Ontario Personal Bankruptcy Blog: June 2007: Answers to Personal Bankruptcy Questions

Posted on Friday, June 29, 2007

House and bankruptcy in Ontario

Question: I sold a house around two years ago for around two hundred fifty thousand dollars and I bought an apartment for around one hundred seventy thousand dollars.

I used the rest of money to buy a car for my mother (in her name; I paid in full). The most of the rest of the money I used for a trip to Europe and living expense as I only work as part time since early this year.

My question is : if I decided to go for bankruptcy option, would there be any affect to my mother e.g. take my mother's car which was paid by me two years ago and the rest of the money remaining from the disposition of my first house (but I already spent almost all of them).

Answer: The answer depends on whether or not you were insolvent (unable to pay your debts) when you bought the car for your mother. If you had not debts two years ago, it should not be a problem. However, if you had a lot of debts, but instead of paying the debts chose to buy your mother a gift, it is possible that it could be a problem. We suggest you contact a bankruptcy trustee to review your situation and help you determine if a bankruptcy is the correct course of action. The other issue will be the current equity in your house, which you should also discuss with your trustee.

Labels: bankruptcy Ontario, bankruptcy trustee

Posted on Tuesday, June 12, 2007

Garnishee in another Ontario region

Question: I reside in Oshawa. I am owed approximately $1900 by a Sudbury resident. Can I commence proceedings from here or do I have to travel to Sudbury to do so? Do I need counsel?

Answer: As a general rule you must commence legal action where the debtor resides, which in this case would be Sudbury, unless the debt arose in Oshawa (because for example the person lived there at the time). This appears to be a small claims court matter so counsel is probably not required, however given the distances involved counsel would probably be advisable.

Labels: debts

Posted on Monday, June 11, 2007

will tuition be garnished if i claim bankruptcy

Question: I have returned to school and I was wondering, will they garnish my payments toward tuition or will i be affected in anyway while attending school if i claim bankruptcy in Ontario?
I also was curious to know if rrsp could be used towards tuition as this site mentions rrsp are a good way to rebuild back your credit after claiming bankruptcy.

Answer: No, you do not lose your payments towards tuition if you are bankrupt. In most cases if you are getting a student loan, such as OSAP, while bankrupt in Ontario, OSAP will request a letter from your trustee confirming that the loan proceeds will not be seized.

Yes, you could cash in an RRSP if you are not bankrupt and use the money to pay your tuition, but remember that you may owe more in taxes next year as a result.

Labels: bankruptcy, bankruptcy Ontario