Bankruptcy Ontario: Free Information about Bankruptcy in Ontario

Ontario Personal Bankruptcy Blog

Posted on Friday, May 30, 2008

UPON RECEIVING A LETTER OF DISCHARGE

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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posted by Questions @ 12:09 AM   0 comments

Posted on Tuesday, May 27, 2008

Owing Canada Revenue Agency and Bankruptcy in Ontario

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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posted by Questions @ 8:09 PM   0 comments

Impact on corporate bankruptcy

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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posted by Questions @ 1:39 PM   0 comments

Posted on Saturday, May 24, 2008

mortgage and bankrutcy

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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posted by Questions @ 10:31 AM   0 comments

Posted on Thursday, May 22, 2008

Consumer Proposal and OSAP

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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posted by Questions @ 10:01 PM   0 comments

Posted on Wednesday, May 21, 2008

Pay Increases while Bankrupt

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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posted by Questions @ 9:58 PM   0 comments

Child Tax Credit and Bankruptcy in Ontario

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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posted by Questions @ 1:47 PM   0 comments

Posted on Tuesday, May 20, 2008

Divorce settlement and bankruptcy in Ontario

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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posted by Questions @ 12:53 PM   0 comments

Posted on Friday, May 09, 2008

time frame to transfer house before bankruptcy in Ontario

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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posted by Questions @ 11:23 PM   0 comments

Credit reports and bankruptcy in Ontario

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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posted by Questions @ 2:33 PM   0 comments

Posted on Wednesday, May 07, 2008

Questions and Answers

Question: I asked an Anonymous Question. Where do I go to read the answer?

Answer: If your question is posted, you can scroll down to find it. However, due to the volume of questions we receive, many of which are repeats of questions we have already answered, not all questions are answered. Click on the Find A Trustee link to send a question directly to a trustee in your city for a personalized answer.

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posted by Questions @ 2:14 PM   0 comments

RRSP's and bankruptcy in Ontario

Question: I have a healthy enough RRSP. I had repeatedly been told it was protected because it was "locked-in" and I could not touch it.

When we asses risk it is these pieces of information we consider. Is my RRSP available to creditors in my bankruptcy? It is locked in until 2015 (or longer). Once someone suggested I put it under an insurance but that seemed overkill.

Is it at risk if I go bankrupt?

Answer: Probably. If an RRSP is "locked-in" as a result of previous employment, where your pension is converted to an RRSP, it generally cannot be seized by the trustee. If there is a life insurance component it also is generally not seizable.

However, if your RRSP is invested in a locked in GIC that doesn't mature until, say, 2015, the trustee would be able to seize it.

An added twist is that the rules regarding RRSPs will probably change later this year.

Given these complexities, you should gather all applicable RRSP documents and bring them in to your initial consultation with a trustee, who will be able to advise you on whether or not you will lose your RRSP in a bankruptcy.

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posted by Questions @ 2:03 PM   0 comments

Personal Articles and Bankruptcy in Ontario

Question: Are my exemptions specific to me or do my children have to include their personal clothing, computer etc. in with my assets?

And on the same topic. If my husband has assets and I have assets, is the bankruptcy only interested in my assets?

Both of our cars are in his name, does that mean one must be assigned to me?

My husband guaranteed a percentage of some of my loans. Our house is in his name and has little or no equity. Does my husband also have to declare personal bankruptcy? Can he make a proposal to pay his portion over time?

Answer: Only the bankrupt's assets are considered in a bankruptcy. If a wife goes bankrupt, her husband's and children's assets are not considered (unless she transferred significant assets to them just prior to the bankruptcy).

If your husband has guaranteed some of your loans and you go bankrupt, he could either continue making payments on the loans, or go bankrupt or file a proposal. IF most of your debts are in common, a joint proposal may also be an option.

It's impossible to cover all possible scenarios in a short answer on this web site, so we suggest that you consult a trustee for a free initial consultation.

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posted by Questions @ 1:59 PM   0 comments

Posted on Tuesday, May 06, 2008

co applicant filed bankruptcy in Ontario

Question: my ex husband and i got divorced a year ago. Neither he or i had good enough to assume or even split the $20,000 line of credit . He was maintaining the interest on it. I just found out he has gone bankrupt and the bank is coming after me for the money. I cant afford to pay all of that and I am drowning in debt as it is, what is my options?

Answer: If you can't afford to pay the bank in full, you have four options:

First, you could do nothing, or pay them what you can afford. Unfortunately you run the risk that they take you to court and attempt to garnishee your wages.

Second, you could attempt to file a Debt Management Plan through a non-profit credit counsellor. Under a Debt Management Plan you are required to pay the debts in full over a two to five year period, which may not be possible in your case.

The third option would be to file a consumer proposal, where you offer to pay some, but not all, of the amount owing.

If you can't afford that, the final option is to declare personal bankruptcy. Bankruptcy eliminates your debts, but also impacts on your credit rating.

The correct option for you will depend on your monthly income, and whether or not you own any assets, like a car, house, or RRSP.

To find the answers in your specific case we strongly recommend that you arrange a no charge initial consultation with a trustee in bankruptcy licensed by the federal government so that they can review all of your options with you, and then you can make an informed decision.

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posted by Questions @ 4:07 PM   0 comments

Posted on Monday, May 05, 2008

Bankruptcy and Employment in Ontario

Question: I am currently sending out resumes and applying for new employment. Will a new employer or potential employer be able to obtain information concerning my recent bankruptcy and will a recent bankruptcy have any bearing whatsoever on my obtaining employment?

Answer: It depends on the employer. If you are getting a job where you must be bonded, it may be more difficult to get bonded if you are an undischarged bankrupt. Other professions, such as investment advisors, may not employ you while you are bankrupt in Ontario.

However, in the vast majority of cases being bankrupt has no impact on a potential job. Most employers don't do credit checks as part of the hiring process, so they probably won't even know you are or were bankrupt.

To avoid surprises, if you are offered a job and the employer requests permission to do a credit check on you, be sure to disclose to them in advance that you are bankrupt; they will find out if they do a credit check, so in most cases it's better if they hear about your bankruptcy from you first.

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posted by Questions @ 2:20 PM   0 comments

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