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Wes Cowan: Chartered Insolvency and Restructuring Professional, Trustee in Bankruptcy
In the past 11 years I have met many people who found themselves or their businesses in financial difficulty. Finding solutions to these problems is what I enjoy doing. As a former employee of the Canada Revenue Agency (“Revenue Canada”), I can offer unique insights on tax related debt. Having lived and worked in both rural and urban settings, I understand issues that are particular to each. My family and I call Kitchener home, where I continue to serve our area’s residents as Trustee. If you have concerns about money and need help call me for a FREE CONSULTATION. 519.725.3829
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Question
I had a bankruptsie in 1988 and then in 1995 and today im in trouble again my income has been cut in half and i owe 60,000.00 obviously i can not repay. If i claim bankruptsie for the third time how long before discharge. Or if i do a proposal for say 50 % over a four year period can i keep my one credit card with zero balance. Which is a better option for me I owe 60,000.00 and i will now be clearing only 2900.00 per month
Hi,
Question
I had a bankruptsie in 1988 and then in 1995 and today im in trouble again my income has been cut in half and i owe 60,000.00 obviously i can not repay. If i claim bankruptsie for the third time how long before discharge. Or if i do a proposal for say 50 % over a four year period can i keep my one credit card with zero balance. Which is a better option for me I owe 60,000.00 and i will now be clearing only 2900.00 per month. Also i am not in default yet but beginning now i will have to miss payments so some creditors will not be paid
Good morning,
Thank you for your question. In respect to filing for bankruptcy a third time, your finish which is called a discharge will be determined by the Court. They will take into consideration your current situation as well as the reasons for your prior two bankruptcies when making a decision. Most likely, you will receive a suspended discharge for a period of time but as I indicated, the final decision is up to the Court.
In respect to advising if it is better to file a bankruptcy or proposal, we would need a lot more information about your situation before we could advise you of that. Please don't hesitate to give us a call at 888-PwC-Debt (888-792-3328) to book a free consultation so you can get the information you need.
Hope this helps.
Liz
Merry Christmas everyone. The team at PricewaterhouseCoopers Inc. wishes you a very happy and safe holiday season.
Cheers,
Liz, Wes and the entire team!
I have a credit card that is maxed out... I cannot even affortd to make the monthly payments.... I am behind in my other bills. I also am behind in January rent. I work full time in retail and I am a single mom of three children...I have been struggling for 3 years but seem to be ending up further in debt
Do I need to know exactly what debts I have? I have some older debts, no one is contacting me right now regarding them but I do know that there are court judgements regarding them. I cannot remember the exact amounts. Do all creditors have to be listed specifically n a bankruptcy or does the bankrupcy apply to all allowable debts incurred before the bankruptcy?
On January 2, 2009 7:49 PM Anonymous said...
I have a credit card that is maxed out... I cannot even afford to make the monthly payments.... I am behind in my other bills. I also am behind in January rent. I work full time in retail and I am a single mom of three children...I have been struggling for 3 years but seem to be ending up further in debt
Hi Anonymous,
I'm sorry to hear things are not going well. Being a single parent is enough of a challenge without the burden and stress imposed by debt. It sounds like you need debt relief. Please give us a call to discuss your options - your first meeting is free and there is no obligation on you.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
On January 4, 2009 9:06 PM
Anonymous said...
Do I need to know exactly what debts I have? I have some older debts, no one is contacting me right now regarding them but I do know that there are court judgements regarding them. I cannot remember the exact amounts. Do all creditors have to be listed specifically n a bankruptcy or does the bankrupcy apply to all allowable debts incurred before the bankruptcy?
Hi Anonymous,
A bankruptcy includes all debts of the bankrupt person existing on the date the person files bankruptcy, even if the creditors are not specifically listed on the bankruptcy documents. However, that said, the bankrupt has a duty to ensure that the creditor list is complete, and swears to this under oath when s/he signs the bankruptcy documents. I would recommend obtaining reports from the major credit reporting agencies such as Equifax and Trans Union to better determine which credtors you owe. The exact balances you owe are not required, just a reasonable approximation. The creditors will file claims with the Trustee for the exact amounts once they are notified - but they cannot be notified if they are not listed. It should be noted that there may be a penalty for not listing a creditor. If a Trustee has enough money in a bankruptcy to pay some money back to the creditors, and a creditor does not receive payment because the bankrupt failed to list them, the bankrupt may be liable to pay the creditor the amount they should have received.
Hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
Three years ago, I lent my son $40,000 when he was faced with unexpected closing costs on his new home purchase. A few months ago, I loaned my son $7,000 to cover several mortgage payments and legal fees when he fell behind - he had received a notice from the bank that he would be petitioned into bankruptcy. This was the first I knew he was in financial difficulties. Since then, I have been lending him money for other needs to keep his family of 5 going (he owns an incorporated business that is struggling with a large debt load, too).
My son is considering declaring bankruptcy. He tried to sell his house but was unsuccessful - the only offer he received was less than his indebtedness after real estate fees were considered. Complicating this is that the equity he has in his house is equal to the amount I put into the purchase. I do not want to lose the money I gave them for the house by selling it in this poor market and I also do not think it fair if the equity in his home becomes part of the disbursements in his bankruptcy.
As an unsecured creditor, what proof will I have to provide to the Trustee of these debts? I have cancelled cheques and a few IOUs. Is it possible to place a mortgage on his home 'after the fact'? I would prefer to be a secured creditor and to continue to help him keep the house so he can sell it when there is a better chance of getting a good price.
On January 9, 2009 4:36 PM Anonymous said...
Three years ago, I lent my son $40,000 when he was faced with unexpected closing costs on his new home purchase. A few months ago, I loaned my son $7,000 to cover several mortgage payments and legal fees when he fell behind...
My son is considering declaring bankruptcy... the equity he has in his house is equal to the amount I put into the purchase...
As an unsecured creditor, what proof will I have to provide to the Trustee of these debts? I have cancelled cheques and a few IOUs. Is it possible to place a mortgage on his home 'after the fact'? I would prefer to be a secured creditor...
Hello Anonymous,
I'm sorry to hear of your son's situation and your potential exposure to loss of amounts you loaned to him.
My comments will assume an Ontario experience where there is no exemption on house equity in bankruptcy.
As it stands, based on what you have said, you are an unsecured creditor for upwards of $50,000. If your son files personal bankruptcy, in order to receive any distribution from the bankruptcy, you will be requierd to file a claim with proof that the amount(s)were advanced as a loan. As you have suggested, the proof could take the form of a cancelled cheque, etc. - but the burden of proof rests with you.
I empathize with your feeling that you would rather be a secured creditor (i.e. mortgagee), than unsecured. It's unfortunate that you did not register a mortgage on the property when the funds were advanced. As a related person, if your son were to (sometime after the original loan) grant you a mortgage within 12 months of him filing bankruptcy, the transaction would be deemed (under law) to be a preference over other unsecured creditors, and may be reversed by the Trustee/Court.
I'm sorry that I don't have better news for you as a creditor. If your son does need to file bankruptcy, it's best to frame that decision in consideration of his corporate debt issues, where he may be exposed personally. Perhaps there may be some corporate restructuring options avalable to him in conjunction with his personal bankruptcy.
We would be happy to consult with him on both coporate and personal debt issues - the first meeting is free of charge and there is no obligation to him.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
Will my children lose their possessions if I file bankruptcy? IF I am allowed $11,000 roughly in exemptions does this include my childrens possessions (uneder 18yrs). Also do you get to chose what items you keep or does the trustee tell you what they are taking?
I am currently being sued and I have countered sued and have a third party lawsuit. I am unable to contiue with the legal costs and my lawyer has advised I act on my behalf but the 3rd party may sue me for his legal fees. In the mean time I have incurred many debts - credit card - I am considering bankrupcty for the credit card debt as I do not have enough monthly income to pay the debt and living cost and further legal fees. How does bankruptcy effect possible and current lawsuits. If a judgement were imposed I would not be able to pay.
On January 13, 2009 10:33 AM Anonymous said...
Will my children lose their possessions if I file bankruptcy? IF I am allowed $11,000 roughly in exemptions does this include my childrens possessions (uneder 18yrs). Also do you get to chose what items you keep or does the trustee tell you what they are taking?
Hello Anonymous,
In Ontario, the exemption for household goods and furnishings is $11,300. In addition to this, there is also an exemption for personal effects such as clothing, jewellery etc. of $5,650. These amounts are assumed to mean actual current value, not replacement value. In my experience, unless a person has fine art, coin collections, antique furniture, or the like, it is rare for people to find that their possessions are worth more than these exemptions. If there is a particular item or items of value(like those just mentioned), the Trustee would focus on these. As childrens' belongings tend to be of nominal value, they are not typically included with those of the parent. If the child is in possession of something that is extraordinary and it is clear that the parent 'gave' it to them as a way of sheltering the asset from creditors, then the Trustee would be obliged to view it as the parent's asset, not the childs.
I hope this helps.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
On January 13, 2009 7:40 PM Anonymous said...
I am currently being sued and I have countered sued and have a third party lawsuit. I am unable to contiue with the legal costs and my lawyer has advised I act on my behalf but the 3rd party may sue me for his legal fees. In the mean time I have incurred many debts - credit card - I am considering bankrupcty for the credit card debt as I do not have enough monthly income to pay the debt and living cost and further legal fees. How does bankruptcy effect possible and current lawsuits. If a judgement were imposed I would not be able to pay.
Hi Anonymous,
A bankruptcy halts legal action from commencing or continuing against you, unless the Court allowes the plaintiff to continue with the action. The plaintiff would have to specifically request permission for this from the Court. Permission would only be granted in cases where an award to the plaintiff would survive the bankruptcy. There are some debts that survive bankruptcy, and these are listed specifically in Section 178 of the Bankruptcy and Insolvency Act. They include such things as court fines, and awards for fraud/theft, intentionally inflicted bodily harm, sexual assault, spousal/child support or student loans less than 7 years old.
It might be helpful to speak with your lawyer and/or a Bankruptcy Trustee to determine whether the suits you are facing are likely to survive bankruptcy or not. As mentioned before, our initial consulation is free of charge, and we would be happy to discuss possible options and outcomes.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I am a CDN living in the US. All my debt (credit card, car loan and mortgage) is in Canada and I have been diligently paying it for the 4 1/2 yrs I've been in the US. I am no longer able to keep up and am seriously considering abandoning my payments. I say abandon because I do not have the time nor money to return to file bankruptcy. What does this mean for me if one day I return to Canada. My Internet research leads me to believe that after 6 yrs after the debts are filed for collection, they would be absolved from public records. Is this true? If I return to Canada in say 10 yrs, would it no longer show and I could start over with my credit? Thanks you!
On January 16, 2009 12:52 PM Anonymous said...
I am a CDN living in the US. All my debt (credit card, car loan and mortgage) is in Canada and I have been diligently paying it for the 4 1/2 yrs I've been in the US. I am no longer able to keep up and am seriously considering abandoning my payments. I say abandon because I do not have the time nor money to return to file bankruptcy. What does this mean for me if one day I return to Canada. My Internet research leads me to believe that after 6 yrs after the debts are filed for collection, they would be absolved from public records. Is this true? If I return to Canada in say 10 yrs, would it no longer show and I could start over with my credit? Thank you!
Hi Anonymous,
Sorry for the delay in my response. I'm sorry to hear things aren't going well.
There is some truth to the notion that uncollectible debts eventually drop off the credit bureau(s) records. However, 'when' this happens is somewhat in question. My understanding is that at least 6 years must pass since the last active collection attempt by the creditor. As long as they are still sending letters, calling, trying to sue, etc., the clock doesn't start. If collection attempts last for years, then it would be that much longer before the debts 'drop off'. It should be noted that the timing has as much to do with the particular credit bureau's own internal policies as anything else. The only thing that universally starts that clock is a bankruptcy or proposal filed under the Bankruptcy and Insolvency Act. Should you find yourself back in Canada at some point, you may wish to consider filing at that time.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Hello,
If I have filed for personal bankruptcy, can I still make an Employment Standards Act claim for unpaid wages against my former employer?
Thanks!
I was wondering if I could list a credit card on which I am only an authorized user on my bankruptcy? And if so does that mean the person who is the account holder is no longer responsible for the debt?
January 21, 2009 11:26 AM
Anonymous said...
Hello,
If I have filed for personal bankruptcy, can I still make an Employment Standards Act claim for unpaid wages against my former employer?
Thanks!
Hi Anonymous,
In short, the answer is yes. However, while you are in bankruptcy, any amount you are sucessful in recovering could be seen as either surplus income (a portion of which would have to be paid into the bankruptcy) or as an outright asset (which would have to be paid into the bankruptcy in its entirety). Even though you may not receive any money yourself, I think you have an obligation to pursue the matter for the benefit of your creditors. I would recommend discussing the details with your Trustee who will be able to clarify how any recovery would be handled given your particular circumstances, and who may also be able to assist you with the claim.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
On January 21, 2009 12:35 PM Anonymous said...
I was wondering if I could list a credit card on which I am only an authorized user on my bankruptcy? And if so does that mean the person who is the account holder is no longer responsible for the debt?
Hello Anonymous,
Unfortunately, no such luck. Any charges made to a credit card by an authorized user are still the responsibility of the primary card holder - and continue to be so even if the authorized user files bankruptcy. In my experience, the credit card companies view any authorized user of the card who has signed for a purchase at any time to be liable for the entire balance of the account. Given that, you would have to list the card in your bankruptcy to deal with your liability in the matter - but it would not have any effect on the obligations of the primary card holder.
All the best,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
If the creditors charge you with fraud, either for misrepresentation of income or improper credit card usage, is it a criminal charge? What are the consequenses? Can you be sentenced to prison time? Is the worst case scenario that the debt survives the bankruptcy? Please advise.
On January 23, 2009 1:43 PM
Anonymous said...
If the creditors charge you with fraud, either for misrepresentation of income or improper credit card usage, is it a criminal charge? What are the consequenses? Can you be sentenced to prison time? Is the worst case scenario that the debt survives the bankruptcy? Please advise.
Hello Anonymous,
Creditor initiated fraud actions do not often result in jail time, but can become a criminal charge depending on the severity of the circumstances. More often, the creditor simply wants the court to confirm that it was a fraudulent act on the part of the debtor, so that the creditor can be exempted from a bankruptcy and continue to collect the amount it is owed.
If you are finding yourself in this situation, I would recommend speaking with a lawyer to determine what consequences you may be facing, if any.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I am considering bankruptcy. I am saparated from my wife. We have 2 mutual loans between us. I have assumed one and she the other and this is stipulated in our separation agreement. If I were to claim, will she be held accountable for the loan that I have assumed responibilty for or, does our separation agreement protect her from it?
January 26, 2009 8:40 PM Anonymous said...
I am considering bankruptcy. I am saparated from my wife. We have 2 mutual loans between us. I have assumed one and she the other and this is stipulated in our separation agreement. If I were to claim, will she be held accountable for the loan that I have assumed responibilty for or, does our separation agreement protect her from it?
Hello Anonymous,
Unfortunately, creditors are not bound by the separation agreement, only the parties that agreed to it. As such, on a co-signed loan, where one party files bankruptcy, the creditor will most often pursue the other party for the debt. Presumably, in spite of being separated from your wife, you would not want that to happen. Sorry not to have better news for you. Depending on her financial circumstances, she may wish to consider a consumer proposal or bankruptcy as well.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I was let go just over two months ago. I am still being paid my salary bi-weekly for one year as part of my severance package. If my former employer files for bankruptcy protection, would I still receive my salary?
if a company is court ordered to pay an employee due to breach of contract, can said company get out of the court order by claiming bankruptcy after court order was issued?
February 4, 2009 1:50 PM punci said...
I was let go just over two months ago. I am still being paid my salary bi-weekly for one year as part of my severance package. If my former employer files for bankruptcy protection, would I still receive my salary?
Hello punci,
An interesting question. Severance and Termination amounts are required to be paid by Ontario law to employees who are let go, based on their years of service. Sometimes, rather than receiving a lump sum of money, employees are given the option of receiving their normal salary until the full severance and termination amounts are paid. This works well unless the company is in trouble. In short, if the company files bankruptcy, it is unlikely that you would receive your full entitlement. Claims against a bankrupt company for severance and termination are not a priority claim (whereas back wages and vacation pay are). If you suspect that the company is in trouble and you still have the option of taking a lum sum payout of your severance and termination, it would be wise to consider that option.
Hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
On February 5, 2009 11:46 AM craftcat said...
if a company is court ordered to pay an employee due to breach of contract, can said company get out of the court order by claiming bankruptcy after court order was issued?
Hi craftcat,
I will assume that we are speaking about a corporation and that only the corporation is named in the court order (as opposed to individual directors) In short, the employee would still have a claim against the company for the amount. However, the claim would rank after some Revenue Canada debts, the company's secured lenders (i.e. banks) and any preferred claims such as employee back wages and vacation pay. The reality is that if the company qualifies to file bankruptcy, it doesn't have enough money or assets to pay its creditors, and although the claim stemming from the court order will survive, it is unlikely that there will be enough funds at the end of the day to see it paid.
Sorry to not have better news.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Me and my husband had file for a US Bankruptcy since we are US resident-we have a rental property in Canada and we also have debts in Canada which were included in our US Bankruptcy filing-our question is DO WE HAVE TO FILE A CANADA BANKRUPTCY FOR OUR CANADIAN CREDITORS.My wife is a Canadian citizen and a dual citizen -US & Canadian.Income is only in US except for the Rental property in Canada.
On February 7, 2009 6:33 PM Anonymous said...
Me and my husband had file for a US Bankruptcy since we are US resident-we have a rental property in Canada and we also have debts in Canada which were included in our US Bankruptcy filing-our question is DO WE HAVE TO FILE A CANADA BANKRUPTCY FOR OUR CANADIAN CREDITORS.My wife is a Canadian citizen and a dual citizen -US & Canadian.Income is only in US except for the Rental property in Canada.
Hello Anonymous,
Many US and Canadian creditors do recognize a bankruptcy in the opposite country, although they have no legal requirement to do so (in spite of the wording of both sets of laws, they have no actual force or effect outside the borders of that country, unless a court in the other country grants them force). Given that, there is no guarantee that the Canadian debts will be cleared by the US bankruptcy process. If you have assets in Canada (e.g. rental property), it's possible that your Canadian creditors will seek to collect their debts by obtaining a court judgment against you and seizing the rents and/or the property itself. You may need to consider a bankruptcy in Canada as well if you want to avoid such problems down the road - particularly if you have no equity in the property today but may have in the future.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I have a part time job with very little hours a week, my husband has a full time job. We have 3 kids and we filed for bankruptcy in dec. We were told that we could include our dell accounts, but there is one that we are still paying monthly. We no longer have the computer from the other account as it didn't last very long and now a collection agency is trying to contact us for paymt. They informed us that we are not going to get away with including that particular account in bankrupty because it is secured. What to we do? We don't have the equipment.
February 10, 2009 1:46 PM Anonymous said...
I have a part time job with very little hours a week, my husband has a full time job. We have 3 kids and we filed for bankruptcy in dec. We were told that we could include our dell accounts, but there is one that we are still paying monthly. We no longer have the computer from the other account as it didn't last very long and now a collection agency is trying to contact us for paymt. They informed us that we are not going to get away with including that particular account in bankrupty because it is secured. What to we do? We don't have the equipment.
Hi Anonymous,
Dell's situation as creditor is somewhat unique. In my experience, their contracts indicate that they have a security interest in the equipment they sell/lease, yet they rarely seem to register these liens on the provincial lien registry. A bankruptcy Trustee ranks ahead of any unregistered security interest. However, because a computer is deemed to be part of 'household goods', it is considered to be an 'exempt' asset in which the Trustee has no interest. Dell has taken the position that since the Trustee has no interest in the computer, their security interest is still valid. Even so, Dell would only be entitled to the return of the computer in a bankruptcy, not full payment of the account. Any difference between the fair market value of the asset and the total loan amount (i.e. the shortfall) would be an unsecured claim in the bankruptcy and cannot be collected from the bankrupt. I have generally advised bankrupts to return the computer(s)if they do not wish to continue with the contract(s) - then there will be no further obligation. In your case, unfortunately, you do not have the computer to return. I would suggest that the most you would owe would be the fair value of the computer as of the date of bankruptcy, not the entire balance. In reality, in order to enforce payment, Dell would have to sue you. It is questionable if they would be successful given that the bankruptcy prevents all legal actions. I would recommend discussing this further with your Trustee to see what his/her view and advice would be.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
My husband and I, we lost job 7 months ago. Now he doesn't get EI. I still have EI for one month more. Collection agency called me today and told me that my check is bounced back and they expect me to pay $4000 in 48 hours. What I can do? I don't have friends or family to borrow money what they recommended me and I can't pay that amount. I am in Windsor where is very hard to find job right now. Please tell me what to do?
Sincerely,
Hi there:
My husband and I filed for bankruptcy in 2005. Now employment insurance has said my husband received too much money from them in 2004 and says we have to pay it back. Its almost $4000..can this be filed under our bankruptcy?? Thanks for your time.
what happens to my car if the bank is holding it for collaterol for my loan
Sorry for my tardy respponse - I have been down with a bad cold over the last couple of days. Now I'm back to tackle your questions!
Wes Cowan
On February 18, 2009 3:22 PMAnonymous said...
My husband and I, we lost job 7 months ago. Now he doesn't get EI. I still have EI for one month more. Collection agency called me today and told me that my check is bounced back and they expect me to pay $4000 in 48 hours. What I can do? I don't have friends or family to borrow money what they recommended me and I can't pay that amount. I am in Windsor where is very hard to find job right now. Please tell me what to do?
Sincerely,
Hello Anonymous,
You are certainly not alone in being without work these days. Slowdowns are affecting many different parts of the economy. It sounds like you just don't have the income to keep up with your debt payments any more. Collection agencies often demand the entire balance if you default on making the regular payments - which is ironic because that's the time you are least likely to be able to pay the full balance. Their next step may be to try to sue you to recover their money. Even if they get a judgment in their favour, they can't garnishee wages or seize assets that you simply don't have. I would recommend speaking with a Trustee in Bankruptcy to review your options. A consumer proposal or bankruptcy may be the solution to your current financial problems.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
On February 20, 2009 11:50 AM
Anonymous said...
Hi there:
My husband and I filed for bankruptcy in 2005. Now employment insurance has said my husband received too much money from them in 2004 and says we have to pay it back. Its almost $4000..can this be filed under our bankruptcy?? Thanks for your time.
Hi Anonymous,
Human Resources Development Canada ("HRDC") and Employment Insurance ("EI") are an unusual creditor where it comes to bankruptcy. Often when an EI overpayment has occurred, it's because the person did not correctly or fully report their income to HRDC during the time their were receiving EI benefits. HRDC has taken the position that this in effect a sort of fraud, and therefore they feel that any such amount is not a dischargeable debt in bankruptcy (per Section 178 of the Bankruptcy and Insolvency Act). In my experience, they don't seem to allow for administrative error on their part (which of course happens from time to time), but place all the responsibility on the EI recipient. I would certainly let HRDC know about the bankruptcy and emphasize the fact that the debt originated before the bankruptcy - and see if they are willing to let it go. I wish I had better news for you, but unfortunately, given my experience, I think that your husband will have to pay the amount back in spite of the bankruptcy.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
On February 20, 2009 12:16 PM
Anonymous said...
what happens to my car if the bank is holding it for collaterol for my loan
Hi Anonymous,
I'll assume you mean if you were to file a bankruptcy. Well, it depends on the bank and how well you have done with the loan. Many of my bankrupt clients have been able to keep their cars and continue with the regular payment if the related loans were up-to-date at the time they filed bankruptcy, and they had a good payment history. On the other hand if the opposite is true, then the bank may seize the car and sell it to recover some of the money they are owed. Any shortfall to the bank would become a claim in the bankruptcy that the bankrupt person would not have to pay. I hope this answers your question. If you need more help and would like to look at your situation in more detail, we do offer a free, no obligation, initial consultation.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I am considering going for a Consumer Proposal since i cannot pay my credit card debt -
I want to know if this will have any negative effect on my son's OSAP application?
Please let me know.
I am looking at buying a company that is in bankruptcy. Can I keep the name? and is good will part of the assets purchased?
What should I say to my employer if I failed to disclose my bankruptcy Ch.13 to them as part of an employee disclosure law with Fi..etc..Please advise as what I should say..if I forgot about it,and may have been personal matter I did not mention and they finally found out. What can I tell them if they are asking why I did not disclose my BKCY ?
March 3, 2009 11:55 AM
Tikku10 said...
I am considering going for a Consumer Proposal since i cannot pay my credit card debt -
I want to know if this will have any negative effect on my son's OSAP application?
Please let me know.
Hi Tikku10,
Sorry for the slow response. In short, your proposal should not affect your son's OSAP application. OSAP evaluates a student's eligibility based on the parent(s) income, not whether they are solvent. The proposal may have an impact is if you are going to be a co-signer or guarantor of a loan for your son. Then the lender may not see you as a good risk and may require another co-signer.
Hope this helps.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
March 5, 2009 9:08 AM
Anonymous said...
I am looking at buying a company that is in bankruptcy. Can I keep the name? and is good will part of the assets purchased?
Hello Anonymous,
The most important thing to remember about a bankrupt corporation is that, unlike a bankrupt person, the bankrupt corporation is never discharged of its debts. If you purchase a bankrupt corporation and hope to operate it, you will be required to pay any amounts stillowing to creditors. Regarding goodwill, it is usually based on the recognition of the name, or the customer base, etc. If the company had been bankrupt any length of time, such goodwill may have been effectively lost, and there may be no goodwill value. If you are serious about buying this company, I would recommend getting legal advice to identify all potential pitfalls.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
March 5, 2009 11:54 PM
Anonymous said...
What should I say to my employer if I failed to disclose my bankruptcy Ch.13 to them as part of an employee disclosure law with Fi..etc..Please advise as what I should say..if I forgot about it,and may have been personal matter I did not mention and they finally found out. What can I tell them if they are asking why I did not disclose my BKCY ?
Hi Anonymous,
As a Trustee in Ontario, Canada, I can only comment on local law and experience. Employers ask questions on application forms sometimes to see if applicants are truthful. There are certainly many examples of employees being dismissed because they misrepresented themselves on their application forms. How serious your oversight is viewed is left to be seen. My personal view is that a previous bankruptcy should have little or no bearing on future employability. I've seen many bankruptcies that had more to do with personal misfortune and less to do with ability to manage money. It should not be viewed as an absolute comment on a person's character.
Best of luck with your situation. Hopefully your employer excuses the oversight.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
My husband and I are separated. We own a home together, but have very little if any equity. I left in November, and he has not made any mortgage payments since then. The bank has given notice that they are starting legal proceedings ( I assume that means foreclosure). If we declare bankruptcy ( Im pretty sure our financial situation will make us eligible) is there anyway to get the bank to stop the foreclosure or is that inevitable?
March 6, 2009 2:37 PM
Anonymous said...
My husband and I are separated. We own a home together, but have very little if any equity. I left in November, and he has not made any mortgage payments since then. The bank has given notice that they are starting legal proceedings ( I assume that means foreclosure). If we declare bankruptcy ( Im pretty sure our financial situation will make us eligible) is there anyway to get the bank to stop the foreclosure or is that inevitable?
Hi Anonymous,
The bank has probably indicated a date by which they will not proceed as long as long as the mortgage arrears are paid up to date. Assuming that happens somehow, the bank will not take the house. Generally speaking, bankruptcy alone will not make the bank take the house, and these days the banks are even less likely to want to do so. That said, a questionable payment history may be a deciding factor. Please note that if you decide to file bankruptcy and the house is left to the bank, any shortfall to the bank will be included in the bankruptcy and you will not be liable for it. By contrast, if you file bankruptcy, keep the house and continue to make payments on it, but then lose it later on, the shortfall at that point will not be included in the earlier bankruptcy. The decision to keep the house or not should be evaluated based on your both your personal and financial situation.
Please note that we offer a free initial consultation, should you need assistance in deciding what to do.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
I have an outstanding bankruptcy dating back to 1999 that due to circumstances has still not been discharged, i have attepted contact with the bankruptcy attornies in the past year but still am unable to meet the demands of said attorney I am on pwd support and have been in receipt of income assistance benefits pretty much since 1999. I do not have even enough money to live yet the attornies seem to want more and more reinbursement and obligations that i am unable to meet due to my current and past financial hardship. I am at a wits end and do not know what to do or even if anything can be done. I am in need of help! please if you could point me in the right direction, as i am at a loss.
March 10, 2009 5:46 PM
Anonymous said...
I have an outstanding bankruptcy dating back to 1999 that due to circumstances has still not been discharged, i have attepted contact with the bankruptcy attornies in the past year but still am unable to meet the demands of said attorney I am on pwd support and have been in receipt of income assistance benefits pretty much since 1999. I do not have even enough money to live yet the attornies seem to want more and more reinbursement and obligations that i am unable to meet due to my current and past financial hardship. I am at a wits end and do not know what to do or even if anything can be done. I am in need of help! please if you could point me in the right direction, as i am at a loss.
Hi Anonymous,
I assume by 'attorney' you are referring to your Trustee. In Canada an attorney (i.e. lawyer) is not required to file a bankruptcy. If you file a bankruptcy and are unable to complete the duties required, your Trustee will ultimately obtain a discharge from your file, and your creditors' rights to collect will resume. This is only significant if you have income or things that the creditors could seize if they took legal action. I would recommend discussing your situation further with your Trustee. I have always been interested in helping debtors complete their bankruptcies, and I would expect that your Trustee is the same. There may be the option of having your discharge requirements reviewed by the court and amended if they are too difficult to comply with given yuor current circumstances.
I hope this helps.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I owe money on my car and already the file has been handed over to a bailiff. I owe 16000 and the car is worth approx 11000. I need to register for bankruptcy and I was wondering if I can keep the car since I need it to go to work.
My husband's mother declared bankruptcy last year, and we recently received a demand for payment in connection with one of her bank lines of credit. My husband was named on the account when it was originally opened in 1985 for the purposes of Power of Attorney. He has never used the account, signed any cheques or done any transactions on the account. Is he liable for the demand they are making? Thanks.
March 16, 2009 4:47 PM m-bennell said...
I owe money on my car and already the file has been handed over to a bailiff. I owe 16000 and the car is worth approx 11000. I need to register for bankruptcy and I was wondering if I can keep the car since I need it to go to work.
Hi m-bennell,
The creditor you owe for the car probably has a lien on it - which makes them a secured creditor. A secured creditor has the right to take the vehicle for non-payment - even in the event of bankruptcy. It's common for people who file bankruptcy to be able to keep their vehicles and continue the payments - however, this is at the discretion of the secured creditor. A questionable payment history may be grounds for the secured creditor to take the vehicle on bankruptcy rather than let the debtor keep it. It should be noted that there are lessors who will lease vehicles to people who are in bankruptcy. While the rates aren't always favourable, it is an avenue to get a needed vehicle in the event a secured creditor takes your present one.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
March 17, 2009 1:10 PM
Anonymous said...
My husband's mother declared bankruptcy last year, and we recently received a demand for payment in connection with one of her bank lines of credit. My husband was named on the account when it was originally opened in 1985 for the purposes of Power of Attorney. He has never used the account, signed any cheques or done any transactions on the account. Is he liable for the demand they are making? Thanks.
Hi Anonymous,
You should definitely request proof that your husband is responsible for the debt. The bank must be able to provide documents that show his signature on an agreement to either be a co-signer or guarantor in order to have grounds to collect it from him.
Best of luck,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
sorry if i keep posting on here, i posted twice from my phone and not sure whether it registered or not so got to a computer to post now:
my question is regarding tax refunds...I plan on filing bankruptcy this year (2009) and I know the trustee will file two tax returns one from january 1st 2009 until the day I file for bankruptcy and then another for the day i file until December 31st 2009 is this correct? I just filed my return for last year (2008) and received my income tax refund check in the mail...as I have not filed for bankruptcy yet I want to know if I am entitled to keep and spend this money prior to filing as I am solely earning income only from Ontario Works until at least september of this year as I just had a baby and have no job to go to so my plan was to use part of the refund towards the cost of the trustees services (i went through the government assistance program to obtain a trustee as I couldn't even come close to obtaining the money needed for bankruptcy otherwise and as ontario works only gives you minimal money this refund is my only means of paying for the trustee..then i wish to spend the rest on everyday expenses such as baby needs etc..) so basically my question is..because this refund check is for a year outside of the year I am filing bankruptcy in am i entitled to keep it (can I go cash the check and use the moneys prior to claiming bankruptcy?) thank you for your help!
a few month ago I gift transfered ownership of my motorcycle to my dad because I owe him lots.
