bankruptcy Ontario « Bankruptcy Ontario: Free Information about Bankruptcy in Ontario

Pay Day Loans

Friday, July 23rd, 2010

Question: I signed my paperwork on May 31, 2010 to go bankrupt for the 1st time. I have debt that equals above $75000. I have been using payday advance loans for over 2 years and on and off prior to that. Recently I have defaulted on the pay day loans that I have outstanding (2) My question is am I able to include these 2 pay day loan in my bankcrupcty even though I already sign and started the bankcrupcty process?

Answer: No, debts that you incurred after you filed bankruptcy cannot be included in your bankruptcy.

Under no circumstances should you be borrowing from payday loan places while you are bankrupt. In fact, it is illegal to borrow while bankrupt unless you specifically advise the lender that you are bankrupt.

You should immediately contact your trustee and determine what course of action you should pursue from this point forward.

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Is there a governing body for Bankruptcy Trustees in Ontario?

Thursday, July 22nd, 2010

Question: I am trying to file bankruptcy in Ontario and after several meetings with the Trustee office I keep getting different answers and run around. I feel the person working on my file has made some errors which I now may have to pay for. Who can I contact to make a complaint and get the answers I require? I no longer trust this Trustee office and feel that they are being dishonest.

Answer: All bankruptcy trustees in Canada are licensed by the Office of the Superintendent of Bankruptcy. You can contact them on their website, and they can advise you on the process for making a complaint.

There are many bankruptcy trustees in Ontario, so if you meet with one and are not satisfied with the information they provide, we recommend that you contact another Ontario bankruptcy trustee until you find a trustee that you can work with. It’s your choice, so getting a second opinion is usually a prudent choice.

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Bankruptcy in Ontario and gambling

Friday, July 16th, 2010

Question: I met with an Ontario bankruptcy trustee and need to fill out the forms to file for bankruptcy in Ontario. His questionnaire says “in your own words, what circumstances have caused your financial problem?”. Do I need to disclose the fact that I have a gambling addiction or is it okay to be vague and just say that I over-extended myself over a long period of time? I have heard that there can be additional penalties if your bankruptcy is due to gambling.
thank you.

Answer: You are not eligible to be automatically discharged from bankruptcy if gambling was the cause of your financial problems; you would be required to attend a discharge hearing before the Bankruptcy Registrar, and they would determine whether or not your bankruptcy would be extended. Generally the Registrar would want you to confirm that you are no longer gambling (perhaps through a voluntary self-exclusion at the casino), and also providing proof that you have attended gambling counselling.

In most cases your creditors will be aware of your gambling. They will see cash advances being taken from your credit cards, bank loans and lines of credit, and they may also have records of cash advances taken on your debt or credit cards at the casino, or through on-line gambling. So, if you don’t disclose it, and they discover it later, you are in much more trouble than if you had simply disclosed it initially.

We therefore recommend that you be honest; that is generally the least risky alternative.

If you are concerned about a bankruptcy discharge hearing, another option is to file a consumer proposal. Once the creditors accept your proposal, you simply make the payments; there is no discharge hearing. Consult a consumer proposal administrator for more information, and to arrange a no charge initial consultation.

Tags: gambling
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Is Bankruptcy in Ontario Public Knowledge?

Thursday, July 15th, 2010

Question: If a person claims bankruptcy in Ontario, is it public knowledge? Can anyone find out about it in Ontario?

Answer: Yes, personal bankruptcy is a legal process, and it is public knowledge. If you declare bankruptcy a note will be placed on your credit report, so any lender than does a credit check on you will know that you have declared bankruptcy. In most cases that note is removed six years after your discharge from bankruptcy.

The Office of the Superintendent of Bankruptcy maintains an insolvency database that records all bankruptcies filed since 1973, so it is a matter of public record.

However, in most cases, once you are discharged from bankruptcy lenders will allow you to repair your credit, so as time passes your prior bankruptcy is less of an issue.

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Do I Lose My Car and RRSP if I Go Bankrupt in Ontario?

Tuesday, July 13th, 2010

Question: I am in arrears with my income taxes and other bills. I have some RRSP’s and a car that is financed. If I claim bankruptcy can I keep my car and what happens to the RSPs?

Answer: Assuming that your car is worth the same or less than the amount owing on the loan, you could keep your car if you declared bankruptcy, provided you continued to pay the loan. Alternatively, you could stop paying the loan and return the car when you declare bankruptcy.

