Question: I need advise on this situation. I have a house with a mortgage with very little equity. It is for sale. If sold the sale proceeds probably wouldn’t cover more than the mortgage penalty, real estate fees and outstanding property taxes. Part 2 – I have a line of credit/credit card debts/CRA debt (also GST for my corporation). These would total approximately $75K. I also have a van with a loan of $512 per month and it has no equity.
If I claim bankruptcy, I want to keep the van and continue to make the payments.
Do I claim bankrutpcy for just my corporation or personally too. The one credit card is in the business name; the line of credit is personal and two other credit cards are in my name personally.
I am also paying child support monthly. Any income I earn each month is paid to my corporation. My debts exceed any income.
What will happen potentially if I claim bankruptcy and if I earn sales commissions in the future under a new company/corporation which I will open after bankrupting this one? Would they take the house if I don’t sell it? What else do I need to consider and how much would it cost to go through bankruptcy and how are those fees paid? Thanks for your advice.
Question: You are asking many complicated questions. To fully answer the questions we would require more information. We suggest you contact an Ontario bankruptcy trustee who will give you a free initial consultation, and review all of your options in detail.
In general, yes, you can keep your van and keep making the payments on it, even if you go bankrupt.
In general, it would be you personally that would go bankrupt, not your corporation.
As for your income, when you are bankrupt you report your income each month to your trustee, and you are required to pay half of your surplus income into your bankruptcy estate. If you earn large commissions, the cost of your bankruptcy goes up.
Again, due to the complexity of your situation, a face to face meeting with a trustee is essential to fully explore all options.