I have a car worth $800.00 and the value of motorcycle is S6,500.00. If I claim bankruptcy will any of the creditors come after the motorcycle?
Thanks
RK
March 19, 2009 12:08 PM Anonymous asked about a 2008 Tax Refund.
Hi Anonymous,
Yes, you are correct about your Trustee having to file two tax returns for 2009, assuming you file bankruptcy this year. And yes, the bankruptcy will receive any refund from either of these 2009 returns. Regarding your 2008 tax refund: If you were to file bankruptcy right now, your Trustee would have to consider the entire refund to be an asset of your bankruptcy. It is considered 'cash on hand', outside of your normal income. That said, given your finanicial circumstances, if you need some of the money for basic living expenses, no one will begrudge you that. Your Trustee will be obliged to report how you spent the refund on your bankrupty papers - but as long as it was reasonable, your creditors are unlikely to complain.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
March 19, 2009 3:16 PM
Anonymous said...
a few month ago I gift transfered ownership of my motorcycle to my dad because I owe him lots.
I have a car worth $800.00 and the value of motorcycle is S6,500.00. If I claim bankruptcy will any of the creditors come after the motorcycle?
Thanks
RK
Hi RK,
One of the questions you have to answer under oath when you file bankruptcy is whether you have transferred any assets in the last 12 months. You would be obliged to declare truthfully that you have signed over the motorcycle to your father. The Trustee's responsibility then will be to determine if an unfair preference has occurred. Your father was paid back in part for the money you owe him through the transfer of the motorcycle, but what about your other creditors? If it is shown that your father received 'payment' because he is a relative, then the Trustee may have to demand that he surrender the motorcycle to the Trustee so that it can be liquidated for the benefit of all creditors.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Pursuant to an Employee Disclosure Requirement chapter of the Compliance Manual in our company, I failed to disclose my Bankruptcy with my employer. I responded to their inquiry and so had iformed them and disclosed my bankruptcy to them but because I failed to report it promptly, I am in violation of the employer's policy and had not responded within three business days of my filing of bankruptcy, how can I? it was personal and it just happened unfortunately and just wanted to keep it to myself, it was too soon to let the whole world know about it, anyways they told me that I am cautioned for the failure and must read the chapters of the company's compliance manual. It says there that I must acknowledge your receipt, understanding, and intent to comply with these policies and was advised that this may result in a disciplinary action, up to and including termination of employment. Please advise how to respond back with their compliance warning to me..stating to acknowledge, understand, etc...should i say that I have acknow...read the chapter of the compliance manual, understood, and intent to comply with the company's policies. Please advise asap. Thank you.
Can I sue my employer for invading my privacy of my bankruptcy?..or not..well since it's a security firm?...and they have cc'd my Sr. Manager...who talks a lot and possibly would have spread the word of mouth about me...I feel there's no discreet policy, i felt invaded and humiliated with my employer's policy of no indiscretion..this was too personal for me. Please advise if I can sue them?..in CA.. thanks.
March 20, 2009 8:47 PM
Anonymous said...
Pursuant to an Employee Disclosure Requirement chapter of the Compliance Manual in our company, I failed to disclose my Bankruptcy with my employer. I responded to their inquiry and so had iformed them and disclosed my bankruptcy to them but because I failed to report it promptly, I am in violation of the employer's policy and had not responded within three business days of my filing of bankruptcy, how can I? it was personal and it just happened unfortunately and just wanted to keep it to myself, it was too soon to let the whole world know about it, anyways they told me that I am cautioned for the failure and must read the chapters of the company's compliance manual. It says there that I must acknowledge your receipt, understanding, and intent to comply with these policies and was advised that this may result in a disciplinary action, up to and including termination of employment. Please advise how to respond back with their compliance warning to me..stating to acknowledge, understand, etc...should i say that I have acknow...read the chapter of the compliance manual, understood, and intent to comply with the company's policies. Please advise asap. Thank you.
Hi Anonymous,
This is more of a labour issue than a bankruptcy issue. It's surprising that your company has actually written into their employee manual that you are required to disclose a bankruptcy. However, employers are allowed to set certain standards, and depending on your line of work they may have grounds for such a requirement. I would recommend speaking with an HR representative of your company or if necessary, a labour lawyer if you feel your right to privacy is being violated or you are being unfairly treated.
Best of luck,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhuoseCoopers Inc.
1-888-PWC-DEBT
March 20, 2009 8:50 PM
Anonymous said...
Can I sue my employer for invading my privacy of my bankruptcy?..or not..well since it's a security firm?...and they have cc'd my Sr. Manager...who talks a lot and possibly would have spread the word of mouth about me...I feel there's no discreet policy, i felt invaded and humiliated with my employer's policy of no indiscretion..this was too personal for me. Please advise if I can sue them?..in CA.. thanks.
Hi Anonymous,
I assume you also left the previous blog. Again, a labour lawyer would be your best bet. I'm not sure if by security firm you mean selling securities (stocks & bonds) or security as in alarms etc. In the case of a securities company, I know there are professional responsibilities around reporting a bankruptcy by a securities trader, etc.
Hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
My husband never fulfiled his obligations under his bankruptcy as far as payments are concerned. He filed over 8 years ago. Is he still bankrupt?
Hi there. I need help!!! Right now I am a mother of 2 with a 3rd on the way and we are $33,000 in debt. $19,000 is OSAP, 10 thousand is Citi-finacial, becasue of a string of bad luck and having to keep up with my household bills, and $9,000 is for our van that I need to get my income, daycare and Avon. My husband and I are now in this big circle of just barely getting by and not able to make even minimum payments on the debts. Is bankrupcy the answer?
So questions: 1)Can i claim bankrupcy on my OSAP after 5 years?
2.)Can I keep my vehicle after claiming bankrupcy, I need it for my income and have kept up on all payments.
3.) Is it possible just for myself to claim bankrupcy and not my husband since all debt is in my name and most was before we met.
We do not qualify for anything, not low income housing, not financial help, nothing but we can barely make ends meet and collection agencies are now persuing legal action if we do not make payments, we are so stressed and have been trying to deal with this by ourselves for several years and are getting deeper and deeper. Please Help!
I filled for bankruptcy on February 6, 2009. It was a personal bankruptcy but my sole proprietor business was also included. I had an account with Reliance home comfort, which the bill was given to my trustee. Now Reliance filled a proof of claim for approximately $400 because this is what my arrears were at the time. Today I received a letter saying "final bill", same account number, still for the same address in question under the same business name, but they said that their legal department has advised them that because this is a contract that I've broken and the removal of the equipment happened after my insolvency date, that I am still required to pay this and they can come after me for it.
I was told that this is not true and that unless it was a new account under a new account number, that they could not do this. I want to make sure that I don't have to pay over $3,000 to these people. I declared bankruptcy due to failure of business and not able to keep up with personal finances as well. And if I couldn't pay them $400, I'm sure not gonna be able to pay $3,000!!!
March 24, 2009 1:37 PM
pennyless said...
My husband never fulfiled his obligations under his bankruptcy as far as payments are concerned. He filed over 8 years ago. Is he still bankrupt?
Hi pennyless,
Sorry for the tardy response. In short, yes, if your husband did not complete the duties required in his bankruptcy, then he is technically still bankrupt. The Trustee probably closed his file, which means that all of your husbands creditors could come after him again. In addition, if he needs to get his discharge at some point in the future, his Trustee will be required to look at the last 8 years of income and any new assets acquired to see if there any additional contribution to the bankruptcy is required.
Hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
March 26, 2009 3:37 PM
Anonymous said...
...So questions: 1)Can i claim bankrupcy on my OSAP after 5 years?
2.)Can I keep my vehicle after claiming bankrupcy, I need it for my income and have kept up on all payments.
3.) Is it possible just for myself to claim bankrupcy and not my husband since all debt is in my name and most was before we met.
We do not qualify for anything, not low income housing, not financial help, nothing but we can barely make ends meet and collection agencies are now persuing legal action if we do not make payments, we are so stressed and have been trying to deal with this by ourselves for several years and are getting deeper and deeper. Please Help!
Hi Anonymous,
I'll answer your questions in the same order you posed them:
1) As of July 2008, bankruptcy law changed with respect to student loans. As it stands now, you can clear a student loan debt without conditions if it is more than 7 years old. There is also new 'hardship' provision which allows for the debt to be cleared if it is between 5 and 7 years old and the debtor can demonstrate to the court elements of hardship. As it is so new, it is not clear at this point exactly what conditions will qualify.
2)Most vehicle loans are 'secured' - the creditor puts a lien on the vehicle until you pay for it. Most secured creditors will let you keep the vehicle after bankruptcy - assuming your payment history was good before the bankruptcy. Ultimately it is their choice. You may want to discuss it with them before filing bankruptcy to see what they would do in your particular case.
3) Yes, in Canada spouses are considered to be separate individuals with respect to debt. So you can file bankruptcy independently of your husband. Please note that any joint debt you have (where both of you signed for it) will fall back to your husband to pay.
Hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
March 30, 2009 5:06 PM
info said...
I filled for bankruptcy on February 6, 2009. It was a personal bankruptcy but my sole proprietor business was also included. I had an account with Reliance home comfort, which the bill was given to my trustee. Now Reliance filled a proof of claim for approximately $400 because this is what my arrears were at the time. Today I received a letter saying "final bill", same account number, still for the same address in question under the same business name, but they said that their legal department has advised them that because this is a contract that I've broken and the removal of the equipment happened after my insolvency date, that I am still required to pay this and they can come after me for it.
I was told that this is not true and that unless it was a new account under a new account number, that they could not do this. I want to make sure that I don't have to pay over $3,000 to these people. I declared bankruptcy due to failure of business and not able to keep up with personal finances as well. And if I couldn't pay them $400, I'm sure not gonna be able to pay $3,000!!!
Hi info,
This is a great question. Creditors seem to think that just because some portion of a contract becomes payable after a bankruptcy, that amount is not included in the bankruptcy. Section 69.3(1) of the Bankruptcy and Insolvency Act ("BIA") indicates that no creditor can pursue a bankrupt person for any 'claim provable' in the bankruptcy. The BIA then goes on to define under Section 121(1)that a 'claim provable' is any debt, present or future, that relates to an obligation that existed prior to the bankruptcy. Therefore, if you contracted for the service prior to bankruptcy, any debt related to that contract is a debt in the bankruptcy and is not collectible from you.
I hope this puts your mind at ease.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I have a question about the Tools of the Trade for someone filing for bankrupty in Ontario. For a person who is a sole proprietorship publishing children books, would about 1600 printed books be considered tools of the trade or inventory. Would these have to be listed on the bankrupty forms. If so would it be listed as cost, or retail value?
Would these have to go to auction?
Would other equipment such as computers, printers would be considered tools and the person would be able to keep? When listing personal expenses can you just make up numbers or do you have to have supporting documantation for the last year.
April 4, 2009 8:50 AM Anonymous said...
I have a question about the Tools of the Trade for someone filing for bankrupty in Ontario. For a person who is a sole proprietorship publishing children books, would about 1600 printed books be considered tools of the trade or inventory. Would these have to be listed on the bankrupty forms. If so would it be listed as cost, or retail value?
Would these have to go to auction?
Would other equipment such as computers, printers would be considered tools and the person would be able to keep? When listing personal expenses can you just make up numbers or do you have to have supporting documantation for the last year.
Hi Anonymous,
Some excellent questions. In my experience, the books would be considered inventory, not tools of trade. As such, they would not be exempt and would be listed as a realizable asset at their expected 'realizable value'. This amount would be determined by the Trustee, but would take into account selling costs - so they would be unlikely to be listed at full retail pricing. Nevertheless, the Trustee has an obligation to get the most he or she can for them - so all options would be considered: e.g. auction, sale to another vendor directly, consignment sale, or sale back to you. The other things you need to run your business like a computer, peripherals etc. would be considered tools of trade and would be exempt, assuming their value is below the exemption threshold. Regarding personal expenses, you can estimate - but the amounts should be reasonable. There are some kinds of expenses that you may be required to support with documentation. Your Trustee can detail these for you.
Hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
In November my common-law spouse was laid-off. It doesn't look promising that he will be returning to work so he is going back to school under the Second Careers program. We are basically treading water right now and it will not be long until we begin to fall behind. I am not working.
We have random impulsive high interest debt. Dell accounts, Leons accounts, some credit card debt, a Boxflex credit account.
We currently own a house, and hold a mortgage with my husbands parents.
My question is, if we want to be able to obtain another mortgage in 5 to 10 years time, on our own, assuming that my husband is working full-time, is something like a Consumer Proposal beneficial to us? Do we get to choose what debt is included or does it have to be everything? I know that we end up with an R7 rating, how long will that last.
One last question, a stupid one, but I just want to make sure, if my husband and I are co-signers on almost anything, could one of us file for bankruptcy and not have it affect the other? Hypothetically, could I file for bankruptcy, then my husband be able to get a mortgage solely under his name?
Thank you so much for your time, this is a great service that you provide.
April 7, 2009 9:32 PM Kgledhill said...
In November my common-law spouse was laid-off. It doesn't look promising that he will be returning to work so he is going back to school under the Second Careers program. We are basically treading water right now and it will not be long until we begin to fall behind. I am not working.
We have random impulsive high interest debt. Dell accounts, Leons accounts, some credit card debt, a Boxflex credit account.
We currently own a house, and hold a mortgage with my husbands parents.
My question is, if we want to be able to obtain another mortgage in 5 to 10 years time, on our own, assuming that my husband is working full-time, is something like a Consumer Proposal beneficial to us? Do we get to choose what debt is included or does it have to be everything? I know that we end up with an R7 rating, how long will that last.
One last question, a stupid one, but I just want to make sure, if my husband and I are co-signers on almost anything, could one of us file for bankruptcy and not have it affect the other? Hypothetically, could I file for bankruptcy, then my husband be able to get a mortgage solely under his name?
Thank you so much for your time, this is a great service that you provide.
Hi Kgledhill,
Unfortunately, either a bankruptcy or a Consumer Proposal will impact your ability to qualify for a mortgage in the future. A Consumer Proposal leaves you with a 7 (out of 9 - 9 being the lowest) on your credit rating for 3 years from the time you finish the proposal. A proposal can be for as long as 5 years. A bankruptcy leaves you with a 9 for at least 6 years from the time you complete the bankruptcy. A first-time bankruptcy usually lasts no more than one year.
In either a proposal or bankruptcy, you cannot pick and choose which creditors to put in or leave out. All creditors are included. Secured creditors (mortgages, car loans) are typically unaffected by these processess and are free to continue with the existing payment terms.
If one co-signer files a bankruptcy or a proposal, the other co-signer is still liable for the full balance. Therefore, many spouses find they both have to file in order to extinguish their debts. If it is possible for only one spouse to file, and the other to rertain or rebuild their credit rating, that would be preferable. Whether your husband would qualify for a mortgage on his own will depend on how healthy his credit rating is at the time of application, how large a mortgage he is applying for, and what his income level is.
I hope this helps. Best of luck. Don't forget that we offer a free initial one-on-one consultation to help you better assess your options.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Will going bankrupt affect my chances of getting a decent job?
April 12, 2009 10:21 AM,
Anonymous said...
Will going bankrupt affect my chances of getting a decent job?
Hi Anonymous,
In my experience, having filed a bankruptcy does not generally affect your employment opportunties. There are some jobs that you would not be able to hold while "in" bankruptcy (that is, the bankruptcy has not been completed and you have not been discharged), but these are relatively rare.
Hope this is reassuring,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I am currently in the middle of a consumer proposal (I have until December, started in September 2008). I am a self-employed, sole proprietor. Yesterday, I found out that my main source of income (I was an independent contractor, and tailored my business around this work) was being terminated. I have no viable source of income now. Is it possible to turn the current consumer proposal into a bankruptcy? I had thought about bankruptcy prior to the C/P, but my contract specifically stated that I would lose the contract if I went bankrupt. Since I no longer have the contract, and my credit is already destroyed, this would allow me to wipe out some accounting discrepancies (parts account) that are outstanding with this company, and start out fresh. Is it possible, and are amounts owed on "parts accounts" (with this company) wiped out in a bankruptcy? Thanks!
I had the same question as the Annonymous poster above me..
M.Gordon
April 24, 2009 3:28 PM
Anonymous said...
