September 2010 « Bankruptcy Ontario Blog Bankruptcy Ontario: Free Information about Bankruptcy in Ontario

Multiple Bankruptcies and Credit Report

Monday, September 27th, 2010

Question: I had my first bankruptcy discharged 12 years ago and of course it was gone from my credit report.
When I inquired last year about options, I was told that if I file again, the second one would be on my credit report for 14 years. While that is a long time, I did file and was recently discharged for the second one.
However, now I am finding that both my bankruptcies are showing up and I am told that the first one will stay until 14 years after the original discharge. Is that lawful for the credit bureaus to do that? Why was it not disclosed before? Is there anything I can do about it?
Thanks

Answer: Whether or not it is lawful or not is not the issue. It is standard practice for the credit bureaus in Canada, in the event of a second bankruptcy, to “bring back” the first bankruptcy, and report both bankruptcies for 7 + 7 years (14 years). There is nothing you can do about bankruptcies being reported on your credit report.

However, you can take steps to repair your credit, including getting a secured credit card, saving money, and paying your monthly bills on time. In time, this will have more impact on your ability to borrow than an old note on your credit report.

Tags: credit report, second bankruptcy
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bank opposes bankrupcy

Friday, September 24th, 2010

Question: hi i filed for bankruptcy in Ontario, but one of the banks sent me a notice to oppose my discharge from bankrupcy. then a couple if days later, a got a letter from the superior court of justice with the title “Notice that Action will be dismissed”, I’m having trouble understanding what this mean. I’d appreciate your help

Answer: It would appear that the bank decided to oppose your discharge from bankruptcy, so they registered their opposition with your trustee, and with the court. It’s possible that they then changed their mind, and withdrew their opposition, so the court then notified you that the action was dismissed. You should contact your trustee, or the court, for a full explanation in your situation.

Tags: bankruptcy discharge
Posted in bankruptcy discharge, bankruptcy Ontario | Comments Off

House Equity in Bankruptcy in Ontario

Monday, September 20th, 2010

Question: I am in the process of filing bankruptcy in Ontario but have not signed the papers yet. There is $8000 equity in my house however there is still 4 years to go on the mortgage that if I sold now I would owe more than I make in closing costs and the rate differential however the trustees say they want us to pay the $8000 which is really not possible, not even in payments. We make just under what is determined for our family size and there is no extra monies. If either of us did get another position to help cover that cost it would only increase the length of our bankruptsy. I would like to go through with the bankruptcy but can’t afford to agree to this extra expense? Consumer proposal would not help. Don’t know what to do.

Answer: You have three choices:

First, you could get a second opinion from a different Ontario bankruptcy trustee. It appears that if the trustee was to seize your house and sell it, after paying disposition costs and the penalty to break the mortgage there may not be any equity. Alternatively, the trustee could apply to court for an extension to your bankruptcy to allow you to pay the equity over a longer period of time.

Second, you could sell the house. If there truly was no equity, you would have proof, and your bankruptcy would end in the normal period of time. Obviously that’s a very drastic solution.

Third, you could consider a consumer proposal. If there would be no surplus income in your bankruptcy, the consumer proposal could offer to pay the equity in your house over an extended period of time to make the payment affordable. Again, you should consult a different Ontario bankruptcy trustee for a second opinion.

Tags: bankruptcy, home equity, house
Posted in bankruptcy, bankruptcy Ontario, bankruptcy trustee, home equity | Comments Off

Mortgage, Car Payments and Consumer Proposal

Thursday, September 16th, 2010

Question: I was just wondering, if we have a mortgage on a house and we are making car payments through a bank can we still qualify for a consumer proposal without losing either of those things?

Answer: Yes, you can file a consumer proposal or a bankruptcy in Ontario, and continue to make the payments on your mortgage and your car, provided those payments are up to date when you file.

Whether or not you should continue to make the payments is up to you. If your house is worth significantly less than what is owing on the mortgage, it may be prudent to surrender the house and include it in your proposal. That is a decision you will make in consultation with your consumer proposal administrator.

Tags: car, consumer proposal, house
Posted in car, consumer proposal, home equity, house | Comments Off

Personal Bankruptcy – Do You Need a Trustee?

Wednesday, September 15th, 2010

Question: Can you do your own Personal Bankruptcy without a Bankruptcy Trusty, and how do you do it if you can?

Answer: In Ontario, and in Canada, you require the services of a bankruptcy trustee. The bankruptcy process is a legal process, and therefore legal assistance is required.

