Question: How long after bankruptcy in Ontario can I own a car in my name?
Answer: It is actually possible to own a car while you are bankrupt in Ontario. Under Ontario law, you are permitted to own a car, with no loans against it, worth up to $5,650 when you go bankrupt. More information can be found in this article on cars and bankruptcy in Ontario.
Question: I am about to go bankrupt in Ontario. My question is, can my home be repossessed? I have about only 5% equity in it and child who is under 18 lives with me there and it is their primary residence.
Answer: If you go bankrupt, the trustee is required to take your assets and turn them in to cash. In your case, if there is only 5% equity in your house, it would not be possible for the trustee to sell your home and turn it into cash, because the trustee would be required to pay real estate commissions on the sale (probably 5%), plus legal fees and a penalty to break the mortgage, so in your case you would probably not lose your home.
We suggest you get a comparative market value assessment from a real estate agent, and a print out of the amount owing on the mortgage, and then consult an Ontario bankruptcy trustee for more information.
Question: Once bankruptcy is filed and the process has begun, what assets, if any, must be returned or relinquished?
Answer: If you go bankrupt in Ontario, you are permitted to keep one motor vehicle worth up to $5,650 (provided there are no liens or loans against it), as well as $5,650 worth of personal possessions, and $11,300 worth of furniture. Full information can be found in our article on what you lose if you file bankruptcy in Ontario.
Question: Hi. If I sell my house and move my money to an offshore account and then file for bankruptcy (all my debts are unsecured) will there be any repercussions?
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Would I be able to sell my house to my brother and rent it from him. Then file for bankruptcy?
Answer: When you file for bankruptcy in Ontario, the trustee will ask you a number of questions, including “in the last five years did you sell any property?” If you sold your house and moved the money to an offshore account, you would be required to repay the money to the trustee before you would be discharged. Since all real estate transactions are easily traceable, lying about this is a criminal offense, and the maximum penalty is a jail sentence. So the answer to your question is yes, there would be serious repercussions.
You are able to sell your house to your brother and rent from him, but again, you must sell the house at fair market value, and the proceeds of the sale must be turned over to your trustee for the benefit of your creditors.
Question: Hi. Just bought a house with 100% mortgage 6 months ago, so essentially there is no equity in the house. I may be looking at bankruptcy as the only option at this point. Never missed a payment; all associated bills up to date. Will I have to sell/lose the house?
Answer: If you go bankrupt in Ontario, if you want to keep your house, you are required to pay to the trustee the equity in your house. In your case, if there is no equity, you would be able to keep your house.
Of course the other question to ask is whether or not it makes sense to keep the house. If there is no equity, and if the housing market in Ontario is declining, it may be better to surrender the house, find a place to rent, and then file bankruptcy.
Each person’s situation is unique, so to fully explore your options contact an Ontario bankruptcy trustee for a free initial consultation.
Question: i have a house paid fully if i sell the house or transfer it to another name then file bankruptcy after 3 or 4 months is it ok? is my house safe? can i do it?
Answer: No, if you own a house that is fully paid for with no mortgage, and you go bankrupt in Ontario, you will lose your house.
When you go bankrupt you must answer the following question: “Within the last 5 years, while you new you were insolvent (ie. in financial trouble), did you sell or transfer any assets?” If you were to sell your house, or transfer it, and then go bankrupt 3 or 4 months later, that fact would be disclosed to the trustee. (Even if you lied to the trustee and didn’t disclose the sale you would probably still get caught, since all house sales are recorded by computer and are easily searchable). If you did sell the house, your bankruptcy would probably not end until either you got the house back, or paid to the trustee the equivalent value of the house.
More information can be found in this article on Will I Lose My House If I Go Bankrupt?
Question: I have a healthy enough RRSP. I had repeatedly been told it was protected because it was “locked-in” and I could not touch it.
When we asses risk it is these pieces of information we consider. Is my RRSP available to creditors in my bankruptcy? It is locked in until 2015 (or longer). Once someone suggested I put it under an insurance but that seemed overkill.
