Bankruptcy Ontario: Free Information about Bankruptcy in Ontario

Ontario Personal Bankruptcy Blog

Posted on Monday, November 24, 2008

new property prior to discharge

Question: Can i purchase property before i receive my discharge? Can the trustee seize this property if there is an increase in its value before my bankruptcy is complete?

Answer: In theory, yes, you can purchase property while bankrupt. Practically, it is difficult to qualify for a mortgage while bankrupt. In theory, if you bought a property and it increased in value by $20,000 while bankrupt, the trustee could determine that it is "after acquired property" and attempt to realize on it, so the safest answer is to wait until discharged to buy property.

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posted by Questions @ 12:57 AM   0 comments

Posted on Sunday, November 23, 2008

Consumer Proposals

Question: What is maximum time allowed for creditors to accept a consumer proposal under any or all circumstances ?

Answer: On the 45th day after a consumer proposal is filed, all votes are counted. If more than 50% of the dollar value of the creditors voting have voted in favour, the proposal is accepted. If however, more than 25% have voted against, a creditor's meeting is held approximately 21 days later, at which time the final votes are counted. Your proposal administrator or trustee will be able to provide the exact dates in your situation.

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posted by Questions @ 12:19 PM   0 comments

Posted on Thursday, November 20, 2008

is it time to file for bankruptcy in Ontario?

Question: Two years ago i had a car accident and since then i have not been able to go back to work. for a while i received some benefits from insurance and then it stopped, i might get some money later on, but it will take some time before that happens. right now i owe my credit cards and line of credits around $90,000.00 and i can't make the monthly payments unless i get money from one credit card to pay for another one. do i have to declare banktruptcy or should i wait as long as i can?

Answer: The most common reason for residents of Ontario to declare bankruptcy is to prevent their wages from being garnisheed. In your case, if you are not working, you do not need to go bankrupt to prevent a wage garnishment, so yes, you could wait to declare bankruptcy.

However, if you are under significant stress and want to deal with your debts while you recover from your accident, bankruptcy is an option. You should consult a bankruptcy trustee and ask them to explain the pros and cons of bankruptcy in your situation, and then you can make a decision that's right for you.

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posted by Questions @ 5:53 PM   0 comments

Posted on Wednesday, November 19, 2008

proposals and bankruptcy

Question: Can a proposal be done after the 9 month bankruptcy period has been completed ? , with surplus still being paid ?

Answer: Yes, a proposal can be filed at any time. If you have not yet been discharged from bankruptcy, perhaps due to additional payments that you are required to make, it is possible to file a proposal. You should consult your trustee to see if that makes sense; it may be more efficient to simply complete your bankruptcy.

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posted by Questions @ 1:25 PM   0 comments

Bankruptcy and spouse's House

Question: My wife owns a condo in her name and mortgage in her name. I got married about 2 months ago and heard this is now considered a matrimonial home. I have recently been discharged from bankruptcy. If my wife sells her condo now can they come after me or her for the equity in her house since i now live there? I heard i need to sign the sale paper of her condo even though she owns it since we are now married? i dont want to cause any problems for her or myself.

Answer: You don't have to worry. It's your wife's house, and always has been. It has nothing to do with you or your bankruptcy. They can't come after you for money now that you have been discharged.

It is true that the house is now considered to be a matrimonial home, which means as the spouse you are required to sign off on the sale. However, it is still legally your wife's house, and has no impact on your bankruptcy. For further information, contact your bankruptcy trustee, or a real estate lawyer.

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posted by Questions @ 10:58 AM   0 comments

Posted on Tuesday, November 18, 2008

Immigration sponsorship and bankruptcy

Question: If I file for bankruptcy can I still sponsor my husband/kids abroad?

Answer: In most cases, if you are bankrupt it is difficult to be an immigration sponsor. You should discuss this in advance with your immigration lawyer, or with the government, before you decide to go bankrupt.

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posted by Questions @ 6:12 PM   0 comments

Property given to daughter

Question: If we had a property (that we had previously purchased for ourselves) and had given it to our daughter last year and it is now in her name only. After what amount of time is this property considered fully hers and will not be affected by our bankruptcy?

Answer: When you go bankrupt in Ontario, the trustee is required to ask you to disclose all property that you have sold or disposed of in the last five years while you knew you were in financial trouble. If you gave the property to her last year, it is possible that it will be affected by your bankruptcy. You should discuss this with your trustee to determine what affect, if any, it will have on your bankruptcy.

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posted by Questions @ 1:58 PM   0 comments

Posted on Monday, November 17, 2008

Voluntary Assignment of Wages and Wage Garnishment

Question: What is the maximum a person can be garnished? Can an employer take the full amount of my last cheque if I leave before the garnishment is complete?

Answer: Under the Ontario Wages Act, the maximum wage garnishment in Ontario is 50% of your wages. The only exception would be where the government can take 100% of the compensation received by a self-employed contractor. If you are an employee, your employer cannot take all of your last paycheque to satisfy a garnishment, unless there is a specific court order allowing a 100% garnishment.

For more information, consult this article on How to Stop a Wage Garnishment.

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posted by Questions @ 2:10 PM   0 comments

Can i go bankrupt without a job?

Questions: Can I go bankrupt in Ontario without a job? Also, if i had a student loan, and now revenue canada has the file, does this debt get cleared too?

Answer: Yes, you can file bankruptcy in Ontario without a job. However, most residents of Ontario that file bankruptcy are going bankrupt to prevent their wages from being garnisheed; if you have no wages, because you are not working, it may not be necessary to file bankruptcy until you return to work.