I am currently in the middle of a consumer proposal (I have until December, started in September 2008). I am a self-employed, sole proprietor. Yesterday, I found out that my main source of income (I was an independent contractor, and tailored my business around this work) was being terminated. I have no viable source of income now. Is it possible to turn the current consumer proposal into a bankruptcy? I had thought about bankruptcy prior to the C/P, but my contract specifically stated that I would lose the contract if I went bankrupt. Since I no longer have the contract, and my credit is already destroyed, this would allow me to wipe out some accounting discrepancies (parts account) that are outstanding with this company, and start out fresh. Is it possible, and are amounts owed on "parts accounts" (with this company) wiped out in a bankruptcy? Thanks!
Hi Anonymous,
Sorry for the delayed response. PwC is an accounting firm after all, and we have been in the rush of tax season of late!
In short, yes, what you are suggesting is possible and happens fairly often. Rather than commence a bankruptcy from the proposal however, what usually happens is that the proposal fails (the person cannot complete the payments due to a downturn in income) and the proposal process is terminated. The person then files a bankruptcy. The bankruptcy will include any remaining proposal debt plus any new debt that has accrued since the proposal was filed. I would recommend that you speak with your proposal Trustee about this. As an aside, you do not have to file the bankruptcy with the same Trustee who was the administrator of your proposal, but it is often easier, as the proposal Trustee already has most of your information and debt details.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
My wife and I filed banktruptcy in 2007 and were allowed to keep our home..I was discharged 2009 and my wife will be shortly. We want to remortgage our home but the trustee stated that any equity in the home belongs to them even tho i am discharged, that they are not released from this for another year ..Why is that ? according to our mortgage holder we dont even have a legal renewal in place ..
Thx WD
What is a bankruptcy trustee? Do you have to be a lawyer to become a bankruptcy trustee? I think I might like to be a trustee.
May 1, 2009 10:53 AM
Anonymous said...
My wife and I filed banktruptcy in 2007 and were allowed to keep our home..I was discharged 2009 and my wife will be shortly. We want to remortgage our home but the trustee stated that any equity in the home belongs to them even tho i am discharged, that they are not released from this for another year ..Why is that ? according to our mortgage holder we dont even have a legal renewal in place ..
Thx WD
Hi WD,
Generally speaking, if there is any equity in your property at the time of bankruptcy, your Trustee will indicate what amount you must pay to the bankrupt estate in order to keep your home (sometimes by remortgaging). If you are unable or unwilling to pay the equity, the Trustee must proceed to sell the property. If you agree to pay the equity, most often you will not be discharged until the equity payments are complete. The circumstances you describe are unusual. If being discharged is a condition of being able to remortgage, then that may be the reason your discharge was permitted. I would recommend you speak to your Trustee further about this. Your obligation to pay equity should not by a mystery or a surprise. While you technically lose legal capacity to deal with your assets while in bankruptcy (i.e. sell real property, mortgage, etc), your Trustee can release its interest in the asset thus allowing you to deal with it again.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
May 2, 2009 1:52 PM
Anonymous said...
What is a bankruptcy trustee? Do you have to be a lawyer to become a bankruptcy trustee? I think I might like to be a trustee.
Hi Anonymous,
Trustees in Bankruptcy (the official title) are licenced by the Federal Government. There are about 1,000 Trustees in Canada, and we are involved in insolvency challenges ranging from personal bankruptcy to Air Canada type restructurings. Trustees are sometimes described as 'lawyer-accountants', and our members are drawn from both professions, although primarily from accounting. Most Trustees are Chartered Accountants, although this is not a requirement to be a Trustee. Having an accounting background is pretty much a necessity. Almost all Trustees belong to the Canadian Association of Insolvency and Restructuring Professionals (CAIRP - see www.cairp.ca) which in conjunction with the Office of the Superintendent of Bankruptcy (Industry Canada), has developed a Trustee course called the National Insolvency Qualification Program (NIQP). It generally takes about 3 or so years to complete and there are practical work requirements. You would need to work for a Trustee during this time and that Trustee would be your course sponsor. Feel free to review the requirements at the CAIRP site noted above.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Breifly my spouse and I filed banktruptcy in 2007.One month later my wifes job was terminated.We could not finish paying payments to the trustee. In dec 2008 we attempted to refinance our mortgage to pay off the trustee etc, got as far as the signing date then due to no discharge it was halted by the trustee.. The mortgage company agrred to refinance in my name only so i paid my balance to the trustee, received a discharge, no conditions stated.The mortgage company requested weeks ago a release from my spouse off the mortgage. Meanwhile we had a new furnace put in in dec 2008, 4 thousand cost. due in june 2009 and we borrowed money from my son for repairs to the home, about 6 thousand.. There was no equity in the home at the time of filing banktruptcy, but there may be now due to improvements. The trustee claims if there is equity in the home now it belongs to them.All were trying to do is pay off this 10 thousand we owe and the mortgage company has agreed to increase the mortgage but need a release from the trustee who will not without written instructions from the lawyer, this meaning if we increase our loan they assume theres equity now.. The mortgage company has stated we dont have a legal renewal in place since dec 2008.. What are my options and can the trustee still claim equity ? The trustee states they are not discharged from me for a year,,
Thanks W&B
May 8, 2009 8:29 AM
Anonymous said...
Breifly my spouse and I filed banktruptcy in 2007.One month later my wifes job was terminated.We could not finish paying payments to the trustee. In dec 2008 we attempted to refinance our mortgage to pay off the trustee etc, got as far as the signing date then due to no discharge it was halted by the trustee.. The mortgage company agrred to refinance in my name only so i paid my balance to the trustee, received a discharge, no conditions stated.The mortgage company requested weeks ago a release from my spouse off the mortgage. Meanwhile we had a new furnace put in in dec 2008, 4 thousand cost. due in june 2009 and we borrowed money from my son for repairs to the home, about 6 thousand.. There was no equity in the home at the time of filing banktruptcy, but there may be now due to improvements. The trustee claims if there is equity in the home now it belongs to them.All were trying to do is pay off this 10 thousand we owe and the mortgage company has agreed to increase the mortgage but need a release from the trustee who will not without written instructions from the lawyer, this meaning if we increase our loan they assume theres equity now.. The mortgage company has stated we dont have a legal renewal in place since dec 2008.. What are my options and can the trustee still claim equity ? The trustee states they are not discharged from me for a year,,
Thanks W&B
Hello Anonymous,
Not knowing all the details of your file, I am unable to comment specifically on your situation. I can make some general observations. Trustee's generally 'fix' the amount of home equity payable to the bankruptcy estate at the date of bankruptcy. This doesn't generally change unless there is shown to be missing information in the original calculation, or the bankruptcy has lasted for years due to the failure of the bankrupt to complete his/her duties and the property value has increased due to market conditions. It is true that the Trustee may continue to have an interest in property of the bankrupt in spite of the bankrupt being discharged. In the current economy, in spite of improvements to the property, the property value may not have increased significantly. I would expect that your Trustee would take this into acccount and the fact that some of the improvements were funded by your son. I would encourage you to discuss the situation in detail with your Trustee to see if you can reach some agreement on what needs to be done.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
my husband filed for bankrupcy in 2007 but in 2008 ,he attended the cout hearin n it said he will be discharged after six consecutive months of the payments made to his trustee,.It has been already six months we paid but still we are unable to get the letter of discharge.In this condition can he sponsor me[HIS SPOUSE] for PR? PLEASE HELP US.
Hi there...I first want to say just how helpful I find this site. All of my questions have been answered and very helpful.
My question is, I declared bankruptcy in February 09, which was just a few months ago. I'm still in my bankruptcy cause it's 9 months for me before going for my discharge. I was able to keep my vehicle, but since then have had a really hard time making my payments. It's like things went from bad to worse. I want to bring the car back, cause I think they'll probably be coming to take it soon anyway, but I want to make sure that because this is an old account that this will still remain under my bankruptcy. I'm already 2 months behind and can't seem to get caught up. I'm not working and unable to find a job as quickly as I'd like and I'm also not eligible for EI because it was my own business that shut down. I'm stuck and don't know what else to do. I dno't want to loose my car but at this point I just don't have a choice. I just want to make sure that it won't affect me down the road if I return it.
Thanks
May 21, 2009 1:00 PM Anonymous said...
my husband filed for bankrupcy in 2007 but in 2008 ,he attended the cout hearin n it said he will be discharged after six consecutive months of the payments made to his trustee,.It has been already six months we paid but still we are unable to get the letter of discharge.In this condition can he sponsor me[HIS SPOUSE] for PR? PLEASE HELP US.
Hi Anonymous,
Your husband's file will likely have to go back to the court for his discharge to be signed and therefore made official. It sounds like the 6 months just ended, so assuming all remaining duties are completed, his Trustee will need to prepare the documents and send them to the court. Depending on how busy the court is, it may take anywhere from a few weeks to a few months to get the signed discharge back. It is my understanding that a person in bankruptcy is not eligible to sponsor someone to come to Canada. Unfortunately, he will have to wait until he receives his discharge certificate before he applies to sponsor you.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
May 21, 2009 4:39 PMStressedtothemax said...
Hi there...I first want to say just how helpful I find this site. All of my questions have been answered and very helpful.
My question is, I declared bankruptcy in February 09, which was just a few months ago. I'm still in my bankruptcy cause it's 9 months for me before going for my discharge. I was able to keep my vehicle, but since then have had a really hard time making my payments. It's like things went from bad to worse. I want to bring the car back, cause I think they'll probably be coming to take it soon anyway, but I want to make sure that because this is an old account that this will still remain under my bankruptcy. I'm already 2 months behind and can't seem to get caught up. I'm not working and unable to find a job as quickly as I'd like and I'm also not eligible for EI because it was my own business that shut down. I'm stuck and don't know what else to do. I dno't want to loose my car but at this point I just don't have a choice. I just want to make sure that it won't affect me down the road if I return it.
Thanks
Hi Stressedtothemax,
Sorry to hear things haven't improved much since your bankruptcy. I like to go over the car question with my clients at the time of their bankruptcies. It's always a question of whether to give it up or try to keep going. There is a potential problem with going forward and then having to surrendering the car later. Some case law suggests that making payments on a secured debt (i.e. car loan) after bankruptcy has the effect of 'reaffirming' the debt - like signing a new contract after bankruptcy. This means that if the car loan company seizes the car for non-payment (or on voluntary surrender)and sells it for a shortfall, they may take to postion that you are liable for their loss - regardless of the bankruptcy. If you haven't made many payments after the bankruptcy, you may be able to return the vehicle and the secured creditor will allow the shortfall to be included in the bankruptcy. However, in theory, even one payment after the bankruptcy could make you liable for any shortfall.
Hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I am applying for maternity benefits and am wondering if I still qualify for them as I owe tons of money to OSAP. I am currently overdue in my payments for OSAP and just want to know if I can count on maternity benefits.
I filed bankruptcy in 2006 and had included a vehicle that my ex had in her possession, was driving and making the payments for. The creditor did not repo the vehicle because all payments were up to date. Last summer, she stopped making the payments and surrendered the vehicle. Now there is a shortfall of 9000 that the creditor is trying to collect. They are contacting me to make the payments. My trustee has been contacted and sent all necessary information to the creditor, however now the creditor has sent the account to collections and they are contacting me again for the outstanding amount. Shouldn't I not be responsible as it was included in my bankruptcy and the creditor should have repossessed the car then??
I spoke with a bankruptcy trustee and was told that what I pay for the 9 months is calculated on a sliding scale. So if I make $3000.00 a month and there are 2 adults, I must pay approx $400.00 a month to the trustee. Is this correct? I have had 2 friends who reported they did not pay anything. As a single parent I am not sure how I could afford the bankruptcy fee.
Ami said...
I am applying for maternity benefits and am wondering if I still qualify for them as I owe tons of money to OSAP. I am currently overdue in my payments for OSAP and just want to know if I can count on maternity benefits.
May 28, 2009 11:31 AM
Hi Ami,
Sorry for the tardy reply - just returning from vacation. In my experience, EI Maternity benefits should not be affected by your outstanding student loan debts - even though both are government related. Hope this helps.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
May 28, 2009 10:11 PM
Anonymous said...
I filed bankruptcy in 2006 and had included a vehicle that my ex had in her possession, was driving and making the payments for. The creditor did not repo the vehicle because all payments were up to date. Last summer, she stopped making the payments and surrendered the vehicle. Now there is a shortfall of 9000 that the creditor is trying to collect. They are contacting me to make the payments. My trustee has been contacted and sent all necessary information to the creditor, however now the creditor has sent the account to collections and they are contacting me again for the outstanding amount. Shouldn't I not be responsible as it was included in my bankruptcy and the creditor should have repossessed the car then??
Hi Anonymous,
There is case law that suggestes that the making of payments on a secured loan after bankruptcy can effectively 'reaffirm' the contract, therefore making it collectible in spite of the bankruptcy. However, the key factor here is that you did not personally make any of the payments. The company assumed you wnated to keep the vehicle since payments kept coming after the bankruptcy. However, if you can show that 1)she made all the payments, 2)the vehicle was titled only in her name, and 3) that you were no longer residing together, then you should have a pretty good argument for not being liable for the shortfall. The bankruptcy does affect any contract or future obligation arising from a contract. It is a secured creditor's option as to whether to seize a vehicle or continue to take the payments. Assuming they knew about your bankruptcy, they made the latter choice in spite of it. They should bear some of the reponsibility for that choice.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Wes Cowan, Trustee said...
June 5, 2009 8:26 AM
Barbara said...
I spoke with a bankruptcy trustee and was told that what I pay for the 9 months is calculated on a sliding scale. So if I make $3000.00 a month and there are 2 adults, I must pay approx $400.00 a month to the trustee. Is this correct? I have had 2 friends who reported they did not pay anything. As a single parent I am not sure how I could afford the bankruptcy fee.
Hi Barbara,
Bankruptcy law in Canada includes the concept of 'surplus income', which is defined as any income over a monthly figure determined by the government to be a basic standard of living. So for example, the 2009 figure for a family of 2 is $2,328. If as a family of 2, your monthly net (take-home) income is $3,000, then your surplus income would be $672. However, you are only required to pay 50% of this amount to the bankruptcy - which is $336. So it sounds like what you were told is correct. There are a few allowable expenses like child care that can reduce your net income, and therefore your surplus payable.
Although a portion of the amount you pay will be used to offset your Trustee's fees, the intention of the payment is to give something back to your creditors. Every Trustee in Canada must follow the law with respect to surplus. Feel free to read Directive 11R yourself at http://strategis.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br01055.html
One other point - there is pending new law that will change the length of time someone who has surplus income has to pay it - from 9 months to a minimum of 21 months. The intent, it seems, is to require bankrupts to repay more of their debts.
Hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
My mum is seriously considering bankruptcy because my disabled “father” put us in debt for over $60, 000 (his debt, but she’s stuck with it) and she can’t afford any payments on anything, or food or other necessities, because her job only pays enough to cover the interest of two of the many, many bills a month (meaning she pays nothing off the payments and they’ll never, ever, ever go down).
The thing is she’s worried that if she goes for it she’ll lose my education plan (the only “asset” she has—even if the plan is in my “father’s” name). Is this something that should be talked over with a trustee about? I read somewhere that a trustee could work around someone losing their child’s plan, but it wasn’t a guarantee.
Is there any chance (albeit slim) that it could be spared, or is it highly doubtful? Or can you just give the, “Talk to your trustee about that one...” bit?
( ( And if necessary: We don't own a house, the vehicle we have is barely worth a couple hundred dollars (and it falls under the "tools of the trade" up to $11, 300)--we don't have anything but the Education Savings Plan. ) )
Hi, I am 28 2 kids i live on ontario works, my debt has been crawling more and more over the last 10 yrs, due a bad relationship. Now on my own with my kids, i want to clear my name of all debt. i want to start fresh and i want to finish school.
1-i am on ontario works
2-i own absolutely nothing
3-i have no savings
4-i owe alot to the credit ppl!!
Is there still hope for me???
June 11, 2009 1:50 AM Anonymous said...
My mum is seriously considering bankruptcy because my disabled “father” put us in debt for over $60, 000 (his debt, but she’s stuck with it) and she can’t afford any payments on anything, or food or other necessities, because her job only pays enough to cover the interest of two of the many, many bills a month (meaning she pays nothing off the payments and they’ll never, ever, ever go down).
The thing is she’s worried that if she goes for it she’ll lose my education plan (the only “asset” she has—even if the plan is in my “father’s” name). Is this something that should be talked over with a trustee about? I read somewhere that a trustee could work around someone losing their child’s plan, but it wasn’t a guarantee.
Is there any chance (albeit slim) that it could be spared, or is it highly doubtful? Or can you just give the, “Talk to your trustee about that one...” bit?