You can keep your RRSPs when you go bankrupt, except for the amount that you have contributed in the last year.

An Ontario bankruptcy trustee can provide you with more details in their free initial consultation.

Tags: bankruptcy Ontario, car
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Principal Residence and Bankruptcy in Ontario

Monday, July 12th, 2010

Question: My wife bought the house I live in 20 years ago- she has paid all the bills and mortgage etc – I am the one who may have to go bankrupt due only to Tax owing – I do not have any assets -is the house at risk?

Answer: Your wife’s house is not at risk if you declare bankruptcy in Ontario. Since she has always owned the house, and she has always paid for it, and since you are not separated from her, it’s her house.

More information can be found in this article on what happens to a house in bankruptcy, or consult a lawyer or a bankruptcy trustee to review your situation to determine if there are any other factors that would influence your decision to file bankruptcy.

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GST/HST Rebates and Bankruptcy in Ontario

Monday, June 28th, 2010

Question: If I go bankrupt in Ontario, who gets the HST rebate cheque? Me, or the trustee?

Answer: The standard answer is that the HST rebate cheque goes to the trustee. It forms part of the proceeds in your estate, and is then distributed to your creditors at the end of your bankruptcy. Canada Revenue Agency (CRA) is notified of every bankruptcy in Ontario, and they automatically re-route all HST cheques and tax refunds to the trustee.

There are some exceptions to this rule in certain cases, so you should contact your trustee for further information, or you can consult this article on HST rebates and bankruptcy in Ontario.

Tags: HST Rebate
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Spouse claiming bankruptcy in Ontario

Thursday, June 24th, 2010

Question: My spouse and I are separated, he is claiming business and personal bankruptcy, the only thing left in both our names is the house which is currently up for sale, what happens to me? Do I lose the house and contents?

Answer: If the house is currently up for sale, presumably at some point the house will be sold. Since the house is owned jointly by both of you, the proceeds from the sale will be split equally between you and your husband. If your spouse is bankrupt, his share will go to his trustee.

If you own items in your house, they remain your possessions; your husband’s bankruptcy doesn’t impact on your possessions.

More details can be found in this article on how a bankruptcy affects a spouse.

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Income tax returns, GST/HST and bankruptcy in Ontario

Wednesday, June 23rd, 2010

Question: What Happens with my income tax return or GST or HST Payments? I was lead to believe that I would receive these after my Ontario bankruptcy is discharged, is this true?

Answer: It depends on the amount of funds in your bankruptcy estate at the end of your bankruptcy. According to Rule 59 of the Bankruptcy & Insolvency Act Rules, if there will be enough funds in your estate to distribute money to your creditors (after the trustee’s fees and expenses are paid), the trustee will return to you any GST/HST received that would otherwise have been distributed to your creditors.

In most cases the trustee cannot make this determination until your bankruptcy is over. When the trustee does their final accounting, they return any excess HST to you.

More information can be found in this article on Do I Lose My HST Rebate When I Declare Bankruptcy in Ontario?

Tags: HST
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Ontario HST cheques

Wednesday, June 9th, 2010

Question: This week, cheques are being sent out for Ontario residents regarding the HST. This morning, my son got his for $100.

I filed for bankruptcy in April 2009. I satisfied all conditions and was supposed to be discharged this past January. However, the trustee made a mistake – they opposed the discharge because they claimed I did not attend the final counselling session. I and the counselling agency appealed this successfully and the trustee claims that the paperwork is in the hands of the court. They, the trustee, claim that the courts are slow and will take from six months to a year to discharge my bankruptcy. My question first is – can I expect a rebate for the HST? also, is my case normal? I feel like I’m up against a brick wall with these people .

Answer: No, your case is not normal. In the vast majority of cases, if your counselling sessions are completed, and there are no other reasons to delay your bankruptcy discharge, you would be discharged. Most trustees will meet with the bankrupt prior to their scheduled discharge date to review any outstanding issues. At that time, if they were missing a counselling certificate, they could have obtained it without the need for a court application for your discharge. However, at this point, if the trustee has applied to court, there is probably nothing more you can do, other than to stay in touch with the trustee to find out when your court date is scheduled.

As for your HST cheque, that’s a question for your trustee. CRA will automatically send all HST cheques to the trustee until the person is discharged. Since you are not discharged, it would be logical to assume the cheque will go directly to the trustee. Whether or not you should be receiving the cheque can be determined by the trustee, based on the funds in your estate.

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