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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
747 comments:
«Oldest ‹Older 601 – 747 of 747Hi there, my wife declared bankruptcy in 2005 for approx $60,000. She kept 2 credit cards with zero balances. She says her trustee "approved it", but I think she is lying. Can she be charged with fraud? Would I be involved too as I know if what she did? Any help would be great. Thanks...
May 5, 2010 9:05 PM
Anonymous said...
Hi there, my wife declared bankruptcy in 2005 for approx $60,000. She kept 2 credit cards with zero balances. She says her trustee "approved it", but I think she is lying. Can she be charged with fraud? Would I be involved too as I know if what she did? Any help would be great. Thanks...
Hi Anonymous,
For some reason my earlier post didn't work.
Technically, a bankrupt person is required by the Bankruptcy and Insolvency Act to surrender to the Trustee "all credit cards issued to and in the possession and control of the bankrupt". Whether or not the cards have a balance is irrelevant. I find it unlikely based on this that a Trustee would allow a bankrupt to keep even zero-balance cards, although it could have been an honest mistake depending on the experience level of the Trustee. The reason that the bankrupt must surrender ALL cards is because the Trustee (and the bankrupt) has a duty to inform any credit granters that the person has filed bankruptcy - which occurs when the Trustee sends the cut cards back to the issuer with a notice of bankruptcy.
Although your wife may have failed to comply with her duties by not surrendering the cards, assuming she did not use them while she was in bankruptcy, she is not likely to be in any serious trouble - nor are you.
I hope this helps to put your mind at ease.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I have filed for bankruptcy. I met with the trustee on Wed. 5/26/2010. I run a business. My net profit is 45,000. The trustee wants 20,000 over the next 10 months as he believes the "client list" is a sellable asset. So he wants me to purchase it from him or he will sell it. No buyer would purchase the list without a covenant not to compete and I will not sign one. I can not survive on 50% of my net income. The net profit from the business does not take into account my wages for running it and I work many hours a week. How do I get the trustee to understand that if I could pay 20,000 in 10 months I would not need to file bankruptcy? Please help.
How do i approach a trustee as his Client if filing for bankruptcy on contempt fine and the resulting judgment of the contempt action.Should the trustee verify ant of the information as he has stopped the garnishment and bank account seizures I started.
Are the trustee's not governed by rules-and on that how do I file a complaint with the board.
May 29, 2010 6:55 PM Anonymous said...
I have filed for bankruptcy. I met with the trustee on Wed. 5/26/2010. I run a business. My net profit is 45,000. The trustee wants 20,000 over the next 10 months as he believes the "client list" is a sellable asset. So he wants me to purchase it from him or he will sell it. No buyer would purchase the list without a covenant not to compete and I will not sign one. I can not survive on 50% of my net income. The net profit from the business does not take into account my wages for running it and I work many hours a week. How do I get the trustee to understand that if I could pay 20,000 in 10 months I would not need to file bankruptcy? Please help.
Hello Anonymous,
A key part of a Trustee's job is to identify assets that can be liquidated for the benefit of a bankrupt's creditors. As part of that process, Trustees need to confirm whather an asset is saleable and in fact has value. Obviously, I do not have enough detail regarding your situation to comment specifically, however, I can make a few general comments and observations. The saleability (and therefore value) does seem to be in question, although presumably your competitors would benefit from having the client list regardless of whether they have exclusive rights to it - so there may in fact be a buyer for the list even without a non-compete agreement being signed by you. I would be interested in knowing how your Trustee arrived at the amount of $20,000. Did s/he actually list it for sale/bids to 'test the waters'? That's the best way to know what it's value is - and what conditions potential buyers would want to see.
Assuming you are required to pay the estimated value of the list into the bankruptcy, I'm not sure why you would be confined to only 10 months to pay it. I have had bankrupts make payments to the bankruptcy estate for quite some time. Of course, your discharge is delayed accordingly, but it allows for more manageable monthly payments.
Ultimately, if you feel your Trustee is being unreasonable, you have the opportunity to have the situation reviewed by the Superintendent of Bankruptcy, or by the bankruptcy court - as it is likely your file would be referred to the court anyway if you are unable to pay what the Trustee is asking by the time you would otherwise be eligible for discharge.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc
1-888-PWC-DEBT
May 30, 2010 4:18 PM
contempt said...
