Bankruptcy in Ontario

Question: How long does a consumer proposal or a debt settlement stay on your credit history?

Answer: Usually consumer proposals and debt settlements affect your credit in the same way.  However, you should keep in mind that not all debt settlement plans are the same, so there may be some slight variation between different ones.

For the most part, both a consumer proposal and a debt settlement plan will result in an R7 rating listed on your credit history, which will appear immediately after you file. This rating will remain for an additional 3 years after your program’s completion.

Question: If a person who is a primary borrower from a bank owes money on a car loan but claims personal bankruptcy, do the collections agencies have the right to go after the co-signer or is the loan wiped out under the bankruptcy law? Please respond. Thanks so much!

Answer: If you have a co-signer on a loan, they have agreed to make sure that your loan is paid in full. Therefore, if you claim bankruptcy, collection agencies have the right to go to your co-signer looking for payment. If you want to keep the car, someone must continue to make payments on it. If you don’t make payments, the lender of your loan can go after the co-signer.

Question: If I was to go the root of bankruptcy would my pension be affected?

Answer: No, your pension will not be affected if you decide to declare bankruptcy. However, you will have to give your pension information to your bankruptcy trustee when you file, and it will be factored into your monthly bankruptcy payment.

Question: What could happen if this is my 3rd bankruptcy?

Answer: 3rd bankruptcies are allowed, however you will have to explain each of your past bankruptcies to the Court. Also, the Court could possibly extend your bankruptcy period (and with it your payments to creditors) by 2-3 years or more, although this is unlikely.
 

Question: My wife has investments and she is not on anything I owe. I’m considering bankruptcy, will she lose those investments?

Answer: Filing for bankruptcy does not directly affect your spouse. Your debts are yours alone. The only exception is if your spouse co-signed or guaranteed your debt.

See the article “Does Filing for Bankruptcy in Ontario Affect My Spouse?“

Question: If you declare bankruptcy can anybody check on a public record?

Answer: Yes, bankruptcy is a matter of public record which means that basically anyone can access the information. However, in order to check the registry (available from the Superintendent of Bankruptcy’s office) you must pay a fee. Also, few people know of the existence of the registry. But it is possible for anyone to check whether you have ever had a bankruptcy in your life.