May « 2008 « Ontario Personal Bankruptcy Blog

Archive for May, 2008

UPON RECEIVING A LETTER OF DISCHARGE

Friday, May 30th, 2008

Question: After receiiving my letter of discharge, I was told to request a credit report, and then amend the file with a letter including my letter of discharge. What happens if I don’t?

Answer: Once you have completed the duties in your bankruptcy, you will receive a certificate of discharge from your trustee. Your trustee also sends the certificate of discharge to the Office of the Superintendent of Bankruptcy, who in turn forward that information to the credit bureaus. Therefore your credit report will be automatically updated, so it is not necessary for you to send your certificate of discharge to the credit bureau.

We recommend that everyone check their credit report once a year, whether or not you were ever bankrupt. About three months after your discharge you should request a copy of your credit report, and if your discharge is not properly reflected on your credit report than at that time you could send in your certificate of discharge to correct your credit report.

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Owing Canada Revenue Agency and Bankruptcy in Ontario

Wednesday, May 28th, 2008

Question: If I owe Canada revenue and I go bankrupt in Ontario will the bankruptcy erase the debt?

Answer: Yes, debts to Canada Revenue Agency (CRA), formerly known as Revenue Canada, are discharged in a bankruptcy in Ontario. More information can be found in this article on Revenue Canada and bankruptcy.

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Impact on corporate bankruptcy

Tuesday, May 27th, 2008

Question: We keep our boat at a marina which rumour has it my file for bankruptcy. Could we or our boat be in any jeopardy? We owe the marina no money.

Answer: If you own the boat, it does not form part of the assets of the marina, so if the marina goes bankrupt you should still be able to retrieve your boat. However, if the marina goes bankrupt and the trustee takes over the operations, there may be a period of time where access to the marina becomes difficult, so to be safe you could consider removing your boat now and storing it somewhere else.

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mortgage and bankrutcy

Saturday, May 24th, 2008

Question: Here is my situation i bought a house a year ago this year i found out my septic needs to be replaced and my water well is under the garage.
I can barely pay the bills now, i cant afford a new septic and well, and i soon won’t be able to live here much longer.
I cant sell the house for even half of what i owe on it.I also have about 35000 in visa and unsecured loans.

my questions

1)does the bankruptcy take care of my mortgage

2)should i go bankrupt before or after foreclosure does it make a difference?

thank you

Answer: If you know for sure that you cannot afford to continue living in the house, the best answer may be to find a place to rent now, surrender the house to the bank, and then consider a consumer proposal or personal bankruptcy. In either case the shortfall on the mortgage would be included in the proposal or bankruptcy.

If you go bankrupt and continue making payments on the mortgage, and then some months after the bankruptcy starts decide to surrender the house, you would be liable for the shortfall; the shortfall would not be included in the bankruptcy.

As the real estate market gets worse in Ontario, mortgage foreclosures are increasing. This is a complicated area, and it is important that you get good advice before making a decision, so we strongly recommend that you arrange for a no-charge initial consultation with a licensed bankruptcy trustee.

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Consumer Proposal and OSAP

Friday, May 23rd, 2008

Question: If my parents are locked in a consumer proposal for four years, can I apply for OSAP funding for university?

Answer: Yes. In most cases even if you yourself were in a consumer proposal or a bankruptcy, you could still apply for OSAP, and subject to your family income in most cases you would be approved.

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Pay Increases while Bankrupt

Thursday, May 22nd, 2008

Question: Am I obligated to tell my trustee about pay increase as a result of a performance review?

Answer: Yes, you are required to report to your trustee each month your income, regardless of why it increased or decreased. Failure to disclose your income could result in your bankruptcy discharge being opposed, meaning that your bankruptcy period could be extended.

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Child Tax Credit and Bankruptcy in Ontario

Wednesday, May 21st, 2008

Question: If I go bankrupt will I lose my child tax credit for my kids?

Answer: If you go bankrupt in Ontario, the trustee will NOT take your child tax credit. However, each month that you are bankrupt you are required to report your income to the trustee, and if your income goes above a certain limit (based on the size of your family), you will be required to pay a portion of that surplus income into your bankruptcy estate. Please contact an Ontario bankruptcy trustee to do a calculation for you of the cost of bankruptcy based on your income and family size.

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Divorce settlement and bankruptcy in Ontario

Tuesday, May 20th, 2008

Question: I have been left no alternative after being seperated and receiving no interim settlement then to declare bankruptsy. I have one question. When we finally do settle our financial matters from the divorce, will the money I get from the settlement I receive, will it be seized as part of the bankruptsy? I might have a sum of approx $75,000.00.

Thanks

Answer: In most cases, yes, if you receive a large sum of money while you are bankrupt, the money will be seized and distributed to your creditors. If you owe less than $75,000, you probably don’t want to go bankrupt, because when you receive the money you can pay your creditors directly. If you owe more than $75,000, bankruptcy may be the correct option. A trustee can explain the implications and help you decide whether or not bankruptcy is the correct option in your situation.

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time frame to transfer house before bankruptcy in Ontario

Saturday, May 10th, 2008

Question: i have a house paid fully if i sell the house or transfer it to another name then file bankruptcy after 3 or 4 months is it ok? is my house safe? can i do it?

Answer: No, if you own a house that is fully paid for with no mortgage, and you go bankrupt in Ontario, you will lose your house.

When you go bankrupt you must answer the following question: “Within the last 5 years, while you new you were insolvent (ie. in financial trouble), did you sell or transfer any assets?” If you were to sell your house, or transfer it, and then go bankrupt 3 or 4 months later, that fact would be disclosed to the trustee. (Even if you lied to the trustee and didn’t disclose the sale you would probably still get caught, since all house sales are recorded by computer and are easily searchable). If you did sell the house, your bankruptcy would probably not end until either you got the house back, or paid to the trustee the equivalent value of the house.

More information can be found in this article on Will I Lose My House If I Go Bankrupt?

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Credit reports and bankruptcy in Ontario

Friday, May 9th, 2008

Question: I’m not exactly sure of everything I owe, so will my bankruptcy trustee get a credit report for me to get a total of all debts?

Answer: Most trustees are able to get a copy of your credit report before you file bankruptcy in Ontario. You can also get a copy of your credit report yourself at Equifax. A credit report is not necessary before filing bankruptcy, since all of your debts are included in the bankruptcy, whether or not they appeared on your bankruptcy paperwork, although obviously it is best to notify all creditors at the time you file.

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