( ( And if necessary: We don't own a house, the vehicle we have is barely worth a couple hundred dollars (and it falls under the "tools of the trade" up to $11, 300)--we don't have anything but the Education Savings Plan. ) )
Hi Anonymous,
Sorry for the tardy response. RESPs unfortunately, are not exempt assets in a bankruptcy, because although they are intended for the child(ren), they are registered in the name of the parent. If the parent files bankruptcy, the 'realizable' value of the plan (what you would get if you cashed it out)must come into the bankruptcy somehow - either by the Trustee cashing out the plan or the bankrupt person paying the realizable value of the plan into the bankruptcy (over time if necessary). In the second instance, the plan is preserved for the child(ren). If the plan really is only in your father's name, then your mother filing bankruptcy will have no effect on it.
As an aside, unless your mother co-signed your father's debts, she is not responsible for them. From what you said it sounds like you assume that your mother owes just because she is his wife - which is not automatically the case.
I hope this helps.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
June 17, 2009 11:03 PM Anonymous said...
Hi, I am 28 2 kids i live on ontario works, my debt has been crawling more and more over the last 10 yrs, due a bad relationship. Now on my own with my kids, i want to clear my name of all debt. i want to start fresh and i want to finish school.
1-i am on ontario works
2-i own absolutely nothing
3-i have no savings
4-i owe alot to the credit ppl!!
Is there still hope for me???
Hi Anonymous,
Yes, there is definitely hope for you! The bankruptcy law in Canada is intended to help the honest but unfortunate person who finds him/herself in overwhelming debt. Where a person is at an income level that would make it difficult for them to pay the Trustee fees, there is a program offered through the Superintendent of Bankruptcy Office (Industry Canada). Please see http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/home for contact details.
Hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Ok so here is my situation, I have about 8000 in debts that are in collections. These debts are from 2002-2003. they are debts regarding rent that was unpaid and bills relative to the rent debt (gas Bill, Phone bill etc.). I Just finished paying money owed to revenue Canada (15 000$). I want to pay these debts because they are affecting my credit report and the bank told me that they would always stay on my report because they are in collections. Do you think that they would accept a lesser ammounts than what I actually owe them?
I recently lost my job after 6 years and not only is this stressful on its own ; I owe $4000 on a matercard and about $1200 on a Visa and my checking account has gone into using the overdraft for rent. and i owe revenu canada about $400 for 2008 taxes . I have yet to recieve UI benefits and not expected to start until end of july which because of a severance package is being clawed back. my first UI check will only be about $120 which means i will have to continue to use overdraft on my account if i have any left. Please advise .
June 23, 2009 4:38 PM Anonymous said...
Ok so here is my situation, I have about 8000 in debts that are in collections. These debts are from 2002-2003. they are debts regarding rent that was unpaid and bills relative to the rent debt (gas Bill, Phone bill etc.). I Just finished paying money owed to revenue Canada (15 000$). I want to pay these debts because they are affecting my credit report and the bank told me that they would always stay on my report because they are in collections. Do you think that they would accept a lesser ammounts than what I actually owe them?
Hi Anonymous,
It's always worth a try to negotiate with your creditors for a reduced amount (Revenue Canada "CRA" notwithstanding - they always want it all!). However, if you reach a settlement deal with your creditor(s), please ensure you get it in writing - to ensure they won't decide later to come after you for the rest of the debt. Also, please note that the credit rating system runs from 1 (good) to 9(unpaid/bankruptcy). A settlement is a 7 on your report. That record could stay on your credit report for up to 6 years after you complete the settlement payment(s). This is why sometimes I advise clients to consider filing a Consumer Proposal - the effect on your credit rating is the same but you also get legal protection from your creditors so they cannot back out of the deal and try to sue you. With the amount of debt you are looking at, it is certainly worth a try to see if you can just settle it informally first.
Hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
June 27, 2009 11:32 AM
Joe form cambridge said...
I recently lost my job after 6 years and not only is this stressful on its own ; I owe $4000 on a matercard and about $1200 on a Visa and my checking account has gone into using the overdraft for rent. and i owe revenu canada about $400 for 2008 taxes . I have yet to recieve UI benefits and not expected to start until end of july which because of a severance package is being clawed back. my first UI check will only be about $120 which means i will have to continue to use overdraft on my account if i have any left. Please advise .
Hi Joe,
Sorry to hear about the job loss -unfortunately all too common these days. Based on what you have said, it sounds like you owe about $7,000 total debt. A debt that seems totally manageable when you have decent income can seem overwhelming when your income drops. If you miss payments, your creditors will of course be contacting you, and ultimately may want to take legal action against you. Employment insurance cannot be garnisheed, so you need not worry about that. If you are back working in a relatively short period of time, you can then make arrangements with your creditors to get the amounts paid back. In the mean time, try to avoid using credit to live, if possible. If you are unemployed for a longer period of time, please feel free to contact us - we would be happy to look at your options in detail. The first appointment is free of charge and there is no further obligation on you.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhuoseCoopers Inc.
1-888-PWC-DEBT
I filed for bankruptcy in 2009 January. It is only in this month of June my husband has surplus income of 1000, however, when we pay our bills, hydro, water, cable, groceries, there is no "surplus" income left. Am I responsible to pay the trustee the fees for myself and for my husbands bankruptcy even though the 1000 has been spent on bills. Isn't the trustee supposed to help us through this difficult time? There is only one or maybe two months we have excess income because my husband works seasonal and the rest of the time he's on EI?
July 7, 2009 1:32 PM
Anonymous said,
I filed for bankruptcy in 2009 January. It is only in this month of June my husband has surplus income of 1000, however, when we pay our bills, hydro, water, cable, groceries, there is no "surplus" income left. Am I responsible to pay the trustee the fees for myself and for my husbands bankruptcy even though the 1000 has been spent on bills. Isn't the trustee supposed to help us through this difficult time? There is only one or maybe two months we have excess income because my husband works seasonal and the rest of the time he's on EI?
Hi Anonymous,
Although surplus income is calculated monthly, Canadian Bankruptcy Law does permit the Trustee to average the income/surplus during the bankruptcy to balance low months against higher months. The result may be a lower surplus payment or possibly no surplus at all. This is considered a fairer approach where a person's income is irregular. Please refer to Directive 11R, Paragraph 11 regarding surplus income at: http://strategis.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br01055.html for more information - and discuss with your Trustee to see if your situation qualifies for a different approach.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Hi Elizabeth,
This question is more in regards to my elderly father. Long story short, his expenses are approximately $500 more a month than he is receiving in pensions etc. This defecit I have been covering for him and can no longer continue to do this. He is terrified to loose his home but will not be able to keep it even if he declares bankruptcy (he has a 1st & 2nd mortgage on it and the combined payments are just too high to maintain). I would like to know if he does declare bankruptcy, would I be able to purchase the home and rent it back to him? The mortgages total about $150K but the home is only worth around $100K.
July 19, 2009 11:28 PM, Anonymous said...
Hi Elizabeth,
This question is more in regards to my elderly father. Long story short, his expenses are approximately $500 more a month than he is receiving in pensions etc. This defecit I have been covering for him and can no longer continue to do this. He is terrified to loose his home but will not be able to keep it even if he declares bankruptcy (he has a 1st & 2nd mortgage on it and the combined payments are just too high to maintain). I would like to know if he does declare bankruptcy, would I be able to purchase the home and rent it back to him? The mortgages total about $150K but the home is only worth around $100K.
Hi Anonymous,
From what you have described, there is no equity in the property. Therefore the Trustee will have no interest in it. Since in a bankruptcy the Trustee would legally step into your father's shoes, s/he may have to be involved in signing off on a sale. This is not usually a problem, although the Trustee may be obliged to charge a fee for the time spent. My concern in this situation is that the mortgages are significantly higher than the value of the home. Often in these cases the bankrupt person walks away from the property and the mortgage company sells it - any shortfall is claimed in the bankruptcy. If your father wants to stay in the house but sell it to you, you may need to pay the full balance of the mortgages as a purchase price - the mortgage companies are unlikely to allow the sale to be completed otherwise - particularly to a related party.
Hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Hi, I have $40,000.00 in credit card and line of credit debt,i cannot make any payments because i am self employed and out of job.I have car payments which i am making, what are my options.
J.
July 28, 2009 2:20 PM Anonymous said...
Hi, I have $40,000.00 in credit card and line of credit debt,i cannot make any payments because i am self employed and out of job.I have car payments which i am making, what are my options.
J.
Hello J.
What to do will depend on whether you think your employment situation is temporary, or likely to be longer term. Also, besides the car on which you are making payments, you didn't mention whether or not you have any other assets. Generally speaking, debts are usually handled by either 1) Making full payment but negotiating more time to do so with the creditors 2) informally settling the debt with yur creditors for less than the full amount, 3) making a formal settlement offer (consumer or commercial proposal under bankruptcy law), or 4) filing bankruptcy. Which option is the best depends on a number of factors. I would recommend that you give us a call so that we can help you determine which option is best for you. The first appointment is free of charge and there is no obligation going forward.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I declared bankruptcy in 2001. I used Price Waterhouse as my trustee. I was discharged in August 2002. I went online today to get my credit profile. 12 accounts showed up....7 were closed and 5 showed up as open. What does that mean and why is the bankruptcy showing up 7 years later? thanks
If I decide claim bankruptcy will I loose all of my daughters RESP and only the last year of my RRSP?
Shannon said...
I declared bankruptcy in 2001. I used Price Waterhouse as my trustee. I was discharged in August 2002. I went online today to get my credit profile. 12 accounts showed up....7 were closed and 5 showed up as open. What does that mean and why is the bankruptcy showing up 7 years later? thanks
Hi Shannon,
Sorry for the tardy reply. Creditors that are included in a bankruptcy typically drop off your credit report about 6 years after you were discharged from the bankruptcy (assuming it was a first-time bankruptcy; they can stay on for much longer if it was a second or subsequent bankruptcy). There are a couple of factors that can influence whether they do drop off or not. The first is whether the credit bureau(s) (i.e. Equifax, Transunion) have a confirmed record of your discharge. In this respect, I always recommend that people send a copy of their discharge certificate to each of the credit bureaus. Trustees generally do not do this - it is up to the bankrupt person. That gives a point for the clock to start rolling. Also, it is possible that for some reason a creditor was missed. If all the 'open' accounts date from before your bankruptcy, you should send them a copy of your notice of bankruptcy and a copy of your discharge certificate so they can update their records. It wouldn't hurt to send the notice of bankruptcy to the credit bureaus as well to confirm that those creditors were included in the bankruptcy.
I hope this helps.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
August 18, 2009 5:53 Anonymous said...
If I decide claim bankruptcy will I loose all of my daughters RESP and only the last year of my RRSP?
Hi Anonymous,
As the law currently stands, RRSPs are exempt assets in bankruptcy except for any contributions within the 12 months preceding the bankruptcy. Unfortunately, RESPs are not exepmpt assets (although in my personal opinion, they should be, as the intent is to hold money in trust for the children). In either case, the bankrupt person is usually given the choice of either allowing the investment to be collapsed, or to pay the amount that would be received from the investment into the bankruptcy (over time, if necessary) in order to keep it. In the case of the RESP, what you actually get out of it if it is collapsed is considerably less than it's full untouched value (the government grant money goes back, etc). So it may turn out that you can keep the RESP but still satisfy the bankruptcy estate for the value that it would have otherwise received.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
I am considering filing for bankruptcy and was just wondering what debts will be wiped out and how this works. I've read your website, which is extremely informative, yet I was just curious as to which of my debts would be gone? I have numerous unsecured debts with various high interest credit card companies. I owe money to suppliers (will/can they take the stock that I haven't sold as payment?). I just can't seem to make the payments. Can you help me out? I also have part ownership in a cottage that is also secured against a loan, will that be affected? Will they take it if I'm only part owner & it is secured by the bank?
thank you so much!
I have been bankrupt before and was discarged in 2004 and was wondering if I could file bankrupsy again, I co signed a car and now have to a=pay for it
August 19, 2009 9:10 AM Anonymous said...
I am considering filing for bankruptcy and was just wondering what debts will be wiped out and how this works. I've read your website, which is extremely informative, yet I was just curious as to which of my debts would be gone? I have numerous unsecured debts with various high interest credit card companies. I owe money to suppliers (will/can they take the stock that I haven't sold as payment?). I just can't seem to make the payments. Can you help me out? I also have part ownership in a cottage that is also secured against a loan, will that be affected? Will they take it if I'm only part owner & it is secured by the bank?
thank you so much!
Hello Anonymous,
Sorry for the slow response - I am just back from vacation.
With a few exceptions, bankruptcy provides relief from all unsecured debts (credit cards, income tax debts, etc). A secured creditor who holds a lien on an asset (e.g. a vehicle, house), will have the right to take the asset in compensation for the debt (assuming payments are not being made). If a shortfall results, the shortfall will be an unsecured debt in the bankruptcy. Secured creditors have the option of continuing to accept payments and leaving the asset intact - and in this regard are unaffected by the bankruptcy. This is common with mortgages and car payments. Suppliers of goods for business generally do not have the right to repossess those goods except under very specific circumstances (e.g. the goods are identifiable as that particular suppliers and have not been co-mingled with other goods).
Businesses always present unique challenges when a bankruptcy occurs, and I would encourage you to meet with us to discuss your options in greater detail.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
August 26, 2009 12:27 PM Karen said...
I have been bankrupt before and was discarged in 2004 and was wondering if I could file bankrupsy again, I co signed a car and now have to a=pay for it
Hi Karen,
Yes, it is possible to file for bankruptcy more than once. It is likely that you will be required to stay in bankruptcy longer on the second occasion however, and may have to pay more money into the second bankruptcy.
We would be happy to discuss the process with you and the impact of changes to bankruptcy law that are pending.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
NOTE: THERE ARE SIGNIFICANT CHANGES OCCURRING IN CANADIAN BANKRUPTCY LAW ON SEPTEMBER 18, 2009. FOR MORE INFORMATION, SEE:
http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br01782.html
Feel free to post questions regarding the changes to this blog.
I have not filed taxes in many years(more than 10).Do I have to file taxes before speaking to a Trustee?
I filed bankrupcy in March 2008, have yet to pay back my surplus income. My question to you is if I end up getting married will my bankrupcy effect my spouse? And what would happen if we were to purchase a house together? Or is it better if he purchases the house in his name only? Thanks
Concerned in London
August 31, 2009 4:18 PM bobo said...
I have not filed taxes in many years(more than 10).Do I have to file taxes before speaking to a Trustee?
Hello bobo,
In short, no, you don't have to have them filed to see a Trustee. However, you should try to have at least the last two years filed (or at least prepared) if possible. If you choose to file bankruptcy (assuming that's an appropriate choice), any debt from the tax years before the bankruptcy is included even if the returns are assessed after the bankruptcy. Although technically you are always held responsible to file the outstanding returns, CRA (Revenue Canada) rarely insists on this after a bankruptcy since any resulting debts will be largely uncollectible.
I hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
August 31, 2009 5:25 PM Anonymous said...
I filed bankrupcy in March 2008, have yet to pay back my surplus income. My question to you is if I end up getting married will my bankrupcy effect my spouse? And what would happen if we were to purchase a house together? Or is it better if he purchases the house in his name only? Thanks
Concerned in London
Hello Concerned,
It is always best to complete your bankruptcy duties (e.g. finish paying surplus income or fees, submit income information, complete counselling, etc.) and get your discharge from the bankruptcy before considering acquiring new assets. Technically, as long as you remain undischarged, a new asset could be taken by the Trustee to help pay your creditors. The bankruptcy will not directly impact your new spouse, but could indirectly affect him if his income results in you paying more surplus (if the calculation is still ongoing) or you find the Trustee has an interest in an asset you have purchased jointly.
In my experience, the surplus amount required to be paid in a bankruptcy usually amounts to only a fraction of the total debt the person started with, and is therefore a very reasonable price for a 'fresh start'. Perhaps your fiance would consider loaning you the money to pay your surplus obligation so that 'fresh start' could be part of your new life together
All the best,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
My ex-husband and I were divoiced in January 2008. He transferred our jointly-owned house to me for free at that time. Recently he told me that he's considering bankruptcy. My question is will that affected my house? Or will the house still considered to be his asset?
September 18, 2009 2:50 PM
Anonymous said...
My ex-husband and I were divoiced in January 2008. He transferred our jointly-owned house to me for free at that time. Recently he told me that he's considering bankruptcy. My question is will that affected my house? Or will the house still considered to be his asset?
