Questions: My question is as to what happens to somebody that has filed for bankruptcy in Ontario and then decides to immigrate to a different country. I read about the new rule that if a person makes a significant SURPLUS INCOME that their bankruptcy will be extended for an additional 12 months. The way I see it is to either to declare your bancruptcy just before you are ready to leave or either make sure you are making only a specific amount of money. Is this correct?
And what happens if you are rated as excessive surplus and your case is extended but in the meantime you lose your job do you go back to the original 9 months for a discharge?????
Another question is to what happens when you declare bankruptcy and then leave the country before its finalized. I know you don’t have to be residing in the country but for arguments sake lets say your trustee needs something from you and your not available. Will one ever get a discharge granted or will ones case forever stay open?
Thanks
P.S. Excellent job on the web-site. Very helpful.
Answer: Your questions raise a number of issues.
First, the main reason people declare bankruptcy in Ontario is to protect them from having their creditors take them to court, sue them, and garnishee their wages. If you are leaving the country, creditors in Ontario won’t know where you are, so it’s unlikely they will be able to garnishee your wages. So, for you, a bankruptcy may not be necessary.
Second, as for surplus income, you are correct. If you are required to pay the trustee more than $100 per month due to your surplus income, your bankruptcy will be extended for an additional twelve months. You are required to report your income to the trustee each month, so if your income drops, your required payments may drop. The calculation is not based on your income when the bankruptcy starts. The calculation is done each month. So yes, if you decided to not work overtime, for example, that would keep your surplus income lower. Prior to the end of the first nine months the calculation is completed, and if you are over the limit your bankruptcy is extended for 12 months. If then in month number 14 you lost your job, your bankruptcy would still continue until the end of the 21 months, but your payments could be adjusted and probably lowered based on your new, lower income.
Finally, if you leave the country, as long as you complete your duties, you can still be discharged. For example, you can fax your paystubs to your trustee from anywhere in the world. Before you leave the country you would want to complete your required counselling sessions, and provide the trustee with any other required information. If a court discharge hearing is required, you may need to return to the country to get discharge.
Each situation is different, so for a more detailed answer we suggest you contact a licensed Ontario bankruptcy trustee.