January 20th, 2009
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.
January 13th, 2009
Question: My daughter is a separated single mom, financially she has hit rock bottom, she is receiving no subsidies and is paying rent, babysitting, hydro etc. more than she earns, she receives no child support as her husband is in rehab, no income, no job. A bank gave my daughter a line of credit for $25,000 knowing her income, that her husband was unemployed, no colateral and no co-signer, they have froze her account as she cannot make the payments. If she files for personal bankrupcy, will that include this line of credit at the bank?
Answer: Yes, a line of credit would be included if she filed for bankruptcy in Ontario. She should immediately open a new bank account at a new bank (where she does not owe any money) so that she has a place to deposit her paycheques and pay her rent.
For more information on bankruptcy, she should contact an Ontario bankruptcy trustee.
January 13th, 2009
Question: I was to receive a discharge on May 7, 2008. This was an order from the court made on August 7, 2007.
I have not received my discharge and my Trustee has done nothing to help me. Do I need to get a lawyer? How can I get my discharge. Why is this taking so long to get a signature on a document and mail it?
Answer: The first step is to contact your trustee (call them every day if necessary) to find out exactly what has happened. It could be that the paperwork is held up at the court, or there may be another issue.
If you are not satisfied with the answers you are getting from the trustee, you can contact the Office of the Superintendent of Bankruptcy.
January 12th, 2009
Question: I own a home (with a mtg)in my name. It has been like than for 3 years. I am married and my husband is not on title. He is thinking of going bankrupt. Is my house safe from his bankruptcy. I live in Ontario.
Answer: Your house is probably safe. The key issue will be whether or not the house was ever in your husband’s name. If it was, then the issue will be whether or not he was knowingly insolvent when it was transferred to your name. You should discuss this with a bankruptcy trustee or lawyer to review your specific situation.
January 8th, 2009
Question: Hi I can no longer afford to pay my credit cards once I stop paying them entirely can they take my pension money?
Answer: In general, no, it is not possible for a credit card company to garnishee pension income. Under the Ontario Wages Act wages can be garnisheed, but not pensions.
However, if you bank at XYZ Bank and have a bank account at XYZ Bank, the bank can go into your bank account and take money out to pay your credit card payment. Therefore, if you can’t pay your credit cards, you should open a new bank account at a new bank.
You can get more information on strategies for dealing with credit card debt by talking to a credit counsellor or a trustee in bankruptcy.
December 22nd, 2008
Question: We are in financial disaster. We renegotiated our mortgage in the spring, and because of bad credit, renegotiated a 13% first and second mortgage. Our house has just sold, the closing date is Dec 28th, and we just found out there is a lien registered on our home. With the sale, we are having to borrow 15K to close the sale, now we find out we will need to borrow 35K to get out of this house. We are paying insane closing fees of 9K in penalties, I have already had my bank accounts seized. At this point, both my husband and I feel we might as well both go bankrupt and let the banks fight it out. I already went bankrupt in 1997…now we are facing it again. Should we let the deal fall through and file for bankruptcy?
Answer: Your situation is very serious and urgent, so it’s critical that you get professional help immediately; you should contact an Ontario bankruptcy trustee as soon as possible. It is beyond the scope of this bankruptcy Ontario website to advise on an issue as critical as your home.
The decision on whether or not to go bankrupt will depend on many factors. The level of your debt is one issue, and obviously with the shortfall on your house there will be a $35,000 shortfall. If you can repay the $35,000, bankruptcy probably is not necessary. However, if you have other debts, bankruptcy may be an option.
December 21st, 2008
Question: Can i apply for bankruptcy for my son while he is incarcerated?
Answer: The only way that you can file bankruptcy on behalf of another person is if you are that person’s power of attorney, or if you have a court order.
The most common reason for declaring bankruptcy in Ontario is to prevent a wage garnishment. If your son is in jail he will not have any wages that can be garnisheed, so it may not be necessary for him to declare bankruptcy while in jail.
Also, a bankrupt person must attend two credit counselling sessions, and must be available for creditors’ meetings or if necessary a discharge hearing in court, which is of course impossible if the person is incarcerated, so it may be best to simply wait until he is released. A trustee or lawyer can provide you with more information.
December 17th, 2008
Question: What recourse is there if you think there is interference by the trustee ??? During our two meetings , there were many conflicting statements made and I am concerned. Can you change trustees midway through a bankruptcy due to lack of trust ????
Answer: Although it is the person who wants to go bankrupt that approaches a trustee, legally the trustee is appointed by the court, so the bankrupt person cannot change trustees. A creditor could request a creditors’ meeting and request that a trustee be substituted, but a bankrupt person cannot do that.
If you do not believe your trustee is following the rules, you should start by talking to your trustee, or perhaps the owner of the firm that your trustee works for.
Your next option would be to talk to the Office of the Superintendent of Bankruptcy and raise your concerns with them, since they regulate all trustees.
Finally, if your trustee opposes your discharge from bankruptcy, there will be a discharge hearing in bankruptcy court, and at that time you will have your chance to have your say in front of the Bankruptcy Registrar to explain your side of the dispute, and the court will then make a ruling.
December 17th, 2008
Question: Can the trustee influence the creditors acceptance or rejection of a consumer proposal ??? or must they stay out of the process?
Answer: Legally, the trustee is not permitted to “solicit” votes in a consumer proposal. The trustee, technically the Administrator of the consumer proposal, is required to act in a manner that is fair to all parties. It would not be fair for an Administrator to call up a creditor that they think might vote in favour to solicit their vote, while not contacting a creditor that may be more likely to reject the proposal.
That being said, the Administrator of the consumer proposal is permitted to answer questions, so if a creditor calls asking for information, the Administrator can discuss the proposal. In addition, the Administrator does submit a report to the creditors, Form 48, indicating that they believe the proposal is “fair and reasonable” to the creditors and the debtor, so in that sense it could be argued that the Administrator is influencing the acceptance of the proposal.
Your trustee can provide you with more information if you require a more detailed explanation.
December 17th, 2008
Question: my last year of full time study was april 2004. since then, i have been on interest relief on my loans (OSAP), i also hold pre-1999 osap student loans with the bank. i am considering declaring bankruptcy. i had done some research some months back and understood that students loans were exempt for 7 years after last graduation. if i declare bankruptcy now, it is only to cover not paying back the student loans, since after 4.5 years, it is proving difficult. what is the newest legistlation on this issue and how can i declare bankruptcy and have my loans be included in the amount?
Answer: Effective July 2008, the rule is as follows: Student loans are automatically discharged in a bankruptcy if you have “ceased to be a student” for more than 7 years. Since you were last a student in April 2004, it has not been seven years, so your student loans, even the ones from 1999, would not be automatically discharged in a bankruptcy.
There is another rule that says that, in the case of extreme hardship, you can apply to the bankruptcy court to have your student loans discharged after 5 years (instead of 7), so one option for you would be to wait until your student loans are 5 years old and then go bankrupt. However, there is no guarantee that the court will discharge your student loans.
Further information can be found on the student loan bankruptcy canada web site.