Question: Two years ago I closed down my company. The bank insists I signed a personal guarantee ($65g) I say I did not. Now the matter is going to trial. (already went to hearing)
PST was owed $100K principle and $28k in interest and penalties because of the directors liability I agreed & paid $100k out of my own pocket which covered the principle. They have now decided that they want to collect the $28k in interest and penalties this matter is being debated as I write. We are dealing with the government here anything can happen and fairly fast.
I transfered ownership of house to my spouse 2 years ago, seeing as I had spent the equivalent of my share of the equity and she wanted to protect what was left. Seemed a good and fair idea but was it?
I have $30k RRSP. no contributions for 3 years. How safe is it?
I do not want to go bankrupt. I am ok with being a sob and giving everyone a hard time. I have at all times been 100% upfront with reporting etc to the CRA. They have said that they will charge me with fraud re title transfer I told them to “grow up”
Any advise? I know I have touched on a lot but advise would be good.
Oh yeah. I am in my 60s. self employed & losing my eyesight, in a few years will be unable to work.
Answer: The most obvious first step is to consult with your lawyer, and determine what will be the likely result of the issues that you describe. It is unlikely that CRA will charge you with fraud, but that is a question best answered by a lawyer. Your chances of success in the legal action with the bank are also best left to the opinion of your lawyer.
Another option would be to declare personal bankruptcy. Again, legal advise would be required before you make that decision.
In a bankruptcy you lose any contributions you have made to your RRSP in the last year; if you have not contributed for three years, the RRSP cannot be automatically seized by the trustee.
Since you transferred you house to your spouse two years ago, the trustee will be required to determine whether or not you were insolvent at the time of the transfer, and if you were, what was the value of your equity at the time of the transfer. If your share of the equity was, say, $20,000 at the time of the transfer, it’s likely you would be required to repay $20,000 as a condition of your discharge from bankruptcy.
Another issue in a bankruptcy is that you are required to pay a portion of your surplus income while bankrupt, so the more you make, the more you pay. If you have good income now, that will increase the cost of your bankruptcy.
As you can see, your situation is not straight forward, so you should consult both a lawyer and a bankruptcy trustee for more information.