Hi Anonymous,
The answer to this question is somewhat complicated. Generally, when a person files bankruptcy, any significant asset they 'gave away' in the preceding 5 years is open to review and scrutiny by the Trustee - particularly if the person was in financial trouble at the time of the transfer. Divorce and equalization of assets in a divorce situation is different however if assets were transferred to the other spouse by order of the court - in such cases the transfer is considered to be legitimate and is not called into question in a bankruptcy.
You may wish to consult an insolvency professional (lawyer or Trustee) with your particular circumstances to see if there is likely to be any impact of your ex filing bankruptcy or not.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Could you tell me if I can claim personal bankruptcy without it affecting my husband. The debt I have was accumulated before our marriage. I am on a disability pension and owe about fifty thousand in credit card and line of credit debt. Thank you.
I would like to do a consumer proposal instead of bankruptcy. I live in an old townhouse and have never missed my mortgage payments. Will I be able to keep my house, I also have a small amount in RRSP's. Can I keep that as well? I live alone with $50,000 in debt (credit cards and a small loan) and earn $38,000 yearly. Please advise. Thanks.
How Can i find info on Ontario Bankrupty Assistance Program
website or phone number
September 29, 2009 8:20 AM Anonymous said...
Could you tell me if I can claim personal bankruptcy without it affecting my husband. The debt I have was accumulated before our marriage. I am on a disability pension and owe about fifty thousand in credit card and line of credit debt. Thank you.
Hi Anonymous,
Generally speaking, one spouse filing bankruptcy does not directly affect the other unless the non-bankrupt spouse co-signed or guaranteed any of the bankrupt spouses debts. Then, of course, those kinds of debts fall back to the non-bankrupt spouse to pay. The non-bankrupt spouse may be inderectly affected by the bankruptcy since they are required to disclose their income during the bankruptcy (the Trustee is required to monitor total family income)and the amount the bankrupt spouse is required to pay into the bankruptcy may be higher if the spouse's income is high.
I hope this helps answer your question. For a complete answer given your personal circumstances, please feel free to contact us - the initial face-to-face consultation is free of charge and there is no obligation on your part.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
September 29, 2009 2:19 PM
Anonymous said...
I would like to do a consumer proposal instead of bankruptcy. I live in an old townhouse and have never missed my mortgage payments. Will I be able to keep my house, I also have a small amount in RRSP's. Can I keep that as well? I live alone with $50,000 in debt (credit cards and a small loan) and earn $38,000 yearly. Please advise. Thanks.
Hi Anonymous,
In a consumer proposal, you keep all of your assets and do with them what you wish. Your mortgage would be unaffected by the proposal. That said, when determining what to offer your creditors in a proposal, we must look at what assets you would have to give up in bankruptcy that would benefit the creditors. In other words, a proposal must be better than bankruptcy. Bankruptcy law now allows a person to keep any kind of RSP except contributions made in the 12 months before a bankruptcy. As far as real estate goes, if you would receive any money if you sold your townhouse, then at least that amount would be required to come into a bankruptcy. The creditors would expect an equivalent amount to be paid into the proposal.
At PwC, we do a written comparison of what your creditors would receive in each scenario to ensure that the proposal is the better choice for both you and the creditors.
I hope this helps.
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
September 30, 2009 2:44 PMAnonymous said...
How Can i find info on Ontario Bankrupty Assistance Program
website or phone number
Please see:
http://strategis.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br01003.html
for a list of the offices of the Superintendent of Bankruptcy. Please contact the one neares to you for details and to obtain forms.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
What if a person goes through bankruptcy and dies shortly after filing?
Hello. My dilemma is this. I am currently in bankruptcy having filed an assignment on the 14th day of May, 2009. On May 21, 2009, my father died suddenly (dissected aorta). My question to you is probably a common one, that being, is there a way of handling this matter so that I can protect the monies to be distributed to me under the will? My understanding is that any monies I receive while in bankruptcy will have to be turned over to my bankruptcy trustee -- is this indeed the case and, if so, is there a way of circumventing this legally? If not, can I simply decline to accept my inheritance and instead have it redirected to a sibling or am I required to refrain from taking any steps to divert the inheritance from being paid to me at this time? Assuming you advise that I have to accept and report it, if I don't, what are the consequences, i.e. can I be criminally charged? Finally, if I don't disclose, how can the trustee discover that I received an inheritance without my disclosing? Your input and/or direction would be greatly appreciated. Thank you so much for your anticipated assistance in this matter. Very best regards.
October 2, 2009 6:38 AM Valerie said...
What if a person goes through bankruptcy and dies shortly after filing?
Hi Valerie,
Unfortunately, I have actually had this experience with a bankrupt person. He died a few months into the process. Basically, any assets that end up in his deceased estate become property of the bankruptcy, and therefore divisible amongst his creditors. The most notable exception is a life insurance policy that is payable directly to a designated beneficiary of a special class (e.g. spouse, parent, child). These payouts flow directly to the beneficiary and do not become part of the deceased's estate - and therefore do not become an asset of the bankruptcy.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
October 2, 2009 2:01 PM
Anonymous said...
Hello. My dilemma is this. I am currently in bankruptcy having filed an assignment on the 14th day of May, 2009. On May 21, 2009, my father died suddenly (dissected aorta). My question to you is probably a common one, that being, is there a way of handling this matter so that I can protect the monies to be distributed to me under the will? My understanding is that any monies I receive while in bankruptcy will have to be turned over to my bankruptcy trustee -- is this indeed the case and, if so, is there a way of circumventing this legally? If not, can I simply decline to accept my inheritance and instead have it redirected to a sibling or am I required to refrain from taking any steps to divert the inheritance from being paid to me at this time? Assuming you advise that I have to accept and report it, if I don't, what are the consequences, i.e. can I be criminally charged? Finally, if I don't disclose, how can the trustee discover that I received an inheritance without my disclosing? Your input and/or direction would be greatly appreciated. Thank you so much for your anticipated assistance in this matter. Very best regards.
Hello Anonymous,
I think you have already anticipated my response, but here it is. If you had received the inheritance before you filed bankruptcy, you probably would have welcomed it as a way of paying your creditors - right? So why try to avoid paying them now?
You have a legal obligation to inform your Trustee of the inheritance. Your Trustee will put the Executor/Executrix on notice that your share must be paid to the bankruptcy. The Trustee will monitor the probate proceedings for years if necessary - so it is pointless to try to delay the payout. Furthermore, yes, you are correct that it is an offence under the Bankruptcy and Insolvency Act (Section 198)to hide an asset from the Trustee/creditors. The Act allows for both monetary penalties and jail time if convicted. It is considered a kind of fraud and is a criminal offence. As to whether your Trustee will find out - there could be tax slips generated by the estate transactions, or s/he may require you to provide bank statements as part of the ordinary course of reporting - and the deposit(s) would be discovered. Assuming the Executor/Executrix knows of your bankruptcy, s/he has an obligation to send your share to the Trustee. Your disclosure of your actual date of bankruptcy in this blog may be of interest to my Trustee readers - who may search the names of all bankrupts on that date to try to identify you...
In short, it is neither ethical nor worth the risk to hide the inheritance. If you are fortunate enough to receive a sum greater than your debts, you will receive the difference.
I hope this helps you sort out your thoughts.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
Does my Credit Union have the right to expose my debt to my employer through a 'wage assignment" even though I signed a wage assignment paper agreeing that they garnish my wages I do not see any thing that says I would permit them to disclose the debt owing?
I claimed bankruptcy in September '09
In June '09 I have a NEL assessment for my back injury substained through work.(non-Economic Loss) I just received a payout from them...
Will I lose all of this money to bankruptcy? Is this money classed as income?
I claimed Bankruptcy in 2000. I just recieved a phone call from a collection agency claiming that I owed a company money from over 10 years ago. Can they still collect on this bill if it's real?
October 20, 2009 10:04 AM gisele said...
Does my Credit Union have the right to expose my debt to my employer through a 'wage assignment" even though I signed a wage assignment paper agreeing that they garnish my wages I do not see any thing that says I would permit them to disclose the debt owing?
Hi Gisele,
It may be in part of the wider disclosure rights you granted to the credit union when you signed for the loan in the first place. Nevertheless, their disclosure to your employer of the total amount you owe is intended to be practical, not to embarass you. Your employer is expected to keep track of how much they have remitted from your wages and when they reach the total, they should stop remitting - that's why the credit union provides that info.
Hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
October 20, 2009 9:14 PM
Anonymous said...
I claimed bankruptcy in September '09
In June '09 I have a NEL assessment for my back injury substained through work.(non-Economic Loss) I just received a payout from them...
Will I lose all of this money to bankruptcy? Is this money classed as income?
Hi Anonymous,
Most money you receive while in bankruptcy will be considered to be either an asset or income. If it is deemed to be an asset, then the entire sum must be paid into the bankruptcy. If it is deemed to be income, then only a portion of it will be required to be paid into the bankruptcy. There are some special circumstances where a person receives an award for 'pain and suffering' or the like. Such awards are often considered to be exempt. In any case, you have a duty to report your receipt of the funds to your Trustee and s/he will determine what, if any, amounts are required to be paid to your creditors.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
October 24, 2009 3:22 PM
Anonymous said...
I claimed Bankruptcy in 2000. I just recieved a phone call from a collection agency claiming that I owed a company money from over 10 years ago. Can they still collect on this bill if it's real?
Hi Anonymous,
In short, as long as the debt existed prior to your bankruptcy and you were fully discharged from that bankruptcy, then the creditor no longer has the right to collect the debt from you. You should provided the collector with a copy of your bankruptcy notice listing the creditor and a copy of your discharge certificate - that should close the matter. If by some chance the creditor was left off the original list, you may have an obligation to pay to the creditor what they would have received in the bankruptcy if they had been notified and had filed a claim. Usually, however, such amounts are relatively small compared to the original debt.
Hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
my husband owns a small business and has the office in our home. work is not coming in and i am afraid we could lose the house. the house is in both our names and the business is in his only. would there be a risk of losing it since the business address is the same as the residential?
October 27, 2009 5:07 AM Anonymous said...
my husband owns a small business and has the office in our home. work is not coming in and i am afraid we could lose the house. the house is in both our names and the business is in his only. would there be a risk of losing it since the business address is the same as the residential?
Hello Anonymous,
If your husband's business relies on his customers knowing where he is located, then there may be some disruption if you are forced to move. Otherwise, however, there is unlikely to be any issue - your husband' business will move with him. He may be required to get new permits etc. depending on how far he moves, and ensure that the kind of business activities he conducts are permited in his new location, etc. Even in a personal bankruptcy scenario, a person's business can often continue after the bankruptcy.
Feel free to contact us if you would like to discuss your options further. Our initial consultation is free of charge and there is no obligation on your part.
Warmest regards,
Wes Cowan, MA CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
If a debtor has been living with a partner for 15 months, and this partner takes a parenting role for the debtors children, does this make them commonlaw? When claiming household expense, is the partners income included in this case?
I am an executor in an estate. The deceased passed away almost 4 years ago. Since then I have been trying to clear up his taxes. He worked for many years overseas, in the drilling business. He has worked in Chile and Mexico. He had not filed nor paid taxes since 1992. I found most of his paperwork, and hired a tax consultant who prepared all the returns, and last May I sent off
all the returns, plus a cheque for taxes due in the amount of $151,000. The consultant maintained that I could disburse what remained of the estate to the beneficiaries. I kept a small amount of funds in the estate account to continue to pay taxes on estate property, and released the rest. I also retained one parcel of land, worth approximately $80,000, in the event I would need it to sell and pay any penalties and interest CRA demanded. We then waited to hear what the interest and penalties would be. In August of this year, CRA wrote demanding an additional $30,000 in interest and penalties. At that time, the accountant wrote and requested forgiveness on the same. In October of this year, CRA sent an invoice for $157,000 more, showing an increase of almost all the returns filed. I am currently paying the property taxes out of my own pocket, as there are no funds left in the estate account. Even selling the remaining property will not generate this outstanding amount. If I were to claim bankruptcy, would this erase the remaining debt to CRA? Would CRA be able to attempt to recover funds from the other beneficiaries? I have lost 3 years of my life working on this estate, as well as erroneously putting my faith in what I believed to be a knowledgeable accountant. I have paid CRA over $151, 000, and simply do not nor will I ever have the ability to pay back $157,000 more.
November 4, 2009 11:55 AM Anonymous said...
If a debtor has been living with a partner for 15 months, and this partner takes a parenting role for the debtors children, does this make them commonlaw? When claiming household expense, is the partners income included in this case?
Hello Anonymous,
Generally speaking, we look to the Income Tax Act [subsection 248(1)]for the definition of 'commonlaw' The simplest definition is where two persons have been living together as a couple for a period of at least one year. So, yes, in your example, living together for 15 months would result in the couple being viewed as commonlaw. For that reason, a Bankruptcy Trustee would certainly view such a couple as a family unit, and require the non-bankrupt person to report their income and expenses as well during the bankrupt person's bankruptcy.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
November 5, 2009 8:50 PM nesdamycart said...
I am an executor in an estate. The deceased passed away almost 4 years ago...The consultant maintained that I could disburse what remained of the estate to the beneficiaries... In October of this year, CRA sent an invoice for $157,000 more, showing an increase of almost all the returns filed... If I were to claim bankruptcy, would this erase the remaining debt to CRA? Would CRA be able to attempt to recover funds from the other beneficiaries?
Hello nesdamycart,
Unfortunately, you did receive erroneous advice. Whenever there is a tax liability, the administrator of the deaceased's estate must always apply for a clearance certificate from Canada Revenue Agency confirming that all tax owing has been paid [Income Tax Act - subsection 159(2)]. The administrator should not disburse any funds until a clearance certificate is received - for precisely this reason - CRA may deem there to be substantially more owed. Given how far back the returns were outstanding, it's not hard to understand how the actual amount assessed, after penalties and interest were applied, could easily be double the calculated taxes for the years involved.
CRA does have the right to assess and pursue both you AND the recipients of the funds for the money distributed. So while a personal bankruptcy might absolve you of the debt, it would not protect the beneficiaries.
Sorry to not have better news.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
My Trustee has been dishonest ever since day one of my bankruptcy and I am afraid that since she has a personal hatrad towards me that she will prolong my bankruptcy can she do that......I am in my 4th month......she has not informed be about anything pertaining to my file I found out through other sources.....
I have read the code of ethics and I know that dishonesty is part of it.....
I am at my wits end and very frustrated with her.....
Can you give me any advice on what to do.....
November 10, 2009 9:49 AMAnonymous said...
My Trustee has been dishonest ever since day one of my bankruptcy and I am afraid that since she has a personal hatrad towards me that she will prolong my bankruptcy can she do that......I am in my 4th month......she has not informed be about anything pertaining to my file I found out through other sources.....
I have read the code of ethics and I know that dishonesty is part of it.....
I am at my wits end and very frustrated with her.....
Can you give me any advice on what to do.....
Hello Anonymous,
It's always disheartening to hear when for some reason a bankrupt person and their Trustee do not get along.
Your Trustee can object to your discharge - therefore possibly prolonging your bankruptcy, but there would have to be gounds to do so. The duties of a bankrupt person are fairly straightforward: pay the administration fees or surplus income as required, submit proof of income and expenses each month of the bankruptcy; attend all required counselling sessions, surrender all non-exempt assets to the Trustee, and generally cooperate with the Trustee in the identification and realization of his/her assets for the benefit of creditors.
If you feel your Trustee has acted unethically for some reason and you cannot get an explanation from him/her, then you do have recourse to report the issues to the Office of the Superintendent of Bankruptcy (Industry Canada) Their website is as follows: http://strategis.ic.gc.ca/eic/site/bsf-osb.nsf/eng/home
I hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhuoseCoopers Inc.
1-888-PWC-DEBT
Our house is in my wife's name. Can my creditors force the sale of her house to realize on my matrimonial home rights? Is my wife responsible for my credit card debts?
I am thinking of fileing chap 7, i have two car payments and a harley payment, i owe 5600.00 on the bike , i am filing a single chapt. 7 without my wife. she has her name on the bike title also, my question is if the bike is worth 15000 and both name are on it will they take it from us? we really want to keep it, how would we be able to.
November 16, 2009 3:32 PM Anonymous said...
Our house is in my wife's name. Can my creditors force the sale of her house to realize on my matrimonial home rights? Is my wife responsible for my credit card debts?