How do i approach a trustee as his Client if filing for bankruptcy on contempt fine and the resulting judgment of the contempt action.Should the trustee verify ant of the information as he has stopped the garnishment and bank account seizures I started.
Are the trustee's not governed by rules-and on that how do I file a complaint with the board.
Hello contempt,
I'm not sure I fully understand your situation, but I'll attempt an answer. It sounds like you got a judgment (and garnishment)against someone who then proceeded to file bankruptcy. As a result of that, your garnishment was stopped. Under the Bankruptcy and Insolvency Act, once someone files a bankruptcy, there is a 'stay of proceedings' that begins, prohibiting the commencing or continuing of any legal action against the bankrupt person (uless the Court specifically grants permission to continue)
Given the above circumstances, the Trustee was correct to send notice to the parties on whom you served the garnishment directing them to disregard it.
That said, if the bankrupt is in fact subject to a contempt of Court fine levied by the Court, such a debt would not be dischargeable through bankruptcy, and s/he would ultimately have to pay it.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
I had a legal separation and as an equalization he was to assume the debts, he filed bankruptcy two years later without my being notified, and added to the debt, now the creditors are after me, why didn't my agreement protect me?
Hi!
If I no longer leaving in the country, can they still chase me for the money I owe 3 years ago. Coz recently I received a call from Collection Agency demanding payment on behalf of my creditor.
Thanks Rainboe
June 3, 2010 9:24 AM frustrated said...
I had a legal separation and as an equalization he was to assume the debts, he filed bankruptcy two years later without my being notified, and added to the debt, now the creditors are after me, why didn't my agreement protect me?
Hi frustrated,
Unfortunately not an uncommon experience. The equalization you refer to is governed under provincial marital or family law. While it is binding on the spouses concerned, it does not bind the creditors - they will go after the party from whom they can collect. Since a bankruptcy prevents collection from the bankrupt person, the creditors have now turned to you.
I'm sorry that things have turned out this way. I have had a number of people come to see me because their ex filed bankrutpcy and left them with the debts.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhouseCoopers Inc.
1-888-PWC-DEBT
June 16, 2010 11:39 PM Rainbowshine said...
Hi!
If I no longer leaving in the country, can they still chase me for the money I owe 3 years ago. Coz recently I received a call from Collection Agency demanding payment on behalf of my creditor.
Thanks Rainboe
Hi Rainboe,
Technically, creditors can continue to try to collect the debt from you indefinitely if they take the correct actions to protect their right to collect - and they know where you are. However, practically speaking, it becomes harder for them to collect from you if you are living in a different country and all your assets and income are there - since any legal actions they may initiate may not be of any effect where you reside. Nevertheless, you will want to clear up the debt if you intend to return at some point or you have assets you left behind that they could take - and of course because you agreed to pay the debt back and morally have on obligation to do so.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
PricewaterhuoseCoopers Inc.
1-888-PWC-DEBT
hi, i think i may have to claim bankruptcy (NEVER thought i would have to say that as i have impeccable credit). i am being audited by revenue canada and they will see cash deposits made. my mother gave me the money from money she had "socked away" (tax has been paid on these funds) however i fear i will be given hassle about this because a lot of the money originated from the 1980s when put aside cash because she was living in fear of leaving my dad and wanted a secret reserve fund set aside.
My question is: I have a vehicle worth 43 000/ it is completely paid off. if the government wants to tax me on this substantial money that my mother gave me over time, I will have no choice but to file bankruptcy. I am not working-- i just completed my masters degree and am actively searching. i flat out refuse to pay additional taxes on money my mom gave me. we could not do a bank transfer as my dad would have found about the funds. so the money is looking fishy to the cra.
i told my mom i would pay her the full amount back when i sold my home. i am terrified that they can put a lien on my property or seize my car. if i switch title on my vehicle to my mom... can they seize it? any help is much appreciated.. i have been having severe anxiety over this situation.
