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

Help I think I am in serious trouble

Tuesday, November 2nd, 2010

Question: I am a second time bankrupt…previouisly discharged in 2001– my court date is set for Nov 23rd …I just started a job after being unemployed since Dec of last year….I still owe 1300 to the trustee & absolutely cannot pay this by the 23rd. what will happen now? will I now have to start paying back all those creditors…help…the trustee will not return my calls.I am in serious trouble here..someone please tell me what will happen..

Answer: You need to talk to your trustee. If they won’t answer your calls, go to their office and wait until they will talk to you. (This is why you want to be sure you are dealing with a reputable trustee in Ontario).

In general, at a court discharge hearing you will have an opportunity to tell your side of the story. Be concise and to the point. If you agree that you still owe money, and you can’t pay it all at once, ask the judge to allow you to make the payments over a period of a number of months, based on what you can afford.

It is important to be prepared before going to court, so in all cases we strongly recommend that you meet with your trustee before your court date so you know what to expect.

Tags: bankruptcy discharge
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House Equity in Bankruptcy in Ontario

Monday, September 20th, 2010

Question: I am in the process of filing bankruptcy in Ontario but have not signed the papers yet. There is $8000 equity in my house however there is still 4 years to go on the mortgage that if I sold now I would owe more than I make in closing costs and the rate differential however the trustees say they want us to pay the $8000 which is really not possible, not even in payments. We make just under what is determined for our family size and there is no extra monies. If either of us did get another position to help cover that cost it would only increase the length of our bankruptsy. I would like to go through with the bankruptcy but can’t afford to agree to this extra expense? Consumer proposal would not help. Don’t know what to do.

Answer: You have three choices:

First, you could get a second opinion from a different Ontario bankruptcy trustee. It appears that if the trustee was to seize your house and sell it, after paying disposition costs and the penalty to break the mortgage there may not be any equity. Alternatively, the trustee could apply to court for an extension to your bankruptcy to allow you to pay the equity over a longer period of time.

Second, you could sell the house. If there truly was no equity, you would have proof, and your bankruptcy would end in the normal period of time. Obviously that’s a very drastic solution.

Third, you could consider a consumer proposal. If there would be no surplus income in your bankruptcy, the consumer proposal could offer to pay the equity in your house over an extended period of time to make the payment affordable. Again, you should consult a different Ontario bankruptcy trustee for a second opinion.

Tags: bankruptcy, home equity, house
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Personal Bankruptcy – Do You Need a Trustee?

Wednesday, September 15th, 2010

Question: Can you do your own Personal Bankruptcy without a Bankruptcy Trusty, and how do you do it if you can?

Answer: In Ontario, and in Canada, you require the services of a bankruptcy trustee. The bankruptcy process is a legal process, and therefore legal assistance is required.

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Will bankruptcy in Ontario stop second career funding?

Wednesday, September 15th, 2010

Question: My common law, alcoholic, unemployed spouse has drained me financially, causing bills to go unpaid for months, including the mortgage (everything is in my name,house, mortgage, bills). I am in debt over 20,000 not including the mortgage. I have just been approved for second career funding to return to school full time and have been granted basic living expenses. If I file for bankruptcy will I lose my second career funding monies for school/basic living expenses?

Answer: Generally, no, filing for bankruptcy in Ontario does not cause you to lose second career funding, or OSAP, or other forms of government assistance for further education. You should contact the funding agency first to confirm that a bankruptcy in Ontario will not impact your ability to receive funding. In many cases they will ask for a letter from your bankruptcy trustee confirming that the trustee will not seize the money if you are bankrupt.

Tags: OSAP, second career funding
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supplementary credit cards and bankruptcy in Ontario

Monday, September 13th, 2010

Question: My ex spouse has a supplementary credit card, how will this affect my filing for bankruptcy?

Answer: If you go bankrupt, you are no longer responsible for your debts. If your spouse, or ex-spouse, or anyone else has co-signed a loan with you, or is joint on a credit card with you, they remain responsible for the debt, because they have not filed bankruptcy.

Confusion arises with supplementary cards. If both you and another person jointly applied for a card, there is no doubt that you are both responsible. However, if you applied for the card, and then on the application form simply ticked the box that says “please send a card to my spouse as well”, then your spouse didn’t apply for the card. Under those circumstances they are not legally responsible for the debt, because they did not agree to be liable for the debt.

However, if your spouse had a card issued in their name, and if they used the card, it is more difficult for them to assert that it’s not their card. Their are cases where a credit card company will pursue the supplementary card holder for the debt, because they used the card.

Your first task will be to review your monthly statement and any card holder agreements you have to see if it’s a joint card, or a supplementary card.

For further confirmation you could contact the credit card company and ask them if your ex is responsible for the card (although it’s possible the customer service person at the credit card company won’t provide you with a legally binding answer).

Your final option is to meet with a bankruptcy trustee and have them review your documents and provide you with further advice.

For more information, please see this article on Will My Bankruptcy Affect My Spouse?

Tags: bankruptcy credit card, bankruptcy spouse
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Corporation Bankcruptcy

Thursday, July 22nd, 2010

Question: I owe taxes to the CRA due to reassessment and they are the only creditor I have. Due to the penalties and interest it will be impossible to pay them. The corporation has no income right now. I have a house and it has a good equity on it. Can I still make application for bankruptcy? what happens to my house and my cars?

Thanks

Answer: The answer depends on whether or not it is you personally that owes the taxes to CRA, or whether it is the corporation that owes the taxes. On the assumption that you owe the taxes, if you filed bankruptcy you would probably lose your house, or be required to pay the equity in your house to your estate.

Since your situation is complicated, and there are many variables, we strongly recommend that you consult a bankruptcy trustee to arrange an initial consultation to review your specific situation.

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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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Documentation, finalization, no response from Trustee

Thursday, July 15th, 2010

Question: We made an arrangement with our bankruptcy trustee to pay around $36,000 as a final payment for what was owing on the equity we had when we went bankrupt. We paid this amount 7 months ago, and have received NO documentation, final notices, or any word that our bankruptcy is dismissed, or finished, or ANYTHING.

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.

Tags: bankruptcy discharge
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Child Support and Bankruptcy in Ontario

Wednesday, July 14th, 2010

Question: I am thinking of claiming for personal bankruptcy. I have two children and at this time I am not receiving any child support from their father. If I claim bankruptcy and he then starts paying child support how does this affect me?

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.

Tags: surplus income
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