Is it at risk if I go bankrupt?
Answer: Probably. If an RRSP is “locked-in” as a result of previous employment, where your pension is converted to an RRSP, it generally cannot be seized by the trustee. If there is a life insurance component it also is generally not seizable.
However, if your RRSP is invested in a locked in GIC that doesn’t mature until, say, 2015, the trustee would be able to seize it.
An added twist is that the rules regarding RRSPs will probably change later this year.
Given these complexities, you should gather all applicable RRSP documents and bring them in to your initial consultation with a trustee, who will be able to advise you on whether or not you will lose your RRSP in a bankruptcy.
Question: Are my exemptions specific to me or do my children have to include their personal clothing, computer etc. in with my assets?
And on the same topic. If my husband has assets and I have assets, is the bankruptcy only interested in my assets?
Both of our cars are in his name, does that mean one must be assigned to me?
My husband guaranteed a percentage of some of my loans. Our house is in his name and has little or no equity. Does my husband also have to declare personal bankruptcy? Can he make a proposal to pay his portion over time?
Answer: Only the bankrupt’s assets are considered in a bankruptcy. If a wife goes bankrupt, her husband’s and children’s assets are not considered (unless she transferred significant assets to them just prior to the bankruptcy).
If your husband has guaranteed some of your loans and you go bankrupt, he could either continue making payments on the loans, or go bankrupt or file a proposal. IF most of your debts are in common, a joint proposal may also be an option.
It’s impossible to cover all possible scenarios in a short answer on this web site, so we suggest that you consult a trustee for a free initial consultation.
Question: Presently I am not working, credit cards are maxed (65K), I also owe reciever general aprox 60K (from a inc small business – which is now non functioning and in the proccess of being disolved – there are no assesst but $12K owed to suppliers). My wife is working (and has a few bills of her own), no bills are behind, we just cant keep up. I am considering bankruptcy (not my wife)Our home has approx $240K of equity – I have taken my name off the title in 2007 – I am still on the mtg. We would like to keep our home, have me claim bankruptcy, get employeed again then rebuild or contiune living.
Is our home in jepordy even with me off the title?
Me with $130K+ of debt – is this the right choice for me? will it affect my wife and home in any way?
Thanks in advance
Answer: If you go bankrupt in Ontario, you will be asked to answer the question: “within the last 5 years, while knowingly insolvent, did you dispose of any property?” Obviously you took your name off title to the house in 2007, which is within the last five years; if you knew you were in financial trouble at that time, then yes, the house, or some portion of the equity, could be in jeopardy.
You have a number of options, one of which may be to offer the creditors a settlement through a proposal to avoid bankruptcy. Bankruptcy may also be an option. You should consult with a trustee to determine your next step, and to ensure you fully understand the ramifications of your decisions.
Question: I have no mortgage on my house and both of my cars(under my name) are paid for,one is worth $3500 – wife uses and the other $6500 – I use. My total debt is roughly $460,000 and my home is only worth $320,000. I have a boat worth $230,000 which has a mortgage for the same value of the boat, using the equity of the house to secure it. I also have a condo that I co signed with my parents which has a mortgage. My parents can afford to make the payments on the condo mortgage on their own. Will I be forced to sell my house or the condo or one of my cars if I declare bankruptcy in Ontario?
Answer: If you own a house with no mortgage when you go bankrupt in Ontario, you are required to either surrender the house to the trustee, or give the trustee the equivalent cash value (presumably by borrowing from a family member or other source, which is difficult to do).
If you own a house or condo that is fully mortgaged, the trustee will not take it, since it has no equity value. The same is true of a car or boat secured by a loan for it’s full value.
In Ontario you are permitted to keep one car worth $5,650 or less, so if you own two cars, with no liens against them, you would either be required to surrender one of the cars, or buy the car back from the trustee.
You have many different options for dealing with your debts, so we suggest that you contact an Ontario trustee for further information.