I am in debt for retail sales tax for $5,700. and to a supplier for 12,000.. Both are demanding payment which I can't make due to slow business. I have already consolidated my bills previously and have not made the pymt on that for the last 3 mths. I have tried making pymt arrangements with the supplier but I can't afford to pay them as much as they would like each week.
I don't own anything and I donot have an income from the store which I own.
Is personnel and Corporate bankruptcy my only course of action?
Thank you for you time.
Rosana
My car is 10 years old and worth $6500.00 with no loan attached. What happens in to it in Bankruptcy
*****IMPORTANT UPDATE*****
On July 1, 2010, PricewaterhouseCoopers Inc sold its personal debt consulting practices in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Quebec to MEYERS NORRIS PENNY LIMITED ("MNP LIMITED"), a well established firm in Western Canada (see mnpdebt.ca)
For the most part, all of these practices moved over intact to MNP Limited.
I am pleased to be part of this exciting new transition and look forward to helping more people in financial distress under the MNP banner.
I apologize for the lack of blogging in the last two months. Due to transition and technical issues, I only obtained access again within the last few days.
Warmest regards to all our readers,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
1-888-775-4111
On July 24, 2010 2:17 PM Anonymous said...
hi, i think i may have to claim bankruptcy (NEVER thought i would have to say that as i have impeccable credit). i am being audited by revenue canada and they will see cash deposits made. my mother gave me the money from money she had "socked away" (tax has been paid on these funds) however i fear i will be given hassle about this because a lot of the money originated from the 1980s when put aside cash because she was living in fear of leaving my dad and wanted a secret reserve fund set aside.
My question is: I have a vehicle worth 43 000/ it is completely paid off. if the government wants to tax me on this substantial money that my mother gave me over time, I will have no choice but to file bankruptcy. I am not working-- i just completed my masters degree and am actively searching. i flat out refuse to pay additional taxes on money my mom gave me. we could not do a bank transfer as my dad would have found about the funds. so the money is looking fishy to the cra.
i told my mom i would pay her the full amount back when i sold my home. i am terrified that they can put a lien on my property or seize my car. if i switch title on my vehicle to my mom... can they seize it? any help is much appreciated.. i have been having severe anxiety over this situation.
Hi Anonymous,
Further to my update, apologies for the very delayed response.
I can understand your anxiety regarding CRA. Did your mother keep all of this money in cash all this time? If she withdrew it from a bank account, it will be an easy matter to show CRA where it came from. If she has in fact had it in cash since the 1980s, then all of the bills will be old issue - almost all of Canada's money had been updated (or eliminated in the case of the $1 & $2 bills) since that time. The remaining money in her possession, may be a kind of 'proof' for CRA of the origin of your deposits. Presumably she has (or you have) been keeping track of how much was lent. These records would also be helpful.
It would be best to try to get as much proof as possible about where the money came so as to avoid the CRA debt in the first place. There is also an appeals process, and ultimately, tax court, as a last resort.
In the worst case scenario wherein you are unable to convince CRA that the monies are not income and they assesses tax on the amounts, if you tranfer any asset of yours to anyone else to try to put it out of their reach, they have the right under the Income Tax Act to assess the recipient of the transfer for your tax debt. Even a Bankruptcy Trustee would be obliged to try to get the asset (or its value) back for the bankruptcy - so such transfers are never advisable.
Best of luck. I hope this helps.
Warmest regards,
Wes Cowan, MA CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
1-888-775-4111
August 26, 2010 12:49 PM Rosana said...
I am in debt for retail sales tax for $5,700. and to a supplier for 12,000.. Both are demanding payment which I can't make due to slow business. I have already consolidated my bills previously and have not made the pymt on that for the last 3 mths. I have tried making pymt arrangements with the supplier but I can't afford to pay them as much as they would like each week.
I don't own anything and I donot have an income from the store which I own.
Is personnel and Corporate bankruptcy my only course of action?
Thank you for you time.
Rosana
Hi Rosana,
Sorry to hear of your business difficulties.
