Question: My wife and I are unfortunate victims of the Nortel fraud to the tune of $250,000. We have not been able to surmount this loss and face imminent bankruptcy. We have secured debts of $200,000 and unsecured debts over $300,000 mosty credit card debt and have been in default for about a year. Two judgements have already been granted to two credit card companies and I believe registered as liens against out principle residence. We had a number of collector cars which we have sold off over the months but still are in possession of two which the time of year makes quite difficult to sell.
My main question is what actually happens after we have declared bankruptcy. My wife is a retired teacher so her pension income exceeds the income level allowed by a considerable amount. I realize 50% of the overage will be taken for 21 months. My income is minimal as it’s Canada Pension but I turn 65 in half a year so that amount will increase somewhat.
Again, day to day, what does out new routine become and is it the bankruptcy trustee who dictates it?
Regards Jim and Donna
Answer: You are in a difficult situation. As to the process in a bankruptcy in Ontario, you do not necessarily experience any changes in your day to day life.
As you stated, each month you are required to submit to the trustee proof of your income, and you are required to pay to the trustee, for the benefit of your creditors, 50% of the amount your income exceeds the surplus income guidelines. So, practically, you are keeping close track of your income and expenses each month.
You are also required to attend two credit counselling sessions, and to provide information to the trustee to file your taxes for the year of bankruptcy, and to assist the trustee if you have any assets that will be included in the bankruptcy.
Beyond that, your day to day life is not significantly impacted. We do recommend that before you decide to file bankruptcy you meet with a licensed Ontario bankruptcy trustee and ask them to review with you in detail the bankruptcy process, so that you fully understand your obligations.