Tags: bankruptcy trustee
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Will bankruptcy in Ontario stop second career funding?

Wednesday, September 15th, 2010

Question: My common law, alcoholic, unemployed spouse has drained me financially, causing bills to go unpaid for months, including the mortgage (everything is in my name,house, mortgage, bills). I am in debt over 20,000 not including the mortgage. I have just been approved for second career funding to return to school full time and have been granted basic living expenses. If I file for bankruptcy will I lose my second career funding monies for school/basic living expenses?

Answer: Generally, no, filing for bankruptcy in Ontario does not cause you to lose second career funding, or OSAP, or other forms of government assistance for further education. You should contact the funding agency first to confirm that a bankruptcy in Ontario will not impact your ability to receive funding. In many cases they will ask for a letter from your bankruptcy trustee confirming that the trustee will not seize the money if you are bankrupt.

Tags: OSAP, second career funding
Posted in bankruptcy Ontario, bankruptcy trustee | Comments Off

supplementary credit cards and bankruptcy in Ontario

Monday, September 13th, 2010

Question: My ex spouse has a supplementary credit card, how will this affect my filing for bankruptcy?

Answer: If you go bankrupt, you are no longer responsible for your debts. If your spouse, or ex-spouse, or anyone else has co-signed a loan with you, or is joint on a credit card with you, they remain responsible for the debt, because they have not filed bankruptcy.

Confusion arises with supplementary cards. If both you and another person jointly applied for a card, there is no doubt that you are both responsible. However, if you applied for the card, and then on the application form simply ticked the box that says “please send a card to my spouse as well”, then your spouse didn’t apply for the card. Under those circumstances they are not legally responsible for the debt, because they did not agree to be liable for the debt.

However, if your spouse had a card issued in their name, and if they used the card, it is more difficult for them to assert that it’s not their card. Their are cases where a credit card company will pursue the supplementary card holder for the debt, because they used the card.

Your first task will be to review your monthly statement and any card holder agreements you have to see if it’s a joint card, or a supplementary card.

For further confirmation you could contact the credit card company and ask them if your ex is responsible for the card (although it’s possible the customer service person at the credit card company won’t provide you with a legally binding answer).

Your final option is to meet with a bankruptcy trustee and have them review your documents and provide you with further advice.

For more information, please see this article on Will My Bankruptcy Affect My Spouse?

Tags: bankruptcy credit card, bankruptcy spouse
Posted in bankruptcy Ontario, bankruptcy trustee | Comments Off

Bankruptcy Counseling Sessions

Monday, September 6th, 2010

Question: After claiming bankruptcy, how much time has to pass after your first credit counseling session before you can go for your second?

Answer: Your first credit counselling session must be completed between 10 days and 60 days after filing bankruptcy. You must wait 30 days before completing your second session, and it must be completed within 210 days of your bankruptcy filing.

Tags: credit counselling
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Surplus income in family

Thursday, September 2nd, 2010

Question: The only income I make is from Child Tax Benefis for my 3 kids, I am a stay home mom with no other income, but my spouse makes about 5k a month which is more than $3971 for the family 5. There is about $1500 surplus in our income but the income is made by my spouse.
Will I be for sure entitled to pay for 50% of the surplus even my spouse isn’t the one who filed for bankrupt???
PLEASE HELP!!!!!

Answer: You should arrange a meeting with an Ontario bankruptcy trustee to estimate what you would be required to pay in a bankruptcy. You are only required to pay your portion of the family surplus income in a bankruptcy.

For example, a family of five in 2010 has a surplus income threshold of $3,971. So, for example, if you receive $471 in child tax credits, and your spouse earns $5,000 per month, your family income is $5,471, which is $1,500 over the surplus income threshold, so if both of you were bankrupt you would be required to pay half of that as your surplus income penalty, or $750 per month. However, you earn $471/$5,471 or 9% of the family income, so you would only be required to pay 9% of the penalty, or 9% x $750 = $68.

We have over-simplified this calculation for illustrative purposes, but as you can see, since your income is low, the penalty you would pay is also low.

In fact, if your only income is from child tax credits, and you are not planning to return to work in the near future, one option for you would be to not go bankrupt until you return to work, since you have no wages for creditors to garnishee.

The issues you raise are complicated, and so a no charge initial consultation with an Ontario bankruptcy trustee is essential to fully review your options.

Posted in bankruptcy Ontario, surplus income | Comments Off

Archive for September, 2010