Hi Anonymous,
In Ontario, your interest in the home based on matrimonial rights will generally only triggered on separation/divorce. Therefore, before those events occur, you do not have an ownership interest in the house. The main exception to this would be if at one time you owned the property jointly with your wife and then transferred your ownership to her. If this occurred while you had debts, your creditors may be able to challenge the transfer and have it reversed. Regarding credit card debt, your wife will not be liable for your credit card debt unless she is listed jointly on the account or has a spousal card that she has used for purchases.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
November 17, 2009 9:21 AM Anonymous said...
I am thinking of fileing chap 7, i have two car payments and a harley payment, i owe 5600.00 on the bike , i am filing a single chapt. 7 without my wife. she has her name on the bike title also, my question is if the bike is worth 15000 and both name are on it will they take it from us? we really want to keep it, how would we be able to.
Hi Anonymous,
To clarify, Chapter 7 refers to United States bankruptcy law pertaining to individuals. As I am a Bankruptcy Trustee in Canada, practicing in the Province of Ontario, I can only comment on Canadian bankruptcy law and how it relates to Ontario property law.
There is a vehicle exemption in Ontario of $5,650 which can be claimed against one vehicle. Assuming you were to claim this exemption against the Harley, and the lien is $5,600 for the amount owed, that leaves about $3,800 of value in the bike unaccounted for. If the ownership is in both your names, then your share of the remaining value is about $1,700. If you file bankruptcy in Ontario, your Trustee will be looking for about $1,700 of value to come into the bankruptcy. Most Trustees would be open to the idea of you making that payment into the bankruptcy (over time if necessary)rather than for the vehicle to be sold to recover the amount. Again, please note that the vehicle exemption can only be claimed against one vehicle. If your other vehicles are worth more than the amount you owe for them, you may be required to give them up or pay the difference into the bankruptcy in order to keep them.
I would recommend you consult with a Trustee to determine the exact impact of you filing bankruptcy on your vehicles and other property. Please note that PricewaterhouseCoopers Inc. offers an initial consultation free of charge, and there is no obligation on your part.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I have lived in Canada since 1969. I have my home and I am always on time with my payments and I am current with all payments. I helped my son and co-signed for a home for him and his family. he has had a problem with these investors for (TWO YEARS)! Now they say that they want alot more money! He can not do it. So my question is, "Can I go bankrupt and still keep my house???? PLEASE RESPOND BACK!!!!!!!!!!!! THANK YOU SO MUCH.
Hello,
How do I find out if the company I used to work for has filed for bankruptcy? They owe the staff two months salary. We already put in claims with the Labor Board but if they have gone bankrupt then our claim will be put on the top of the pile. The Labor Board said we have to supply them with this information.
Thank you.
I am considering either bankruptcy or a credit proposal. I am about 80,000 in debt and in the process of seperating. In the course of finding out all my options am I allowed to talk to different trustees from different firms?
November 29, 2009 10:47 AM angela Thurston said...
I have lived in Canada since 1969. I have my home and I am always on time with my payments and I am current with all payments. I helped my son and co-signed for a home for him and his family. he has had a problem with these investors for (TWO YEARS)! Now they say that they want alot more money! He can not do it. So my question is, "Can I go bankrupt and still keep my house????
Hello Angela,
I apologize for the delay in my response. Often, people can file bankruptcy and keep their home. However, it depends on the difference between the mortgage(s) and the value of the property after expected selling costs - also called your 'equity' If there is equity on the property, that amount must be paid into the bankruptcy somehow for the benefit of your creditors. That can happen either by the bankrupt person paying the amount into the bankruptcy over time (or by borrowing from friends or relatives), or by the house being sold. If there is a lot of equity in the property, then unfortunately in those cases, the house must often be sold. Obviously, not knowing all the details of your situation, I cannot offer any specific advice.
Please feel free to contact us directly for a free confidential review of your sitution.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
December 8, 2009 11:24 AM
Anonymous said...
Hello,
How do I find out if the company I used to work for has filed for bankruptcy? They owe the staff two months salary. We already put in claims with the Labor Board but if they have gone bankrupt then our claim will be put on the top of the pile. The Labor Board said we have to supply them with this information.
Thank you.
Hi Anonymous,
Anyone can do a search to see if a person or company has filed a bankruptcy. You can go to the Superintendent of Bankruptcy (Industry Canada) website at:
http://strategis.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br01991.html
There may be a nominal fee of $8.00 charged for the service.
I hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
December 9, 2009 5:14 PM
Anonymous said...
I am considering either bankruptcy or a credit proposal. I am about 80,000 in debt and in the process of seperating. In the course of finding out all my options am I allowed to talk to different trustees from different firms?
Hi Anonymous,
Like any professional advice, it's often good to get a second opinion. There is nothing preventing you from consulting with more than one Trustee. Given that Trustee training and licencing is regulated, and we all operate under the requirements of the Bankruptcy and Insolvency Act, the advice should be fairly consistent.
I trust this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I lost my job in May 2009 started working again in Oct but I had to sell my house to move. I ended up with an $11000 penanlty and I have accumilated even more debt and I can't sleep. I need help. I had a CP in 2002 finished paying 2005. What can I do?
Brent
January 5, 2010 4:27 PM
Anonymous said...
I lost my job in May 2009 started working again in Oct but I had to sell my house to move. I ended up with an $11000 penanlty and I have accumilated even more debt and I can't sleep. I need help. I had a CP in 2002 finished paying 2005. What can I do?
Brent
Hi Brent,
Sorry to hear of your financial difficulties. The unstable job market has made it very difficult for a lot of people in the last year or so.
It's hard to give you specific advice without knowing the whole picture. However, you may be able to file another Consumer Proposal to deal with your current debt problems. If your income is stable and you have money left after your normal monthly expenses, this may be a good option. Keep in mind that a proposal always has to be better for the creditors than if the person files bankruptcy. So a Trustee will look at what non-exempt assets you have and how much surplus income (per the government standards) you would have to pay into a bankruptcy. Bankruptcy law changed significantly in September 2009, and impacts these calculations. Given all this, I would strongly recommend you consult with a Trustee to review your options. You are entitled to relief and a good night's sleep. Please note that PricewaterhouseCoopers offers initial consultations free of charge, with no future obligation on your part. Feel free to give one of our offices a call.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
My wife and I have $140 in unsecured debt, a mortgage of $325k and make a combined income of 120k. We live cheque to cheque and are often in our OD 3-4 k by months end. I've tried to refinance the 60k or so of our debt that is at higher rates, but the banks won't consolidate at less than 10% over 7 costing a fortune in interest.
Can 1 of us declare without dramatically effecting the other?
Should we declare? What happens to our home
January 9, 2010 10:06 AM Anonymous said...
My wife and I have $140k in unsecured debt, a mortgage of $325k and make a combined income of 120k. We live cheque to cheque and are often in our OD 3-4 k by months end. I've tried to refinance the 60k or so of our debt that is at higher rates, but the banks won't consolidate at less than 10% over 7 costing a fortune in interest.
Can 1 of us declare without dramatically effecting the other?
Should we declare? What happens to our home.
Hi Anonymous,
Its difficult to predict the impact of one or both of you filing bankruptcy without additional information. If your debts are joint, then the creditors will look to the non-bankrupt person for payment. If you have equity in your house (i.e. you would actually receive money if you were to sell it after the mortgage(s), real estate and legal fees were paid), then the bankrupt person's share of it must be paid into the bankruptcy - or the house would have to be sold to recover the same amounts for the creditors. Also, please note that when a person files bankruptcy, their income is monitored throughout the process and they may be required to pay half of any income over certain thresholds set by the government based on the number of people in the household. For a person not previously banrupt, these payments may be required for up to 21 months. An alternative to bankruptcy is a formal Consumer Proposal - which would allow you to settle your debts with your creditors over time and your assets remain under your control.
I would recommend you consult with a Trustee to consider your options in more detail. Please note that we offer an initial consultation free of charge.
I hope this helps
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
I have not filed taxes for over a decade.I will soon be filing for at least the last two years and will then likely have to file for bankruptcy.My spouse (of three years) has always filed her taxes with the exception of 2008.She is now in the process of filing for 2008.If she does this before I file taxes/bankruptcy will this make a difference for my procedure.
If I declare bankruptcy will my Mutual Funds which are in the form of a family RESP be taken? My daughters are listed as the beneficiaries. Is there a preventative pre-bankruptcy step I can take to protect their education funds?
Hello
My wife and I have moved to europe. We have a debt of about $13000 remaining in Canada. Unfortunately we are not employeed as of yet and in fact my wife has started school now and will not be able to work for over a year. I am going to a language school to learn the language so that I will be able to get employment. But feel that will still be some time before I will have enough language skills to do my job. We are falling not at this point falling behind on the payments but will shortly as our money is running out.
The question I have is that we are planing to come back to Canada in a couple of years, if we file for bankruptcy while we are here how long after we come back will our credit be affected. I understand the laws have changed as of last year but can not find the right answers. We have no assets in canada at this time.
January 16, 2010 12:11 PM
a said...
I have not filed taxes for over a decade.I will soon be filing for at least the last two years and will then likely have to file for bankruptcy.My spouse (of three years) has always filed her taxes with the exception of 2008.She is now in the process of filing for 2008.If she does this before I file taxes/bankruptcy will this make a difference for my procedure.
Hello a,
The basic answer is no. Her choosing to file her taxes will have little if any impact on you filing or a bankruptcy process. However, if she has not been including your income all these years on her tax returns, and then those figures are provided to Canada Revenue Agency (CRA), she may be reassessed for any credits she may have been granted.
For you, a bankruptcy would include any tax return period prior to the date of bankruptcy, regardless of whether the return is filed or assessed. In other words, filing bankruptcy in 2010 will relieve you of any tax debt for 2009 and any prior tax year, and the part of 2010 up to the date of bankruptcy.
A Bankruptcy Trustee is obliged to complete the tax returns for the year of bankruptcy (the part of the year preceding the bankruptcy) and the prior year - so some tax returns will be completed for you as part of the process.
I trust this helps,
Warmest regards,
Wes Cowan, MA, CIPR
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
January 19, 2010 1:13 PM
Anonymous said...
If I declare bankruptcy will my Mutual Funds which are in the form of a family RESP be taken? My daughters are listed as the beneficiaries. Is there a preventative pre-bankruptcy step I can take to protect their education funds?
Unfortunately, RESPs are considered assets of a bankrupt parent who is registered on the fund. As such, the realizable value of the RESP must be paid into the bankruptcy - either by the collapse of the fund or by the parent paying an amount equivalent to the realizable value (what the Trustee would receive if the fund was collapsed)to the Trustee. The realizable value of an RESP is often much lower than its stated value, because on collapse, the government contributions and sometimes also some of the investment gains are lost.
Please note that any transfer of the fund on the eve of bankruptcy to try to protect it would be condidered fraudulent under bankruptcy law and could be reversed by the Trustee/Court in order to bring the funds back into the bankruptcy.
I hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
January 23, 2010 5:10 AM
Dave. said...
Hello
My wife and I have moved to europe. We have a debt of about $13000 remaining in Canada. Unfortunately we are not employeed as of yet and in fact my wife has started school now and will not be able to work for over a year. I am going to a language school to learn the language so that I will be able to get employment. But feel that will still be some time before I will have enough language skills to do my job. We are falling not at this point falling behind on the payments but will shortly as our money is running out.
The question I have is that we are planing to come back to Canada in a couple of years, if we file for bankruptcy while we are here how long after we come back will our credit be affected. I understand the laws have changed as of last year but can not find the right answers. We have no assets in canada at this time.
Hi Dave,
Generally speaking, as a first-time bankrupt person, you would have a 'black mark' on your credit record for 6 years from the time you finish a bankruptcy (i.e. receive a discharge). A bankruptcy for a first-time bankrupt person would last from 9 to 21 months, depending on your income level.
It may be difficult to file a Canadian bankruptcy while abroad. Trustees generally want to meet with debtors in person, and there are mandatory financial counselling sessions that you are expected to attend during the bankruptcy (in extreme circumstances these can be conducted remotely). Unless you plan to be back in Canada regularly over the next two years, you may choose to wait to file bankruptcy until you return, assuming your financial circumstances have not improved. You should advise your creditors of your current circumstances; they may choose to suspend collection action against you since you are not resident in Canada and do not have any assets.
Hopefully, you become employed and can continue payments on your debt so that you do not need to consider bankruptcy at all.
All the best,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
How long does bankruptcy stay on your record and if i decleared bankruptcy 20 years ago, will that affect me now if i have to file for bukruptcy again in 2010. thanks jc
January 25, 2010 6:37 PM
Anonymous said...
How long does bankruptcy stay on your record and if i decleared bankruptcy 20 years ago, will that affect me now if i have to file for bukruptcy again in 2010. thanks jc
Hi jc,
It's my understanding that creditor data related to the debts in your first bankruptcy is purged from your credit bureau record about 6 years from your discharge. However, there still remains a notation on your record that you filed bankruptcy. This too may disappear if your first bankruptcy was long enough ago, but it is unclear just how long ago the first bankruptcy would have to have been for this to happen. Assuming the notation is still on your credit bureau file, the creditor data is not purged as quickly the second time - it may take as long as 14 years for it to disappear after your discharge. Obviously this makes getting credit again difficult for much longer (although not impossible, I might add).
Sorry to not have better news,
Regards
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
my husband has finished his obligations with the trustee it has been 5 years, and still no courtdate
the trustee says it is because it is his second time, but it does not seem right to me, as I know of others who have had seconds, and it has not taken almost 5 years to get a courtdate.
whenever he calls her, she does not speak to him , does not return his calls, but her secretary keeps saying everything is ok, the courts are backed up
I am concerned, because I have heard that she is in some sort of trouble with the trustee board, and I wonder if perhaps this is the reason?
who can we call? what can we do? any help would be appreciated
thankyou
I cosigned for a now ex-fiance for 2 loans, 1 student line of credit and one car loan. The car loan in secured and I am a co applicant, both loans have apporximately $10,000 left owing, she is now threatening to claim bankruptcy. I am wondering where I stand and what I can do to get as much money back from her as possible. I do understand it is my legal obligation to pay the loans as a cosigner but what can I do to minimize the amount I pay or possibly pay none at all.
February 2, 2010 10:19 AM sandy said...
my husband has finished his obligations with the trustee it has been 5 years, and still no courtdate
the trustee says it is because it is his second time, but it does not seem right to me, as I know of others who have had seconds, and it has not taken almost 5 years to get a courtdate.
whenever he calls her, she does not speak to him , does not return his calls, but her secretary keeps saying everything is ok, the courts are backed up
I am concerned, because I have heard that she is in some sort of trouble with the trustee board, and I wonder if perhaps this is the reason?
who can we call? what can we do? any help would be appreciated
thankyou
Hi Sandy,
Sorry to hear of your husband's trouble getting a discharge. Most Trustees, want to see their bankrupts discharged as soon as legally possible. Assuming your husband has done all his duties (attended counselling, paid all fees/surplus, provided all required financial information, etc.), he would be eligible to request a discharge from the court. In some jurisdictions, it is true that the court backlog is immense (e.g. Toronto). However, I ahve never known it to take more than a year from the time the Trustee applies to the court to the time the discharge hearing is held. If there is a file administration problem, then this could be the source of the delay. If you are truly unable to get cooperation from the Trustee, then you should contact the Office of the Superintendent of Bankruptcy to lodge a complaint.
Hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
February 5, 2010 3:14 PM
Anonymous said...
I cosigned for a now ex-fiance for 2 loans, 1 student line of credit and one car loan. The car loan in secured and I am a co applicant, both loans have apporximately $10,000 left owing, she is now threatening to claim bankruptcy. I am wondering where I stand and what I can do to get as much money back from her as possible. I do understand it is my legal obligation to pay the loans as a cosigner but what can I do to minimize the amount I pay or possibly pay none at all.
Hi Anonymous,
If she has kept the car loan up to date, she is most likely going to be able to keep the car after her bankruptcy and continue payments. Assuming she completes the loan payments, you will have no exposure on that debt. On the other hand, if she stops making the payments and gives up the car to the secured creditor, any shortfall after it is liquidated will fall to you to pay.
Her student line of credit is an unsecured debt, but may be government guaranteed, depending on how it was set up. If it is government guaranteed, it will probably survive her bankruptcy and they will go after her for the balance first. If it is not government guaranteed, then it is a regular unsecured debt which she will be relieved of in her bankruptcy - leaving you on the hook for the balance. If you pay off a cosigned loan, then you may be eligible to make a claim in her bankruptcy for the amount (effectively stepping into the shoes of the original creditor). However, if there are no funds in her bankruptcy to distribute to her creditors, then you will not receive any money back. Technically you could oppose her discharge from bankruptcy to try to force her to pay back some of her debts, but the Court would have to be convinced that it was appropriate and in the best interests of all the creditors.
