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.

Does this seem normal?

We are getting worried…

Should we contact someone within the government or bankruptcy offices about this??

Thanks in advance!

Answer: You should start by talking to your trustee.  The delay may be normal, or there may be other issues.  Ask your trustee to confirm the status of your discharge.

If you are not satisfied with your trustee’s answer, you could contact the Office of the Superintendent of Bankruptcy and ask them to investigate, but that is a step that should only be taken after you have discussed it with your trustee.

Answer: The amount you are required to pay when you declare bankruptcy in Ontario is based on your family size, and your family income.  If your income increases while you are bankrupt (in your case because you start receiving child support), it is possible that you would be required to pay more in your bankruptcy.

You can learn more about surplus income payments in bankruptcy, and then contact a licensed trustee to do the calculation to determine if child support would increase your bankruptcy payments.

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.

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.

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.

My income is $95,000 per year and I owed $116,000 in unsecured debt.

I was supporting one of my common law’s two children, then half way through the nine month period, the other moved in with us.

Since then I’ve asked on several occasions for them to recalculate my surplus income. My original trustee left the business. They assigned me to another trustee from whom I’ve only heard once. That trustee has since left the business as well leaving one person to ‘wind up’ their business due to the death of the person who owned the company. The bottom line is that I’ve gotten no answers.

They sent me a letter last July stating that I missed a court date for a discharge hearing but I’d never been made aware of that required appearance. After contacting them, they advised that I had to finish my counselling and they would apply for another court date.

I asked them again to send me a revised amount owing based on the changes to my situation.

I’ve heard nothing from them since. I’ve called and left messages, but the message says they are no longer in the office as they’ve wound down the business and check messages occasionally.

I want to change trustees because clearly I’m not getting any level of service and want to deal with the amount owing so I can get on with my life.

As an aside, I am more than a bit annoyed because (although I didn’t know it at the time of filing) I could have done a consumer proposal at about 50 cents on the dollar and probably have avoided this whole mess.

My first thought is to see a bankruptcy lawyer, but I can’t afford that.

Any advice.

Answer: You are correct, you got very bad advice.  A consumer proposal was probably the logical solution to your problems initially.

You have three choices.

First, you could contact the Office of the Superintendent of Bankruptcy and advise them that your trustee is not responding to your requests for information; perhaps they can help.

Your second option would be to contact a bankruptcy lawyer.  I realize that you said that you can’t afford it, but if you are earning $95,000 per year, it may be wise to save $1,000 and get some good, independent advice from an expert.  You are currently an undischarged bankrupt, which in the long run will cost you a significant amount of future hassle and money.

Your final option may be to file a consumer proposal.  It’s unusual to file a proposal while bankrupt, but it is not impossible.  If the proposal is accepted by your creditors, it serves to end your bankruptcy. An Ontario bankruptcy trustee can provide you with more information.

Answer: Yes, you can contact the Office of the Superintendent of Bankruptcy to file a complaint against a trustee.

Answer: Your mother has a number of options.

First, she could deal with her debts on her own.  That may involve selling her house, and using the money to repay the mortgage and her other debts.  Obviously this option only works if there is equity in the house, and if she can find an affordable place to rent.

With $100,000 in unsecured debts, and income of $10 per hour, it is unlikely that she could propose a consumer proposal that would be accepted by her creditors.

She could simply do nothing.  Her creditors will phone and send her letters, but it’s possible that they won’t pursue her in court.  Of course that is also a very stressful option, and should only be considered if she is willing to put up the phone calls, and the risk of having a judgment filed against her.

Her final option would be to file for bankruptcy.  That would discharge her debts.  However, before making this decision, she must determine what impact a bankruptcy will have on her house, so we suggest a free initial consultation with an Ontario bankruptcy trustee so that she can review all of her options before making a decision.

Answer: If you file bankruptcy in Ontario, you are required to either surrender your house to the trustee, or pay to the trustee the equity in your house.  Equity is the value of the house (the difference between the value of the house, and the amount owing on the mortgage and other charges).  If there is no equity, you could keep your house (provided you keep the mortgage in good standing).  In your brother’s case, if the house is owned jointly by him, his sister, and his brother, he would only be required to pay his share of the equity (presumably one third).

He should get an appraisal on the house, and confirm the balance owing on the mortgage, and then meet with a trustee to discuss his options.

For the car, if there are no loans against it, you can keep a car worth up to $5,650 if you go bankrupt.  Since his car is old, it is probably not worth more than that amount, although again he can have it appraised to be sure.

More information can be found in this article on what happens to your house if you file bankruptcy in Ontario, and what happens to my car if I file bankruptcy in Ontario.

For a review of his exact situation, he should consult an Ontario bankruptcy trustee for a no charge initial consultation.