June 8th, 2008
Question: Hi, i got discharged 2 weeks ago from my first time bankruptcy. I’m planning to buy a house immediately from a private financeire and borrow the down payment from a relative.
1. Can any of my creditors/trustee void my bankruptcy based on the fact that i will own a house not long after my discharge.
2. Does the loan have to be registered anywhere or is an agreement on paper good enough
3. If yes, how long can i wait before i can own something and guarantee that no one will come after me.
Answer: Once you are discharged, your bankruptcy cannot be re-opened, so you are free to buy a house or do whatever you wish. The only exception to that rule would be where the trustee or a creditor can prove that you lied or did not fully disclose your assets while bankrupt.
In your case, you have a relative that is willing to loan you the down payment on a home, so you are free to do as you wish.
Our only caution would be to be very careful getting back into debt at this time. The real estate market in Ontario is declining, so borrowing from a relative and borrowing for a mortgage puts you back in debt, which may prove difficult to service if the value of your new house declines over the next two years. In most cases it is better to save for a significant down payment, and then buy a house in the future with a minimum amount of mortgage debt.
June 7th, 2008
Question: I am separated from my spouse and he is not paying his share of debt which is forcing me into personal bankruptcy. I have tried to sell my home to cover these debts but have not until now and find myself sinking deeper and deeper. My husband has been gone since Nov 07 and has contributed nothing to any debt. Is there some recourse I can take as I would not be declaring bankruptcy if he would pay the debt he owes me. We were married for 30 years and it is before the courts now but I may not be able to last until the court date.
I have tried to save my credit and at this point it is ok but I can no longer keep up. Please advise what I can do.
Answer: Unfortunately there is no way to speed up the court process. Your options are as follows:
First, you can talk to your lawyer about strategies to speed up the court process.
Second, if you are able, you could sell your house and use the funds to deal with your debt. If you are faced with a multi-year legal fight, it may be best to sell the house now and get out of debt now, rather than waiting until your credit gets worse.
Please note that this is a very generic answer, since we don’t know the value of your house, or what you owe. It may therefore be wise for you to discuss your situation with an Ontario bankruptcy trustee to determine your possible options.
June 4th, 2008
Question: The 407 has been charging an insane amount of money as “interest” to me…Will that bill be erased on a claim of bankruptcy in Ontario?
Answer: The rules are subject to change, but as it stands now debts owed to 407 ETR are discharged in a bankruptcy in Ontario. However, it is possible that at some point in the future debts to 407 ETR will be added to your license plate or driver’s license renewal cost, in which case you will need to pay them in order to renew your license.
June 3rd, 2008
Questions: I have two questions. The first is:
I have a certain amount that I pay monthly to my trustee and would like to know if my mortgage payment increases (or have other increases), will this affect the amount that I pay to them (decrease it)?
If I get money back from filing my income tax, I understand that my trustee takes that amount and distributes it to whomever, does this money get included into the amount that I am required to pay back and does it decrease my monthly payments?
I hope these questions make sense.
Answers: When you go bankrupt in Ontario, you are required to report your income each month to your trustee. If you have what is called surplus income, you are required to make extra payments while bankrupt. These payments are based entirely on your income, not your expenses, so if your mortgage payments increase, your surplus income payments remain the same.
Also, you are correct, your tax refund is an asset of your bankruptcy estate; it is distributed to your creditors, but it does not reduce your monthly payments, because again your monthly payments are based on your monthly family income.
Your trustee can provide you with more detailed answers based on your specific situation.
May 30th, 2008
Question: After receiiving my letter of discharge, I was told to request a credit report, and then amend the file with a letter including my letter of discharge. What happens if I don’t?
Answer: Once you have completed the duties in your bankruptcy, you will receive a certificate of discharge from your trustee. Your trustee also sends the certificate of discharge to the Office of the Superintendent of Bankruptcy, who in turn forward that information to the credit bureaus. Therefore your credit report will be automatically updated, so it is not necessary for you to send your certificate of discharge to the credit bureau.
We recommend that everyone check their credit report once a year, whether or not you were ever bankrupt. About three months after your discharge you should request a copy of your credit report, and if your discharge is not properly reflected on your credit report than at that time you could send in your certificate of discharge to correct your credit report.
May 28th, 2008
Question: If I owe Canada revenue and I go bankrupt in Ontario will the bankruptcy erase the debt?
Answer: Yes, debts to Canada Revenue Agency (CRA), formerly known as Revenue Canada, are discharged in a bankruptcy in Ontario. More information can be found in this article on Revenue Canada and bankruptcy.
May 27th, 2008
Question: We keep our boat at a marina which rumour has it my file for bankruptcy. Could we or our boat be in any jeopardy? We owe the marina no money.
Answer: If you own the boat, it does not form part of the assets of the marina, so if the marina goes bankrupt you should still be able to retrieve your boat. However, if the marina goes bankrupt and the trustee takes over the operations, there may be a period of time where access to the marina becomes difficult, so to be safe you could consider removing your boat now and storing it somewhere else.
May 24th, 2008
Question: Here is my situation i bought a house a year ago this year i found out my septic needs to be replaced and my water well is under the garage.
I can barely pay the bills now, i cant afford a new septic and well, and i soon won’t be able to live here much longer.
I cant sell the house for even half of what i owe on it.I also have about 35000 in visa and unsecured loans.
1)does the bankruptcy take care of my mortgage
2)should i go bankrupt before or after foreclosure does it make a difference?
Answer: If you know for sure that you cannot afford to continue living in the house, the best answer may be to find a place to rent now, surrender the house to the bank, and then consider a consumer proposal or personal bankruptcy. In either case the shortfall on the mortgage would be included in the proposal or bankruptcy.
If you go bankrupt and continue making payments on the mortgage, and then some months after the bankruptcy starts decide to surrender the house, you would be liable for the shortfall; the shortfall would not be included in the bankruptcy.
As the real estate market gets worse in Ontario, mortgage foreclosures are increasing. This is a complicated area, and it is important that you get good advice before making a decision, so we strongly recommend that you arrange for a no-charge initial consultation with a licensed bankruptcy trustee.
May 23rd, 2008
Question: If my parents are locked in a consumer proposal for four years, can I apply for OSAP funding for university?
Answer: Yes. In most cases even if you yourself were in a consumer proposal or a bankruptcy, you could still apply for OSAP, and subject to your family income in most cases you would be approved.
May 22nd, 2008
Question: Am I obligated to tell my trustee about pay increase as a result of a performance review?
Answer: Yes, you are required to report to your trustee each month your income, regardless of why it increased or decreased. Failure to disclose your income could result in your bankruptcy discharge being opposed, meaning that your bankruptcy period could be extended.