It's difficult to give advice without seeing the whole picture. It sounds like you have an incorporated business which you are keeping afloat using personal money (not uncommon in small businesses). Corporate bankruptcies can sometimes be costly, but can be an effective way to wind down and close off the company. However, it is usually more pressing for the director to file bankruptcy, if there is a lot of personal liability for the corporate debt. Sometimes, it makes sense to only file a personal bankruptcy if the director does not have the funds to put the corporation into bankruptcy.
We would be happy to review your situation in more detail and provide specific advice. Please feel free to contact the MNP office closest to you - we are listed on the mnpdebt.ca website.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
1-888-775-4111
I have begun the process of filing bankruptcy but have run into a snag. There is $7000 in equity in my home and the trustee would likeus to make monthly payments over the next 12 months to compensate this differance. My problem is I don't have the exta in income to afford the extra payment. If I sold my house tomorrow I would owe more than I get after closing costs and the rate differential as I still have 4 years left on my mortgage. A consumer proposal is not a good idea for us, I don't know how to handle this situation. Our income is a little less than the amount that can carry a family of our size. Any suggestions about this situation would be greatly appreciated.
On September 14, 2010 8:47 PM Anonymous said...
I have begun the process of filing bankruptcy but have run into a snag. There is $7000 in equity in my home and the trustee would likeus to make monthly payments over the next 12 months to compensate this differance. My problem is I don't have the exta in income to afford the extra payment. If I sold my house tomorrow I would owe more than I get after closing costs and the rate differential as I still have 4 years left on my mortgage. A consumer proposal is not a good idea for us, I don't know how to handle this situation. Our income is a little less than the amount that can carry a family of our size. Any suggestions about this situation would be greatly appreciated.
Hello Anonymous,
I'm a little surprised that your Trustee has determined your equity to be $7,000 if you would in fact get nothing if you were to sell the house. If the house is sold (or the mortgage company takes the house and sells it), any shortfall would become a claim in your bankruptcy (assuming no further mortgage payments were made after bankruptcy). You wouldn't have the house, but you also wouldn't owe $7,000 to keep it ($7,000 would pay quite a bit of rent).
If you are intent on keeping the house and your Trustee is unable to determine an equity amount of less than $7,000, then I would suggest looking for a private mortgage to pay it out. Ask family or friends if they would be willing to loan you the $7,000 ( hopefully at a reasonable repayment rate)in exchange for a lien against your house. It might cost some money to draw up the legal documents. I realize that right now such a lien might not mean much as there is no 'realizable' equity if you were to sell the house today, but down the road there will be. Besides, you will probably end up paying the amount back before it would matter. However, it's likely that you can stretch the payments over 24 or 36 months, therefore making them more managable on a monthly basis.
I hope these comments help.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
Hello. I owe approximatly 15,000 including (10,000 in Credit Card Debt and 5000 Line of Credit at TD). I live with my parents and have no assets just a car I don't drive anymore with a total value of 600.00. I am in school and my total income is 1350 /month. I was wondering if bankrupcy would affect my parents at all.
I continued to make my car payments for 4 months after I declared bankruptcy but my job situation has changed and I can no longer afford it. I did not sign anything to reaffirm the debt. So the question is can I hand the car over to the secured creditor without further obligation ?
September 24, 2010 2:55 PM Anonymous said...
I continued to make my car payments for 4 months after I declared bankruptcy but my job situation has changed and I can no longer afford it. I did not sign anything to reaffirm the debt. So the question is can I hand the car over to the secured creditor without further obligation ?
Hi Anonymous,
There have been some court cases where it was decided that continuing payments after the date of bankruptcy effectively reaffirms the debt - it is a positive action taken on the part of the bankrupt indicating that they wish to continue. Given this, I always recommend to people that file bankruptcy with me that they seriously consider whether they can afford a car payment going forward. If there is any doubt, it's best to cease payments and allow the car to be taken and sold by the secured creditor (on approval of the Trustee). Any shortfall is then included in the bankruptcy.
In spite of the foregoing, I have seen cases where a bankrupt person has continued payments after the date of bankruptcy, then stopped, and the creditor has not pursued the person for the shortfall, choosing instead to file a claim in the bankruptcy. As I said earlier however, given decided cse law, this outcome is not guaranteed.
Sorry to not have better news on this issue.
