April « 2009 « Ontario Personal Bankruptcy Blog

Archive for April, 2009

Retaining a newly financed vehicle in bankruptcy

Wednesday, April 29th, 2009

Question: Am I able to keep my new vehicle which I recently purchased ( financed thru the Car dealership ) if I declare Bankruptcy, since I need it to get to work and to pick up and drop off my daughter to her daycare centre?

Answer: Bankruptcy rules do not allow you to keep a vehicle simply because you require it to get to work, or to transport your children.

However, if the vehicle is financed through a car company, the vehicle probably has no “equity”, meaning the vehicle is worth about the same as the amount owing on the car. In that case your bankruptcy trustee will not seize your vehicle if you go bankrupt. However, you should confirm in advance with the lender that they will allow you to keep the vehicle, provided you continue to make the monthly loan payments. Car finance companies generally don’t have a problem with bankruptcy, but some banks do, so you should also discuss this with your trustee.

If there is no loan against your car, you are allowed to keep a car worth up to $5,650 in Ontario if you go bankrupt. An Ontario bankruptcy trustee can provide you with further information.

Posted in bankruptcy, car | No Comments »

FRO – Child Support and Bankruptcy

Tuesday, April 28th, 2009

Question: I am behind in my child support payments due to lack of work. I love my kids dearly, but I am simply unable to make the payments and could face jail time. If I file bankruptcy or even a consumer proposal, does the outstanding amount disappear or can you negotiate with FRO to accept a smaller amount?

Answer: No, child support does not disappear in a bankruptcy or a consumer proposal, and you cannot negotiate with FRO (Family Responsibility Office) to accept a smaller amount. If your income is reduced, in most cases it is necessary to go to court and have the court reduce the amount you are required to pay. With a revised court order FRO will reduce your payments.

In some cases a bankruptcy may still make sense, if it reduces your other debts and therefore frees up enough cash to allow you to get caught up on your support payments.

Posted in FRO, bankruptcy | No Comments »

Disclosing of Information about bankruptcy

Sunday, April 26th, 2009

Question: I had to claim bankruptcy in September of 2001. It is no longer showing on my credit report and I have a student loan that I have been paying every month for almost five years (no missed payments). My question is “if I go to borrow money or buy a house or whatever with a bank, do I have to tell them that I had a bankruptcy in my past?” The reason I ask is because I was honest last week and got screwed on the interest rate for a loan because of this bankruptcy 8 years ago!!
Thanks

Answer: It’s your decision what you disclose. Most lenders will run a credit report on you before giving you a loan, and in most cases your bankruptcy will not appear on your credit report after seven years, so if your bankruptcy was eight years ago it’s not likely they will know.

More importantly, most lenders don’t care what you did eight years ago. They care about today: what is your income today, what assets do you own today, how much of a down payment do you have today, etc., so a bankruptcy from eight years ago should not be an issue for most lenders.

Posted in bankruptcy | No Comments »

anxious about discharge and surplus income

Saturday, April 25th, 2009

Question: My calculations are that over the 9 month period my surplus would be 870 dollars. To clarify, that is 870 beyond the 1620 (9months X 180), a total of 2490 paid. Do you think they would keep me in bankruptcy for another 12 months based on that small amount? If so I’m tempted to work a little less, but that seems a little shady almost.

Answer: As a general rule, if your surplus income payments average less than $100 per month, as yours do, it is doubtful that your bankruptcy would be extended beyond the normal first-time bankruptcy minimum period of nine months. It is your decision whether or not you work less while bankrupt. Your trustee can provide you with further information.

Posted in bankruptcy discharge, surplus income | No Comments »

Forgotten Liabilities in bankruptcy

Friday, April 24th, 2009

Question: I was just discharged from a firstime personal bankruptcy. I have a debt that was forgotten and the creditor was not listed on the liabilities list for my bankruptcy. I just got served a notice from small claims court in regards to this bill, do I have to attend or do I give a copy of my discharge from bankruptcy?
Thank you for any information.

Answer: Even though you are discharged, you should contact your trustee and ask them to send the bankruptcy paperwork to the small claims court and the creditor so that they can stop the lawsuit.

Posted in bankruptcy discharge | No Comments »

how does bankruptsy affect getting a government job

Thursday, April 23rd, 2009

Question: hi
i filed for bankruptcy in feb, 2009 and now im being considered for a government job in the EI department …. they are going to be doing a personal screening and security check …. what are my chances …. i really need this job…. thanks

Answer: When applying for a job it is best to be honest. If the employer will be doing a credit check (and many employers do) then they will find out that you are bankrupt, so it is better that they find out from you in advance. There is no legal reason why you cannot work for the government while bankrupt, so your bankruptcy should not be a factor in whether or not you get the job.

Posted in bankruptcy | No Comments »

revenue canada and bankruptcy

Wednesday, April 22nd, 2009

Question: does revenue canada get put in as a list of debts that you can cover in aq bankrupsy or are you still liable to pay them the full amount?

Answer: Does owed to CRA (Canada Revenue Agency) are discharged in a bankruptcy, just like bank loans and other debts. Your trustee can explain the requirements in more detail.

Posted in taxes | No Comments »

previous bankrupsy

Wednesday, April 22nd, 2009

Question: if i had a bankrupsy 37 years ago and aply now what happens

Answer: If you file bankruptcy for a second time you are not eligible to be automatically discharged. You will be required to attend a court hearing, and the bankruptcy judge will determine how long your bankruptcy will last. Since your first bankruptcy was 37 years ago, it is likely a second bankruptcy would last an additional six months to nine months, although that is up to the judge.

Posted in bankruptcy discharge | No Comments »

Surplus income, proposal, and bankruptcy discharge

Wednesday, April 22nd, 2009

Question: If a couple files for bankruptcy after a failed consumer proposal due to loss of income are they penalized by an extended discharge if employment is found during bankruptcy because of a higher surplus income. If so would this not be penalizing for finding employment and defeat any initiative to seek employment?

Answer: Good question. Surplus income payments are not designed to be a “penalty”. The theory is that the more you make, the more you should be able to contribute to your creditors. However, you are correct. If, during your bankruptcy your income increases dramatically, it is possible that your bankruptcy will last longer than the minimum nine months.

However, if that did happen, you could discuss it with your trustee, and you could also request a discharge hearing in bankruptcy court and explain the circumstances to the bankruptcy judge, who may be lenient given the circumstances (ie. they probably would not punish you for working hard).

Posted in bankruptcy, surplus income | No Comments »

bankruptcy and income tax

Wednesday, April 22nd, 2009

Question: I am in the situation where my only alternative to peace of mind and finances is bankruptcy. If I file my tax return before I file for bankruptcy do you still lose the return or is this collected by the trustee to go towards paying some debt off?

Answer: If you have received your tax refund before you file for bankruptcy you don’t lose your refund for the prior year. Under current rules you lose your tax refund for prior years if you haven’t received them yet, and you lose your tax refund for the year of bankruptcy.

Posted in taxes | No Comments »

Bankruptcy in Ontario

Archive for April, 2009