Answer: Here are some facts you need to know:

First, all companies exist to make a profit.  Whether you go see a debt settlement company, or a trustee, they exist to make a profit.  They are private businesses.  For a debt settlement company to suggest that “they look out for the best interest of their client and Trustees don’t” is ridiculous.  They both exist to make a profit.

In addition, a debt settlement company is not required to follow any specific rules.  Many debt settlement companies are based in the USA, and they only operate in Ontario by telephone, so they are not regulated in any way.  In contrast, a trustee is required to be licensed by the federal government, and is required to follow all rules.  They are required to discuss all of your options, including debt consolidation, consumer proposals, and bankruptcy.  A debt settlement company is not required to tell you anything other than what they want you to hear.  It is therefore the licensed trustees who act in the best interests of their clients, because they are required by law to do so.

Third, most debt settlement companies charge a lot more than $900, so be sure you fully understand the full cost you are paying.

Fourth, a trustee, by law, can only charge you money after you have filed your consumer proposal or bankruptcy.  A debt settlement company can charge you $900, or whatever, up front, and then do nothing.  At least with a trustee you know that your procedure has started before you start paying.

Fifth, you refer to “a Trustee or a company such as BDO Canada”.  BDO is a trustee firm.

Here’s my advice: do your research.  There are lots of debt consultant horror stories, so be sure you understand who you are dealing with.  Talk to at least two different companies before you make a decision.  By all means talk to the debt settlement company, and ask them what they can do, and what it will cost, and what are the chances of success.  Then, talk to a licensed trustee (here’s a list).

Be sure that you meet with them in person; don’t do it solely over the phone, because a face to face meeting is the only way you can “look them in the eye” and know who you are dealing with (and you know then that they are actually based on Ontario).

Finally, here is a link to an article that answers the question Canada bankruptcy trustees work for the creditors, right? which addresses your question about whether or not the trustee works for you.

Answer: If there is no equity in your house, then selling it prior to bankruptcy is not a problem.  In fact, it’s probably a wise move, because if the house sells for less than you expect and there’s a shortfall, that shortfall could then be included in your bankruptcy.

Be sure to keep all documents relating to the sale.  It may also be wise to have the house appraised before you sell it, so that you can prove there was no equity.

Answer: If the house was transferred to your name in 2008 due to a separation agreement, there should not be any problem with you selling your house, since his bankruptcy didn’t happen until 2010.

If you are planning to sell the house, you can confirm this with your real estate lawyer.

Answer: Surplus income is conceptually simple: if your income, on average, is more than $200 over the limit set for your family size, your bankruptcy is extended for an additional year (from nine months to 21 months for a first time bankrupt).

If only one person in the family goes bankrupt, that person only pays their share of the penalty.  So if the total family penalty is $600, but the bankrupt spouse’s income is only 10% of the total, they are only required to pay 10% of $600, which is $60.  Since $60 is obviously less than $200, their bankruptcy would not be extended due to surplus income.

The surplus income calculation in a bankruptcy in Canada where only one person is bankrupt is a very complicated concept in practice, so we suggest that you arrange a no charge initial consultation with a licensed bankruptcy Ontario trustee to review the calculation in detail before you decide on bankruptcy.

Answer: Yes, you are permitted to attend your bankruptcy discharge hearing on your own; you may also bring a lawyer with you if you wish.

Where gambling is one of the causes of bankruptcy, it is very common for a court discharge hearing to be necessary.  We would strongly recommend that you have a meeting with your trustee prior to court and ask them the following questions:

1. What should I expect in court?
2. Will you be there in court with me?
3. Should I bring anything with me to court?

Answer: In most cases there is no requirement for your bankruptcy trustee to notify your employer.  The normal exceptions would be that your trustee would contact your employer if:

• you did not provide your trustee with proof of your monthly income, to allow them to calculate your surplus income payments in a bankruptcy, or
• you did not provide your tax information to allow your trustee to file your income taxes, or
• you did not provide your trustee with your current phone number, address or e-mail address, and they need to contact you, so they contact you through your employer, or
• your wages were being garnisheed; your trustee obviously must contact your employer to stop the wage garnishment.

Answer: Yes.  If your circumstances change after you file a consumer proposal, you have the option of declaring bankruptcy, which terminates the proposal.

Answer: A bankruptcy in Ontario will remain on your credit report with Equifax for six years from the date of discharge.

However, you can start to re-establish your credit immediately upon discharge.  One option is to apply for a secured credit card, which will appear on your credit report, and help you to re-establish your cred.

Answer: A bankruptcy discharge hearing is required when a creditor opposes your discharge, which appears to be the case in your bankruptcy.  In Toronto court it is not uncommon for there to be a backlog of between six months and one year to get a court date.  It is also not uncommon for hearings to be delayed for technical reasons (such as incorrect dates on affidavits, as has happened in your case).  Once a hearing is delayed, your name goes to the bottom of the list, and you’ll need to wait another six months, or a year, before your name comes up again.

Since each case is different, we would suggest you contact your trustee and ask them if they have heard anything from the court.  If it’s been a year since your last court date, you can ask your trustee to contact the court again to make sure your case is still on the list.

Beyond that, unfortunately, there is nothing you can do.

If not then is it possible to put the house up for sale and what ever is the profit, if any can go to my bankruptcy . Since it was not included in the bankruptcy at all i am not sure if i will be allowed to sell.

Answer: I’ll start my answer by clarifying your question.

A mortgage is a secured debt, and bankruptcy includes unsecured debts, so at the start of your bankruptcy you chose to continue making payments on your mortgage, so you could keep your house.  It’s not that your house wasn’t included in your bankruptcy; it’s simply that you chose to continue making your mortgage payments.

If you were to stop making your mortgage payments now, the bank would eventually foreclose on your house and sell it.  In that case you would be responsible for the resulting shortfall, if any, since the shortfall is a debt that came into being after you filed for bankruptcy.

Alternatively, you could sell the house yourself.  If you sell the house for more than is owing on the mortgage, including selling costs, the resulting equity would go to your trustee for distribution to your creditors.  If there is a shortfall, you would be responsible for the shortfall.

Without knowing the exact numbers in your case, we would strongly recommend that you meet with your trustee to review the numbers, and to fully evaluate your options.