Answer: First, you are correct to question the credibility of a trustee that asks for post dated cheques in a bankruptcy.  Most trustees use pre-authorized electronic payments; it`s strange that they would make you write out 21 cheques.

Second, it would appear that the trustee has done a poor job of explaining the concept of surplus income in a bankruptcy in Canada.  A first time bankruptcy in Canada lasts for a minimum of 9 months.  However, if you have surplus income, your bankruptcy is extended for an additional year, for a total of 21 months.  It would appear that your trustee has assumed therefore that you will be required to pay $303 per month for 21 months in surplus income payments.

However, the trustee is required to determine surplus income each month, so it is very unusual for the trustee to determine the amount in advance.  A trustee is required to obtain proof of your income each month, at least for the first six or seven months, to determine how much you will be required to pay.

Here is an article that explains how surplus income is calculated, and here is a link to a surplus income bankruptcy calculator.

Answer: Yes, you can sell a house if property taxes are owing.  When you sell the house the property taxes will be paid first, even before the mortgage is paid out.

IF YES IS THERE A TIME LIMIT

Answer: Yes, if the debt existed when you filed your consumer proposal, and it was simply an oversight that they were forgotten, your consumer proposal administrator can notify the creditor at any time; there is no time limit.

Answer: You can do a search on the Office of the Superintendent of Bankruptcy’s website.  It costs $8 for each search.

Anyway, a few day ago I requested and attended a meeting with the Trustee to learn why she was opposing my discharge; however, she remains uncooperative only saying that the past 3 months before my filing was questionable. That was all the info. that I got from her.

Is this kind of behaviour normal for a trustee? I.e., witholding information from a client. Am I not suppose to have access to my file? In my opinion I believe that her behaviour is unprofessional, unethical, and vindictive. So what can I do before I attend my court date?

Answer: This type of behaviour is not normal for a trustee.  You are supposed to have full access to your file, and you should understand exactly why the trustee is opposing your discharge.  If the trustee is opposing under section 173 (1) (c) of the Bankruptcy & Insolvency Act that means they are opposing  because you incurred a lot of debt just before you filed bankruptcy.  You therefore have a few options:

First, you could ask the trustee for copies of all of the proofs of claims received from all of your creditors, so that you can review them and determine which one is accusing you of spending money before bankruptcy.

Second, you could hire a lawyer to represent you, but that is very expensive.

Third, if you believe the trustee is not doing their job, you can contact the Office of the Superintendent of Bankruptcy and ask that they ask the trustee to provide you with the required information.  You can also file a complaint if you believe that’s necessary.

I am considering submitting a consumer proposal and was wondering about the below:
1. If my proposal is rejected, will the creditors expect a full payment or can I revert back to making the same monthly payments as prior to submitting the proposal?
2. Are the creditors required to stop interest charges once the proposal is filled or only when it gets accepted?
Thanks

Answers:

If your proposal is rejected a creditors’ meeting is called, and prior to or at that meeting you can propose increased payments in an attempt to get the creditors to accept the proposal.  If that isn’t possible and the proposal is rejected, then you owe the full amount.  You can resume making payments to the creditors, but because you have now missed a month or two’s worth of payments while negotiating the proposal, it may be difficult to get caught back up.

Once the proposal is filed all interest stops.  However, if the proposal is rejected it’s as though it never happened, and they can add back the interest from the start of the proposal.

Your best option will be to meet with a consumer proposal administrator to review your options, and then decide how to proceed.

I don’t feel that I have been given good advice through this process. Can I change trustees before reactivating my file?

Answer: Based on your question it appears that the trustee is discharged, and you are not.

You could hire a bankruptcy lawyer to make an application to bankruptcy court to receive your discharge, so your original trustee would not be involved in the court application.

However, this is an expensive approach, so in most cases it’s less expensive to make an arrangement with your original trustee.  You could approach a different trustee, but again a new trustee would want a considerable sum of money up front to review the file, notify the creditors, and apply to court, so this option may also be expensive.

My ex at that time had other debts which he accrued by gambling during the marriage and as per our separation agreement, he was responsible for debts which were not joined.

I have heard from a mutual friend that he is unemployed and cannot pay his credit card payments anymore. He is thinking of filing for bankruptcy. I am not sure how he spent the 18 K which I gave him within one month!

Would the trustee come after my house, which is now in my name and my son’s name?

Answer: This is a question that you should ask your family law lawyer, since they will have all of the facts.  Here’s a general answer:

If the title to the house is still in both of your names then yes, the trustee could come after your ex-husband’s share of the equity.

If the title to the house is now fully in your name (and your son’s name) pursuant to the separation agreement, it is much less likely that the trustee will attempt to pursue the house, provided that the separation agreement was legal (which generally means prepared by a lawyer and confirmed by the court).

In your case it appears that the separation agreement was properly prepared and title has transferred, so you are probably safe, but again this is a question for a lawyer who can review all of the facts.

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.