Ontario Personal Bankruptcy Blog

1. Am I correct in understanding that the money I would pay would have to come from post-bankruptcy income? i.e. I would have to find someone (relative, friend, etc.) that would loan me the money to pay the difference and then pay them back out of my post-bankruptcy earnings?


2. If I forfeited the vehicle, would I be given back the amount of the limit in order to purchase another vehicle?

Answer:
You are correct. Currently a vehicle in Ontario is exempt if it is worth less than $5,650. If you owned, for example, a vehicle that had an appraised value of $6,650, you could pay into your estate $1,000 and keep your vehicle. (This example assumes that there are no liens against your vehicle; if you owe money against the vehicle, you would have to make pay the lender to keep the vehicle).

If you wanted to pay the $1,000 to keep the vehicle, the money could come from your earnings after you file bankruptcy, or you could borrow the money from friends or family (provided they understood that you were bankrupt).

Here's where this gets complicated: On June 22, 2006, new legislation was passed in Ontario dealing with the equity in an automobile in a bankruptcy. Prior to June 22, 2006, an automobile was exempt from seizure if its value was less than $5,650. If the value exceeded $5,650, the entire amount was seized.

Under the new legislation, the first $5,650 is exempt from seizure. And, to answer the question, here is a quote from the Ontario Executions Act, paragraph 3(3):

Where exemption is claimed for a motor vehicle that has a sale value in excess of the amount referred to in paragraph 6 of section 2 plus the costs of the sale, the motor vehicle is subject to seizure and sale under a writ of execution and the amount referred to in that paragraph shall be paid to the debtor out of the proceeds of the sale.

Therefore if you surrendered the vehicle and the trustee sold it, you would be entitled to receive the first $5,650 of the proceeds, and you could use that money to purchase another vehicle, because paragraph 4(4) of the Executions Act goes on to say that:

The sum to which a debtor is entitled under subsection 3 (1), (2) or (3) is exempt from attachment or seizure at the instance of a creditor.

Clearly this is a complicated area, so if you own a car and are considering filing for bankruptcy in Ontario, you should contact a trustee and arrange for a no-charge initial consultation before you make any decisions.

Here's a final thought. If you do own a valuable car, instead of going bankrupt and losing it, another option is to file a consumer proposal so that you can keep your car.

I am on Employment Insurance (Parental benefit)until March 2007. I did not declare bankruptcy yet. What are the possibilities of my creditors getting access to my EI payments?

I would like to go bankrupt in Ontario, and am planning to Immigrate to Australia. If I file for bankruptcy NOW, will it affect my immigration application in a few months? (Does the immigration department look into my credit report?) Should I wait to file bankruptcy until AFTER I receive my immigration acceptance? If it takes nine months to discharge me, I will already be in Australia. Does this pose a problem? (Am I required to be in Canada for the discharge?). Once I get to Australia, do I start fresh with a new identity there (meaning they will not see my canadian credit history)?

We have recently been told during a credit check that there are outstanding balances on several credit cards that were listed in the bankruptcy we were discharged from in 2004. Would this be a normal ocurrence, or has the trustee made a mistake?

how do I obtain a copy of my discharge papers from my bankruptcy in ontario?

Unfortunately, I am forced to look at filing for bankruptcy for the second time - the first was in 1996 after I was left with numerous debts after the death of my husband.

I am a widowed senior on Canada Pension and Old Age Security. My car is a 1995 Chev and because I have Rheumatoid Arthritis and am not able to walk that far, I am in fear of losing my car.

Can you give me any advice re above.

Many thanks.

i own a home that i can not keep payments up on the house i can not sell the house in time to clear my bills i have friends who will carry what is left on my home but do not have money to put down for a down payment would i be penalized for walking out on this house?

Can I cash in a LIRA (a locked-in retirement account) in an attempt to avoid bankruptcy?

I entered into a consumer proposal on December 1, 2004 at this time I had full time employment. The proposal was for $250.00 per month for 48 months. In July of this year I became unemployed. Due to the change in my income I find that I am now behind in payments for my proposal (2 payments with trustees knowledge) and other debts. My questions is: What can I do now?
Is it possible to change my propsal to a bankruptcy?

is there anyway i can declare personal bankruptcy in Ontario and keep my house if i continue to make the payments?

If I decide to file for bankruptcy in Ontario and my co-signer has had previous "bankruptcies" what may happen? I have never declared personal bankruptcy myself before.

Is there anywhere on the web a list of Canadian and/or Ontario people who declared personal bankruptcy? If yes, what is the URL?

I couldn't find one and it would sure make we feel better if there weren't one.

Thanks!

i own a home with a busness i can not handle the bills any longer every month i sink deeper.the busness is paying the bills to run. its my personal bills i accumalated to start up eg credit cards and lines of credit.selling is not an option too long to sell.gas has been cut off. need heat very soon.do not have extra funds to pay the bill i have been trying to keep up with all bills. now im in a bad spot.the gas company wanted $2000. dollars deposit now its $4500. to catch up.thats only one bill have a lot more. what can i do.

We are going to be discharged in 12 months.
The question is that our trustee has been a nightmare to deal with, but they cannot tell us about three years of income tax refunds that were sent to their office. They told us it went to the creditors, but cannot provide us with the amounts and to whom the money was sent! I went into the CRA web site to check my husbands and my tax returns and they have received alot of extra money dating back before the bankruptcy and after. They said that they had our taxes assessed and they received everything.. most of the money would have covered most of our debt anyway! How to I get a straight answer out of my trustee? Or do I have to take them to court???

I had a business in my name in 1993. I owed about $200. which I couldn't pay. I have M.S. and the last time I heard from the GST people it ws about $20,000. I have no income, I'm living with friends, and I Don't know what to do about it? Please help