The rules governing a student loan and bankruptcy will determine whether or not your student loan would be discharged in a bankruptcy. In simple terms, if you have been out of school for more than seven years, your student loan will be discharged when you go bankrupt. Whether or not the file is with Revenue Canada is irrelevant. Contact a bankruptcy trustee for more information.

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posted by Questions @ 1:06 PM   0 comments

Posted on Friday, November 14, 2008

Who Does a Bankruptcy Trustee in Ontario Work For?

Question: AS A TRUSTEE , DO YOU WORK FOR THE CLIENT OR THE CREDITORS ? WHOSE BEST INTERESTS DO YOU PROTECT ?

Answer: This is an excellent question. If you file bankruptcy in Ontario, your bankruptcy file is administered by a licensed bankruptcy trustee. Technically, although you as the debtor choose your trustee, the trustee is appointed by the court to administer your estate. The trustee is therefore a court appointed official, working for the court.

In other words the trustee does not work for you, and the trustee does not work for the creditors. The trustee is appointed by the court (sort of like a judge) to make sure that all of the rules are followed. The trustee will explain the rules to you before you file bankruptcy. The trustee will also make sure that the creditors follow all the rules (such as preventing them from garnisheeing your wages after the bankruptcy starts).

Even though the trustee is not working for you, they are there to help make the process go smoothly, and therefore it is important to select a trustee that you feel comfortable with, and that explains your options in detail before you decide to file bankruptcy in Ontario.

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posted by Questions @ 12:48 PM   0 comments

Posted on Monday, November 10, 2008

Affect of bankruptcy on spouse?

Question: I am thinking of claiming bankruptcy but not sure how it will affect my spouse. I owe about 60,000 in student loans (more then 7 years old) and have 2 credit cards 4000 on one (in my name with a supplementary one for my common law husband)and 7000 on another (a joint one we both signed for). We have a house but the house and mortgage are in his name only. As well we have 2 vehicles. Both are in his name, one is paid for (and not worth much now) and the other is fairly new that we both signed a bank loan for. If I file for bankruptcy how will this affect us? Will he be responsible for all my debt or just our joint debt? I don't want to lose our house and car, just my student loans!

Answer: If you go bankrupt in Ontario, your husband becomes responsible for just your joint debts, not all of your debts. Since the house and mortgage are in his name only, your bankruptcy will have no impact on his house (even though you both live there). For more information you can read this article on How Bankruptcy Will Affect My Spouse, and the contact an Ontario bankruptcy trustee for a free initial consultation to get advice on your specific situation.

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posted by Questions @ 5:06 AM   0 comments

Posted on Sunday, November 09, 2008

life insurance and bankruptcy in Ontario

Question: What happens if an undischarged bankrupt receives a life insurance payout because she is the sole beneficiary on deceased spouses policy? Also, if the bankrupt "is" responsible to pay the creditors, which debts are involved when the bankrupt had her own personal debts along with "joint debts" with the deceased. Is the bankrupt responsible to pay back the full joint dept or just her half. In the bankruptcy, the joint debts were included in full value. I do know that when life insurance is left to a named beneficiary, that all debts owned by the policy owner are protected from the creditors which makes it confusing in this case. Bye the way, the deceased never did file for bankruptcy. I appreciate any info you can provide based on the laws here in Ontario Canada. Thank you

Answer: Any assets that a bankrupt person receives while an undischarged bankrupt can be seized by the trustee for the benefit of the creditors. If a bankrupt person receives life insurance proceeds, the trustee can seize the money. The trustee then takes the money and distributes it to the creditors. You state that "when life insurance is left to a named beneficiary, that all debts owned by the policy owner are protected from the creditors which makes it confusing in this case." This case is not confusing. Once the beneficiary receives the money, it's cash, and therefore is seizable by the trustee.

As for joint debt, the bankrupt person is liable for 100% of the debt, just as the joint debtor is liable for 100% of the debt; they are not each liable for their half.

On this web site we can only give general answers, and since the facts in each case may be different, we suggest you discuss this with your bankruptcy trustee, or with a bankruptcy lawyer.

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posted by Questions @ 4:07 PM   0 comments

Posted on Saturday, November 08, 2008

never finished bankruptcy in Ontario

Question: I filed for bankruptcy last year and never paid the trustee the full amount to proceed. I am now in a position too make the payments too my creditors without filing for bankruptcy,what can i do?

Answer: You should contact your trustee. If you can pay all of your creditors in full, with interest, you could apply to court to have your bankruptcy annulled. Once you file for bankruptcy, it only ends if you complete all of your duties, or if the court discharges or annuls the bankruptcy, so either way you should discuss it with your trustee.

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posted by Questions @ 8:53 AM   0 comments

Posted on Friday, November 07, 2008

Ontario Bankruptcy

Question: Under Ontario bankruptcy law, if you owe debt to numerous creditors, are you allowed to claim bankruptcy on majority of debt, but, keep certain debt alive? What are the restrictions and rules? example-bankrupt on % of debt? Thank-you.

Answer: No, if you go bankrupt in Ontario, you must disclose all debt; you cannot pick and choose. Bankruptcy must be fair to all creditors, so all creditors must be disclosed.

There are certain debts, such as child support arrears, that are not discharged in bankruptcy; you would be required to continue paying those debts. Also, secured debts are not discharged in a bankruptcy if you retain the secured asset (such as continuing to make payments on a car loan or house mortgage while bankrupt). Your Ontario bankruptcy trustee can provide you with more information.

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posted by Questions @ 11:42 AM   0 comments

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