Best wishes,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
www.mnpdebt.ca
How do I become an unsecured creditor and what forms do I require??
September 29, 2010 2:13 PM
John said...
How do I become an unsecured creditor and what forms do I require??
Hi John,
If a bankrupt person owed you money as of the day they filed bankruptcy, you are by definition a creditor. If you don't hold security against something they own (i.e. a registered mortgage or lien), then you are an 'unsecured' creditor. In order for you to share in whatever money the Trustee recovers for the creditors, you must send to the Trustee a completed 'Proof of Claim' form with documentation attached that shows your claim is valid. Trustees generally send this form to creditors as part of a 'creditors package' which also contains the key bankruptcy documents signed by the bankrupt person. If you haven't received a creditors' package, give the Trustee a call and request one.
Hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
mnpdebt.ca
THIS RESPONSE WAS ORIGINALLY POSTED ON SEPTEMBER 25 - BUT WAS NOT SAVE BY THE SITE FOR SOME REASON
September 24, 2010 1:14 PM Anonymous said...
Hello. I owe approximatly 15,000 including (10,000 in Credit Card Debt and 5000 Line of Credit at TD). I live with my parents and have no assets just a car I don't drive anymore with a total value of 600.00. I am in school and my total income is 1350 /month. I was wondering if bankrupcy would affect my parents at all.
Hi Anonymous,
If your parents co-signed either of those debts, then they would be left to pay them if you filed bankruptcy. Based on Ontario law, the car you mention would be an exempt asset in bankruptcy (not taken from you) assuming its registered to you. If it's registered to your parents, then it is a non-issue. Bankruptcy law sometimes requires that the income and expenses of all the members of a household be taken into account to determine whether there is 'surplus income' that should be used to pay creditors. If you are essentially independent, pay them rent etc. but do not generally benefit from their income or share their expenses, then you would be considered a single individual and again, there would be no impact on them if you filed bankruptcy.
I would encourage you to attend a free consultation with one of our Trustees to look at all the details of your situation and determine your best course of action.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
www.mnpdebt.ca
Hello,
I filed for bankruptcy 8 years ago, and recently asked for advice from a bankruptcy agent regarding a second bankruptcy. She did a search, which says that the first bankruptcy was never discharged - what do I do now?
November 5, 2010 3:19 PM Anonymous said...
Hello,
I filed for bankruptcy 8 years ago, and recently asked for advice from a bankruptcy agent regarding a second bankruptcy. She did a search, which says that the first bankruptcy was never discharged - what do I do now?
Hi Anonymous,
You are not permitted by law to file a second bankruptcy if you have not been discharged from your first bankruptcy. Presumably there are some duties that you did not complete in your first bankruptcy (e.g. payment of fees, attending counselling sessions, providing proof of income & expenses, etc.) You will have to go back to the Trustee firm which filed your first bankruptcy to determine what issues are outstanding - and get those completed so that you can get a discharge from your first bankruptcy. Don't be surprised if there is some kind of file reopening fee in addition to any amounts you may have to pay that were outstanding 8 years ago.
Hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
mnpdebt.ca
Hi,
I declared bankruptcy and was discharged in May 2007 for my non-student loan debt. I still owe approximately $47000 in student loans, and I’ve been contacted by a collections agency to arrange payments. They would like 3% of the balance, which I can’t pay, so they’re sending me a financial assessment to complete.
My question is, can you do a credit proposal if you’ve declared bankruptcy? The collection agent mentioned options such as offering a lump sum payout that would be less than my debt, but I don’t have money like that available to me. I’m wondering if a proposal would be an option for me to offer payments for a shorter period of time than the 10+ years I think it will take me to pay off this debt.
Note: I’ve been out of school since 2001 (the new bankruptcy rules didn’t go into place until after I had declared and been discharged).
Thanks!
Hi, I am about to sell my home to my father for full list price ... I owe him 20,000 and will be paying him back at the time of sale. I have large credit card debt of about 70,000. I will be distributing the 10,000 that I have left from the sale, to my creditors. My question is this .. is there a time period in which I would not be able to do a consolidation or bankruptcy after the sale of my home? The home will be purchased by him at full value ... no deals or shadiness, all of the money made, above my mortgage, will be paid either to the debt with him, or creditors. In the future he will rent the home to me, unless I find I cannot afford it. Thank you for your attention.
