Archive for the ‘what do I get to keep if I go bankrupt’ Category

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 been in serious debt for aproximately 3 years, and I have gotten a second job to try to pay the debt down, but I am struggling more now than before. I make approx $2800/m after tax. My monthly debt payments are approx 2400 including insurance, rent, utilities, and credit card/ loan debt. That does not include food, gas, etc. I am unable to get a consolidation loan as my debt servicing is too high, and I’m running out of ideas on how to pay things down. Of the $70,000 I owe, 47,000 is on a secured vehicle loan in which they consolidated some of my debt. The vehicle is worth max $20k. I am only 27, and I am unable to purchase a home/condo as I owe too much, and I have been considering bankruptcy for over a year now. I have a few questions. 1) Is it worthwhile to file bankruptcy? 2) If I was to file bankruptcy, would my employer be notified? 3) What would happen with my vehicle? Thank you in advance for your assistance.

Answer: Filing bankruptcy in Ontario is a possible option, but given your income you should also consider a consumer proposal. Your employer would not automatically be notified, unless your wages were being garnisheed.

As for your vehicle, it would depend on the lender. However, since the vehicle is worth $20,000 and the loan is $47,000, it would probably make more sense to surrender the vehicle and include the entire debt in the proposal or bankruptcy. Obviously you would need a replacement car before filing.

There are a number of ways to accomplish this, so we suggest you contact an Ontario Bankruptcy Trustee for a free initial consultation to review your situation in more detail.

Question: I am currently unemployed but close to receiving a job offer. I currently own a car, however it is old and has a lot of rust on it. Friends and family are advising me to dispose of it and get a new or newer used car in order to present a more positive image to my new employer (I am in sales).

This presents me with a dilema. Can I lease a car prior to bankruptcy and maintain the lease through the bankruptcy process or would I run into trouble?

Answer: Yes, it is not uncommon for someone to lease a car prior to going bankrupt. Because the leasing company is a secured creditor, you can continue to pay them while you are bankrupt.

However, while most leasing companies don’t care if you are bankrupt or not, there are some that may terminate your lease because you went bankrupt. Therefore, before you go bankrupt, we suggest you talk to a bankruptcy trustee to find out which leasing companies in your city are least likely to cause problems during a bankruptcy.

Question: I own an older highway truck that is worth approx. $6000 it is free of leins does this item fit under tools of the trade.

Answer: Probably not, but it depends on exactly how you use the truck to earn income. The rules in this area are quite strict. We suggest the following approach:

First, obtain an appraisal on the truck to confirm it’s value. Get the appraisal in writing.

Then, meet with a licensed bankruptcy trustee to determine whether or not your truck qualifies as a tool of the trade under Ontario law (the laws are different in each province).

Finally, if your truck is not a tool of the trade, remember that in a bankruptcy in Ontario you are permitted to keep one motor vehicle worth up to $5,650. If your truck is worth $6,000, then you could pay the trustee the difference, $350, and keep the truck.

Question: I own property in the United States – if I claim bankruptcy in Ontario will I lose my property in the United States?

Answer: If there is equity in the property, yes, it is likely you will lose it, or be required to pay to the trustee the value of the property if you wish to keep it.