband also have to declare personal bankruptcy? Can he make a proposal to pay his portion over time?
Answer: Only the bankrupt’s assets are considered in a bankruptcy. If a wife goes bankrupt, her husband’s and children’s assets are not considered (unless she transferred significant assets to them just prior to the bankruptcy).
If your husband has guaranteed some of your loans and you go bankrupt, he could either continue making payments on the loans, or go bankrupt or file a proposal. IF most of your debts are in common, a joint proposal may also be an option.
It’s impossible to cover all possible scenarios in a short answer on this web site, so we suggest that you consult a trustee for a free initial consultation.
Question: my ex husband and i got divorced a year ago. Neither he or i had good enough to assume or even split the $20,000 line of credit . He was maintaining the interest on it. I just found out he has gone bankrupt and the bank is coming after me for the money. I cant afford to pay all of that and I am drowning in debt as it is, what is my options?
Answer: If you can’t afford to pay the bank in full, you have four options:
First, you could do nothing, or pay them what you can afford. Unfortunately you run the risk that they take you to court and attempt to garnishee your wages.
Second, you could attempt to file a Debt Management Plan through a non-profit credit counsellor. Under a Debt Management Plan you are required to pay the debts in full over a two to five year period, which may not be possible in your case.
The third option would be to file a consumer proposal, where you offer to pay some, but not all, of the amount owing.
If you can’t afford that, the final option is to declare personal bankruptcy. Bankruptcy eliminates your debts, but also impacts on your credit rating.
The correct option for you will depend on your monthly income, and whether or not you own any assets, like a car, house, or RRSP.
To find the answers in your specific case we strongly recommend that you arrange a no charge initial consultation with a trustee in bankruptcy licensed by the federal government so that they can review all of your options with you, and then you can make an informed decision.
Question: I am currently sending out resumes and applying for new employment. Will a new employer or potential employer be able to obtain information concerning my recent bankruptcy and will a recent bankruptcy have any bearing whatsoever on my obtaining employment?
Answer: It depends on the employer. If you are getting a job where you must be bonded, it may be more difficult to get bonded if you are an undischarged bankrupt. Other professions, such as investment advisors, may not employ you while you are bankrupt in Ontario.
However, in the vast majority of cases being bankrupt has no impact on a potential job. Most employers don’t do credit checks as part of the hiring process, so they probably won’t even know you are or were bankrupt.
To avoid surprises, if you are offered a job and the employer requests permission to do a credit check on you, be sure to disclose to them in advance that you are bankrupt; they will find out if they do a credit check, so in most cases it’s better if they hear about your bankruptcy from you first.