Bankruptcy in Ontario

Why do people claim bankruptcy, and how do they know when they should claim bankruptcy?

My husband and I both filed bankruptcy on the same day. Today, 5 days later we were informed that CRA filed a lien against our property on the very same day we filed (signed the papers). They had already placed a registered lien against my husband for his personal assets but nothing against me or our home which is in both names. We live in Ontario and are aware that Real Estate is not on the allowed list of exemptions, however we still did a property or title search the day before we filed bankruptcy and the CCRA was not listed as a secured lien holder. My question is..where do we stand now with this new lien registered against our property which has no equity. We’ve only had our home for one year.

My company has a pension plan and a Deffered Profit Sharing Plan. The DPSP is registered. Are either one of these effected if you go bankrupt in Ontaqrio?

I’m thinking about going bankrupt because I can’t keep up with my payments, collection agencies are calling all the time and I really need a fresh start.

My question is I just found out my parents took out some bonds in my name when I was young. I’ve already started the process of going bankrupt and I just found out about them. How will those bonds be affected if I go bankrupt? What if I try and use them after I go bankrupt in Ontario?

Thanks

The following question was posted to the Bankruptcy Canada Blog, and has been re-posted here, with an answer, since this is a very common question in Ontario when someone is making the decision to go bankrupt:

Question:
I live in Ontario. If I file for bankruptcy in Ontario and own a vehicle that is worth more than the limit, it is my understanding that I can pay the difference between its value and the limit. I also understand that if I cannot pay the difference I must forfeit the vehicle. Two questions:

1. Am I correct in understanding that the money I would pay would have to come from post-bankruptcy income? i.e. I would have to find someone (relative, friend, etc.) that would loan me the money to pay the difference and then pay them back out of my post-bankruptcy earnings?
2. If I forfeited the vehicle, would I be given back the amount of the limit in order to purchase another vehicle?

Answer:
You are correct. Currently a vehicle in Ontario is exempt if it is worth less than $5,650. If you owned, for example, a vehicle that had an appraised value of $6,650, you could pay into your estate $1,000 and keep your vehicle. (This example assumes that there are no liens against your vehicle; if you owe money against the vehicle, you would have to make pay the lender to keep the vehicle).

If you wanted to pay the $1,000 to keep the vehicle, the money could come from your earnings after you file bankruptcy, or you could borrow the money from friends or family (provided they understood that you were bankrupt).

Here’s where this gets complicated: On June 22, 2006, new legislation was passed in Ontario dealing with the equity in an automobile in a bankruptcy. Prior to June 22, 2006, an automobile was exempt from seizure if its value was less than $5,650. If the value exceeded $5,650, the entire amount was seized.

Under the new legislation, the first $5,650 is exempt from seizure. And, to answer the question, here is a quote from the Ontario Executions Act, paragraph 3(3):

Where exemption is claimed for a motor vehicle that has a sale value in excess of the amount referred to in paragraph 6 of section 2 plus the costs of the sale, the motor vehicle is subject to seizure and sale under a writ of execution and the amount referred to in that paragraph shall be paid to the debtor out of the proceeds of the sale.

Therefore if you surrendered the vehicle and the trustee sold it, you would be entitled to receive the first $5,650 of the proceeds, and you could use that money to purchase another vehicle, because paragraph 4(4) of the Executions Act goes on to say that:

The sum to which a debtor is entitled under subsection 3 (1), (2) or (3) is exempt from attachment or seizure at the instance of a creditor.

Clearly this is a complicated area, so if you own a car and are considering filing for bankruptcy in Ontario, you should contact a trustee and arrange for a no-charge initial consultation before you make any decisions.

Here’s a final thought. If you do own a valuable car, instead of going bankrupt and losing it, another option is to file a consumer proposal so that you can keep your car.

See also bankruptcy Ontario, bankruptcy car, consumer proposal.

I am on Employment Insurance (Parental benefit)until March 2007. I did not declare bankruptcy yet. What are the possibilities of my creditors getting access to my EI payments?

I would like to go bankrupt in Ontario, and am planning to Immigrate to Australia. If I file for bankruptcy NOW, will it affect my immigration application in a few months? (Does the immigration department look into my credit report?) Should I wait to file bankruptcy until AFTER I receive my immigration acceptance? If it takes nine months to discharge me, I will already be in Australia. Does this pose a problem? (Am I required to be in Canada for the discharge?). Once I get to Australia, do I start fresh with a new identity there (meaning they will not see my canadian credit history)?

We have recently been told during a credit check that there are outstanding balances on several credit cards that were listed in the bankruptcy we were discharged from in 2004. Would this be a normal ocurrence, or has the trustee made a mistake?

how do I obtain a copy of my discharge papers from my bankruptcy in ontario?

Unfortunately, I am forced to look at filing for bankruptcy for the second time – the first was in 1996 after I was left with numerous debts after the death of my husband.

I am a widowed senior on Canada Pension and Old Age Security. My car is a 1995 Chev and because I have Rheumatoid Arthritis and am not able to walk that far, I am in fear of losing my car.

Can you give me any advice re above.

Many thanks.