November « 2008 « Bankruptcy Ontario: Free Information about Bankruptcy in Ontario

new property prior to discharge

Monday, November 24th, 2008

Question: Can i purchase property before i receive my discharge? Can the trustee seize this property if there is an increase in its value before my bankruptcy is complete?

Answer: In theory, yes, you can purchase property while bankrupt. Practically, it is difficult to qualify for a mortgage while bankrupt. In theory, if you bought a property and it increased in value by $20,000 while bankrupt, the trustee could determine that it is “after acquired property” and attempt to realize on it, so the safest answer is to wait until discharged to buy property.

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Consumer Proposals

Sunday, November 23rd, 2008

Question: What is maximum time allowed for creditors to accept a consumer proposal under any or all circumstances ?

Answer: On the 45th day after a consumer proposal is filed, all votes are counted. If more than 50% of the dollar value of the creditors voting have voted in favour, the proposal is accepted. If however, more than 25% have voted against, a creditor’s meeting is held approximately 21 days later, at which time the final votes are counted. Your proposal administrator or trustee will be able to provide the exact dates in your situation.

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is it time to file for bankruptcy in Ontario?

Thursday, November 20th, 2008

Question: Two years ago i had a car accident and since then i have not been able to go back to work. for a while i received some benefits from insurance and then it stopped, i might get some money later on, but it will take some time before that happens. right now i owe my credit cards and line of credits around $90,000.00 and i can’t make the monthly payments unless i get money from one credit card to pay for another one. do i have to declare banktruptcy or should i wait as long as i can?

Answer: The most common reason for residents of Ontario to declare bankruptcy is to prevent their wages from being garnisheed. In your case, if you are not working, you do not need to go bankrupt to prevent a wage garnishment, so yes, you could wait to declare bankruptcy.

However, if you are under significant stress and want to deal with your debts while you recover from your accident, bankruptcy is an option. You should consult a bankruptcy trustee and ask them to explain the pros and cons of bankruptcy in your situation, and then you can make a decision that’s right for you.

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proposals and bankruptcy

Wednesday, November 19th, 2008

Question: Can a proposal be done after the 9 month bankruptcy period has been completed ? , with surplus still being paid ?

Answer: Yes, a proposal can be filed at any time. If you have not yet been discharged from bankruptcy, perhaps due to additional payments that you are required to make, it is possible to file a proposal. You should consult your trustee to see if that makes sense; it may be more efficient to simply complete your bankruptcy.

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Bankruptcy and spouse’s House

Wednesday, November 19th, 2008

Question: My wife owns a condo in her name and mortgage in her name. I got married about 2 months ago and heard this is now considered a matrimonial home. I have recently been discharged from bankruptcy. If my wife sells her condo now can they come after me or her for the equity in her house since i now live there? I heard i need to sign the sale paper of her condo even though she owns it since we are now married? i dont want to cause any problems for her or myself.

Answer: You don’t have to worry. It’s your wife’s house, and always has been. It has nothing to do with you or your bankruptcy. They can’t come after you for money now that you have been discharged.

It is true that the house is now considered to be a matrimonial home, which means as the spouse you are required to sign off on the sale. However, it is still legally your wife’s house, and has no impact on your bankruptcy. For further information, contact your bankruptcy trustee, or a real estate lawyer.

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Immigration sponsorship and bankruptcy

Tuesday, November 18th, 2008

Question: If I file for bankruptcy can I still sponsor my husband/kids abroad?

Answer: In most cases, if you are bankrupt it is difficult to be an immigration sponsor. You should discuss this in advance with your immigration lawyer, or with the government, before you decide to go bankrupt.

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Property given to daughter

Tuesday, November 18th, 2008

Question: If we had a property (that we had previously purchased for ourselves) and had given it to our daughter last year and it is now in her name only. After what amount of time is this property considered fully hers and will not be affected by our bankruptcy?

Answer: When you go bankrupt in Ontario, the trustee is required to ask you to disclose all property that you have sold or disposed of in the last five years while you knew you were in financial trouble. If you gave the property to her last year, it is possible that it will be affected by your bankruptcy. You should discuss this with your trustee to determine what affect, if any, it will have on your bankruptcy.

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Voluntary Assignment of Wages and Wage Garnishment

Monday, November 17th, 2008

Question: What is the maximum a person can be garnished? Can an employer take the full amount of my last cheque if I leave before the garnishment is complete?

Answer: Under the Ontario Wages Act, the maximum wage garnishment in Ontario is 50% of your wages. The only exception would be where the government can take 100% of the compensation received by a self-employed contractor. If you are an employee, your employer cannot take all of your last paycheque to satisfy a garnishment, unless there is a specific court order allowing a 100% garnishment.

For more information, consult this article on How to Stop a Wage Garnishment.

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Can i go bankrupt without a job?

Monday, November 17th, 2008

Questions: Can I go bankrupt in Ontario without a job? Also, if i had a student loan, and now revenue canada has the file, does this debt get cleared too?

Answer: Yes, you can file bankruptcy in Ontario without a job. However, most residents of Ontario that file bankruptcy are going bankrupt to prevent their wages from being garnisheed; if you have no wages, because you are not working, it may not be necessary to file bankruptcy until you return to work.

The rules governing a student loan and bankruptcy will determine whether or not your student loan would be discharged in a bankruptcy. In simple terms, if you have been out of school for more than seven years, your student loan will be discharged when you go bankrupt. Whether or not the file is with Revenue Canada is irrelevant. Contact a bankruptcy trustee for more information.

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Who Does a Bankruptcy Trustee in Ontario Work For?

Friday, November 14th, 2008

Question: AS A TRUSTEE , DO YOU WORK FOR THE CLIENT OR THE CREDITORS ? WHOSE BEST INTERESTS DO YOU PROTECT ?

Answer: This is an excellent question. If you file bankruptcy in Ontario, your bankruptcy file is administered by a licensed bankruptcy trustee. Technically, although you as the debtor choose your trustee, the trustee is appointed by the court to administer your estate. The trustee is therefore a court appointed official, working for the court.

In other words the trustee does not work for you, and the trustee does not work for the creditors. The trustee is appointed by the court (sort of like a judge) to make sure that all of the rules are followed. The trustee will explain the rules to you before you file bankruptcy. The trustee will also make sure that the creditors follow all the rules (such as preventing them from garnisheeing your wages after the bankruptcy starts).

Even though the trustee is not working for you, they are there to help make the process go smoothly, and therefore it is important to select a trustee that you feel comfortable with, and that explains your options in detail before you decide to file bankruptcy in Ontario.

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Archive for November, 2008