Assuming you end up being liable for both these debts, depending on your financial circumstances generally, you may choose to settle informally with the creditors, file a consumer proposal, or even a bankruptcy if necessary which would reduce or eliminate the amount you have to pay.
Regards,
Wes Cowan,MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
if i file for bankruptcy will i be able to keep my house and car
February 19, 2010 5:51 AM
如æ¤çš„ said...
If you can not be kind, at least have the decency to be vague.............................................
如æ¤çš„,
Hopefully you are just sharing your general philosophy with us; on reflection, I don't feel that my comments have ever been unkind, therefore I have not needed to be vague (except where lack of details has required it)...
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
February 20, 2010 7:11 PM Anonymous said...
if i file for bankruptcy will i be able to keep my house and car
Hello Anonymous,
Without specific details of your situation I can't say for sure. However, many people who file for bankruptcy do in fact keep their house and car. Whether you get to keep these things usually depends on two things. First, whether the payments on the mortgage/loan(s) are up to date. If not, the bank or finance company may choose to seize the house/car. The other factor is whether there is any value in the house/car for the bankruptcy after taking into account anticipated selling costs and the amount required to pay off any mortgages or loans against them. There may also be exemptions on these kinds of property depending on the province you live in. In Ontario, there is no exemption on a house, but the first $5,650 value of one vehicle is considered exempt and does not form part of the bankruptcy.
I would encourage you to get more specific advice on your situation. We offer a free initial consultation to help you better assess the impact of a bankruptcy on your assets - feel free to give us a call at the number listed below.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I went bankrupt about 10 years ago. I now find myself in debt again for over $100,000. this would be my second time and I am worried that I will never get credit again. I make almost $60,000 a year and can afford to pay maybe $1200 - $1500. Right now all my cards are maxed out and I'm paying less than minimum payments on almost all my cards, but the creditors are still constantly bothering me!(I think MIN payments would run me $6000 / month)
Would I have any chance at a proposal?
Would one bankruptcy and one propasal on my credit file be just as bad as two bankruptcies?
Is there any hope for me?
This "SURPLUS INCOME" deal seems to award those who rack up a big debt & never had a way to pay!!!
If a guy/gal making 30grand racks up a massive debt, they get away with rgular bankruptcy and the minimum payments.
A guy/girl making 50 grand racks up the same debt, yet has to pay SURPLUS + pay for longer.
I'm in debt and want to get out, but I don't like this new system I have read about.
Would I be punished if I were to claim bankruptcy and then tell my employer that I only want to work 25 hours a week?
Or is this a crime???
What if i quit my job, file for bankruptcy, and go on welfare?
WOULD THIS MAKE me more favorable for a nice clean discharge in 9 months? Lord knows i could really use a break from the daily grind of a 9-5.
i went into debt in 1999/2000 and just ignored it. the place i was living at the time is still receiving phone calls and letters in the mail for me.
is this normal for them to still be going after me this agressivly?
February 27, 2010 6:10 PM
Anonymous said...
I went bankrupt about 10 years ago. I now find myself in debt again for over $100,000. this would be my second time and I am worried that I will never get credit again. I make almost $60,000 a year and can afford to pay maybe $1200 - $1500. Right now all my cards are maxed out and I'm paying less than minimum payments on almost all my cards, but the creditors are still constantly bothering me!(I think MIN payments would run me $6000 / month)
Would I have any chance at a proposal?
Would one bankruptcy and one propasal on my credit file be just as bad as two bankruptcies?
Is there any hope for me?
Hi Anonymous,
Sorry for the tardy reply - I was slowed sown by a bad cold over the last week or so.
Based on your comment that you could afford to make payments of between $1,200 to $1,500 per month, you could definitely make a viable proposal. A consumer proposal can be as long as 5 years - 60 monthly payments. At $1,200 per month over 60 months for example, you would be paying in $72,000 against the $100,000 you owe - a very repectable amount. This would still have to be contrasted against what your creditors would receive if you were to file a bankruptcy - taking into account what assets you own and the amount of surplus income you would be required to pay. There's no question that your credit will be damaged after filing either a proposal or bankruptcy after having filed a bankruptcy previously, but in the longer term, it will still be possible to reestablish credit. The proposal option will likely make this easier going forward.
Hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
March 1, 2010 10:16 PM
Alain said...
This "SURPLUS INCOME" deal seems to award those who rack up a big debt & never had a way to pay!!!
If a guy/gal making 30grand racks up a massive debt, they get away with rgular bankruptcy and the minimum payments.
A guy/girl making 50 grand racks up the same debt, yet has to pay SURPLUS + pay for longer.
I'm in debt and want to get out, but I don't like this new system I have read about.
Would I be punished if I were to claim bankruptcy and then tell my employer that I only want to work 25 hours a week?
Or is this a crime???
What if i quit my job, file for bankruptcy, and go on welfare?
WOULD THIS MAKE me more favorable for a nice clean discharge in 9 months? Lord knows i could really use a break from the daily grind of a 9-5.
Hi Alain,
Thanks for your provocative insights. It is a point that is not lost on Trustees and others in the insolvency profession.
I have had bankrupts myself who have deliberately limited their income during bankruptcy so as to not have to pay surplus income or to avoid paying for longer. That is their choice. It is not an offence to do so - provided you are actually earning less and not simply hiding the extra you earn.
That said, on a moral level, I find it a questionable choice. Even by a bankrupt having to pay surplus income over an extended period of time, in my experience the person is still paying back much less than the original debt. Presumably you expected to pay back the amount you borrowed when you signed the contract for the credit card or loan, right? So why would you now shy away from paying at least part of it back? It's true that a person filing for the first time can receive a discharge at the end of 9 months if they have little or no surplus income (per govenment set thresholds based on the number of people in the family), but someone who has filed bankruptcy previously must stay in bankruptcy for a minimum of 24 months. In the latter case, that would be a long time to choose to not have regular income.
Just some thoughts to ponder...
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
March 5, 2010 11:59 PM
used2spendit said...
i went into debt in 1999/2000 and just ignored it. the place i was living at the time is still receiving phone calls and letters in the mail for me.
is this normal for them to still be going after me this agressivly?
Hello used2spendit,
I like your blog name! The collection process can be a strange animal indeed. These days we are seeing accounts transferred from one collection agency to another, and even collection agencies buying up blocks of 'uncollectible' accounts from mainstream creditors for cents on the dollar, hoping to make a profit overall from the accounts they can collect. With difficult economic times, some companies ramp up collection efforts to get more dollars on their bottom line. The result is that we see creditors still actively pursuing debtors years after the original debt. That said, the debts may in fact no longer be legally collectible unless the creditor has taken steps to ensure that it survives (e.g. get a court judgment against you prior to certain deadlines). This is typically governed by provincial law.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I have not filed tax for over a decade.I was at least going to file for 2008 before I came to speak to someone at PWC.Should I also file a voluntary disclosure form with my 08 taxes or would PWC do this for me as part of the bankruptcy process?Or should I just hold off filing altogether until I speak with someone.
March 12, 2010 7:58 AM
Anonymous said...
I have not filed tax for over a decade.I was at least going to file for 2008 before I came to speak to someone at PWC.Should I also file a voluntary disclosure form with my 08 taxes or would PWC do this for me as part of the bankruptcy process?Or should I just hold off filing altogether until I speak with someone.
Hi Anonymous,
The Bankruptcy and Insolvency Act requires that a Trustee file your tax return for the year of your bankruptcy and the immeidately preceding year. That's as far back as we are required to go. A Trustee will likely not file a voluntary disclosure for you nor any returns prior to the year immediately preceding the one in which you file bankruptcy. That said, any debt resulting from any personal tax return period which precedes the date of bankruptcy is included in the bankruptcy - so if you do make a voluntary discosure and amounts are assessed even after your bankruptcy, they will be included. Since legislative changes in September 2009, if the overall debt you owe CRA is assessed at more than $200,000, your discharge may be opposed and you may be required to pay something toward it.
Definitely come in to discuss your situation further, and whether you have any other kinds of debt that would form part of the bankruptcy.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I went through a long and stressful divorce. I almost lost my house and my credit is ruined due to the fact that my ex refused to sell the house or contribute the the mortgage. I was ordered to pay certain debts from the equity in the house (which I did in June 2007), and there was additional debt left that I am still paying. I can't get out of this hole I'm in and now the court has ordered that we have to equalize our net family property and I owe him $15000.00 forthwith. The only asset that I had and still have is my pension (which is why I owe him) and no ability to pay him $15000 as well as all of my other debts. I have 3 children with him (13,13 and 9) as well as 2 young children with my new partner. Would I still have to pay him that money if I filed for bankruptcy?
March 25, 2010 11:19 AM
Anonymous said...
I went through a long and stressful divorce. I almost lost my house and my credit is ruined due to the fact that my ex refused to sell the house or contribute the the mortgage. I was ordered to pay certain debts from the equity in the house (which I did in June 2007), and there was additional debt left that I am still paying. I can't get out of this hole I'm in and now the court has ordered that we have to equalize our net family property and I owe him $15000.00 forthwith. The only asset that I had and still have is my pension (which is why I owe him) and no ability to pay him $15000 as well as all of my other debts. I have 3 children with him (13,13 and 9) as well as 2 young children with my new partner. Would I still have to pay him that money if I filed for bankruptcy?
Hi Anonymous,
There are some debts that are not cleared by bankruptcy - notably child or spousal support. However, equalization amounts, unless they are characterized by the court as as being, or in lieu of, child or spousal support, would be ordinary claims in bankruptcy and not subject to any preferential treatment.
It should be noted that any debt may remain collectible if the creditor can convince a court to declare that the bankruptcy does not apply to them.
As usual, I would recommend you consult with a Trustee in person to review the specifics of your situation.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
My marriage is falling apart due to a few reasons but money issues is a major part. I co-signed three lines of credit with my spouse who is a spendaholic. I am responisible for the debt as I did co-sign. However I am wondering if there is any way I obtain my own credit rating or somehow indicate that he is the one who has used this credit line.
Most of the people claim the bankruptcy because they have more debt than they can ever hope to repay…..And because they do not want to be taken this to court. And you have no way to ever repay your debts,then bankruptcy may be an good option for any one……..Well……….. thanks for sharing such a great information with us….I like it…. and i must be agree with this Chapter 7 bankruptcy can be eliminate most kinds of unsecured debt and Chapter 13 bankruptcy can enables individuals with regular income bases to develop a plan to repay the debt.If the debtor’s current monthly income is less than the applicable state media then also there is same plan for the Debt…….???????
March 31, 2010 12:25 PM Anonymous said...
My marriage is falling apart due to a few reasons but money issues is a major part. I co-signed three lines of credit with my spouse who is a spendaholic. I am responisible for the debt as I did co-sign. However I am wondering if there is any way I obtain my own credit rating or somehow indicate that he is the one who has used this credit line.
Hi Anonymous,
Sorry for the delayed reply - I have been away a fair bit.
Unfortunately, as a co-signer, those creditors see you as being equally responsible for the debt. They are not likely to remove you from the account until the account is paid to $0. If you separate from or divorce your spouse, you may be able to have them put a notation on your file that any charges after a certain date you will no longer be your responsibility. Unfortunately, anything before that date you are considered to be 'jointly and severally liable' to pay - which means that you are both 100% liable for the debt regardless of who made the charges. This will of course impact your credit rating if the amounts are not being paid.
Sorry to not have better news on this - as a co-signer, you are effectively being victimized by his bad credit habits
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
April 5, 2010 12:38 AM
File Personal Bankruptcy said...
Most of the people claim the bankruptcy because they have more debt than they can ever hope to repay…..And because they do not want to be taken this to court. And you have no way to ever repay your debts,then bankruptcy may be an good option for any one……..Well……….. thanks for sharing such a great information with us….I like it…. and i must be agree with this Chapter 7 bankruptcy can be eliminate most kinds of unsecured debt and Chapter 13 bankruptcy can enables individuals with regular income bases to develop a plan to repay the debt.If the debtor’s current monthly income is less than the applicable state media then also there is same plan for the Debt…….???????
Hi FBP,
Just to be clear, as a Trustee practicing in Ontario, Canada, the law I operate under is The federal Bankruptcy and Insolvency Act and related Ontario statutes. The terms 'Chapter 7' and 'Chapter 13' refer to United States bankruptcy law, which is not applicable in Canada. Although I have some familiarity with the US law, I would not presume to give advice with respect to it.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
hello how are you doing today and l want to file bankruptcy but l am on odsp well l lose that income when l file and how much does it cost to file and l have around 14,000 and l dont know what to do can you please help me
are monies owed to government re taxes covered?
are monies owed to government re taxes covered?
I owe approximatly 85,000.00. I also owe c.r.a. about 15,000.00. I have no real estate or assets. If I declare bankrupcy will I still owe c.r.a. My current income is only 1500.00 / month.
Thanks, anonymous
April 22, 2010 12:41 PM Anonymous said...
hello how are you doing today and l want to file bankruptcy but l am on odsp well l lose that income when l file and how much does it cost to file and l have around 14,000 and l dont know what to do can you please help me
Hi Anonymous,
Sorry for the tardy reply - a combination of being out of the office and a very busy tax season has left little time for blogging.
I will answer your questions to the extent I can. First, you will not lose your ODSP if you file bankruptcy - you will continue to receive that income. The amount you have to pay in bannkruptcy is fairly consistent from Trustee to Trustee as our fees are regulated by law. It is also dependent on your total monthly income. If you in fact have $14,000 that is not in a pension plan or RRSP, then it would be considered an 'asset' in you r bankruptcy and your Trustee would be required to bring it into the bankruptcy to help pay your creditors.
I would strongly recommend giving us a call for a free initial consultation to determine what your best option is.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
April 25, 2010 12:15 PM
lillie said...
are monies owed to government re taxes covered?
Hi Lillie,
Again, as per the previous blogger, apologies for the delay in my response.
The answer to your question is: it depends. Income tax debts are included. Property tax debts are not because they are 'secured' (liened) against the property.
In general however, government gets no special treatment - most tax debts are included and are ultimately cancelled by a bankruptcy.
We would be happy to review the specifics of your situation and advise you accordingly.
Warmest regards,
Wes Cowan
May 4, 2010 9:00 PM
Anonymous said...
I owe approximatly 85,000.00. I also owe c.r.a. about 15,000.00. I have no real estate or assets. If I declare bankrupcy will I still owe c.r.a. My current income is only 1500.00 / month.
Thanks, anonymous
Hi Anonymous,
This question is similar to the previous blogger. I assume your debt is due to income tax.
Generally speaking, Canada Revenue Agency (CRA) debt is cancelled by bankruptcy.
I trust this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
Hi - first, I wanted to thank you. I wrote to you about a year ago and you provided a lot of helpful information. Since then, I've learned a lot from your answers to other people's questions here, and for that I am grateful. I feel less overwhelmed by all the challenges facing me. My question now is, I'd like to consult with your firm, but where are you located? How would I obtain your company as a trustee to act on my behalf?
May 5, 2010 9:02 AM
Tracy said...
Hi - first, I wanted to thank you. I wrote to you about a year ago and you provided a lot of helpful information. Since then, I've learned a lot from your answers to other people's questions here, and for that I am grateful. I feel less overwhelmed by all the challenges facing me. My question now is, I'd like to consult with your firm, but where are you located? How would I obtain your company as a trustee to act on my behalf?
Hi Tracy,
You are most welcome! I understand that the possibility of bankruptcy is an intimidating thing to face - and it's a tough choice to actually go and see someone about your financial troubles. That's why I maintain this blog - to help people get a bit more info about the process and what to expect. Things often seem less scary when you know more about them...
We would be pleased to meet with you. PwC has offices in most major cities in Canada, and we also have satellite offices in a number of smaller communities.
If you happen to be in the South-Western Ontario area, then you may actually meet me in person, as I serve our Waterloo, Woodstock and London offices. In any case, if you call the 1-888-PWC-DEBT number, it will connect you to the office closest to where you are calling from.
Please see my website as well at:
http://law.bankruptcycanada.com/Waterloo-Bankruptcy-Trustees.htm
and feel free to contact me directly via the website if you have any questions or concerns. My site also has links to our other offices and the people there who can help.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
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