November 8, 2010 7:33 PM
Anonymous said...
Hi,
I declared bankruptcy and was discharged in May 2007 for my non-student loan debt. I still owe approximately $47000 in student loans, and I’ve been contacted by a collections agency to arrange payments. They would like 3% of the balance, which I can’t pay, so they’re sending me a financial assessment to complete.
My question is, can you do a credit proposal if you’ve declared bankruptcy? The collection agent mentioned options such as offering a lump sum payout that would be less than my debt, but I don’t have money like that available to me. I’m wondering if a proposal would be an option for me to offer payments for a shorter period of time than the 10+ years I think it will take me to pay off this debt.
Note: I’ve been out of school since 2001 (the new bankruptcy rules didn’t go into place until after I had declared and been discharged).
Thanks!
Hi Anonymous,
Sorry for the tardy reply - somehow I missed seeing the alert of your post come into my e-mail.
In principle, since the student loan was non-dischargeable in your bankruptcy, it should be possible to make a proposal on it now that it IS dischargeable. In my view, it would be tehnically no different than resigning new terms on a car loan after bankruptcy but then finding you couldn't pay the loan and having a shortfall debt. This is definitely new territory given the changes to the legislation.
Thanks for the interesting question!
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
mnpdebt.ca
November 18, 2010 11:41 AM
Anonymous said...
Hi, I am about to sell my home to my father for full list price ... I owe him 20,000 and will be paying him back at the time of sale. I have large credit card debt of about 70,000. I will be distributing the 10,000 that I have left from the sale, to my creditors. My question is this .. is there a time period in which I would not be able to do a consolidation or bankruptcy after the sale of my home? The home will be purchased by him at full value ... no deals or shadiness, all of the money made, above my mortgage, will be paid either to the debt with him, or creditors. In the future he will rent the home to me, unless I find I cannot afford it. Thank you for your attention.
Hi Anonymous,
If, as you have said, you are selling your home to your father at 'fair market value' (what you would expect to receive for it by selling it to a complete stranger using regular sale processes), and you can document that (i.e. appraisal of property at time of sale, final statement of receipts and disbursements from lawyer showing how much money was received and how it was distributed, transfer documents, etc.), there will be no concerns about the sale in a subsequent bankruptcy (regardless of how soon you file bankruptcy). The greater concern has to do with what you actually do with the proceeds of the sale. Canadian bankruptcy law contains the concept of a 'preference' payment to a creditor. If you favour one creditor over another (particularly a related person)the Trustee in your bankruptcy may be required to have the transaction reversed and the money brought into the bankruptcy for general distribution to creditors. A preference is automatically assumed to have occurred if the payment is made to a related party within one year preceding the time a person files bankruptcy.
In order to avoid any pitfalls in this process, I would recommend that you consult with a Trustee who can review your entire situation. Please note that we offer a free initial consultation. Please refer to our website at mnpdebt.ca for a location near you.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
mnpdebt.ca
Thank you Wes, your comments are so very appreciated. Thank you for your time, attention and consideration :)
I have recieved a large settlement from being given Hepatitis C through a blood transfusion. That money is non-punishable by taxes. I met with a credit counselor to discuss the debt i have and was advised that i need to find out if a Hep C settlement is safe from creditors or if that is considered touchable money and they can demand their full payments from me.
I posted this a few weeks ago but never got a response so i thought id try again.
I have recieved a large settlement from being given Hepatitis C through a blood transfusion. That money is non-punishable by taxes. I met with a credit counselor to discuss the debt i have and was advised that i need to find out if a Hep C settlement is safe from creditors or if that is considered touchable money and they can demand their full payments from me
Hi,
We are thinking about filing for bankruptcy but have a couple of questions in mind.
1. We have a leased vehicle that has one more year of lease on it. Will we lose that?
2. We have rented a house. Is it affected?
Thanks in advance.
January 6, 2011 4:53 AM
Ontario Bankruptcy said...
Hi,
We are thinking about filing for bankruptcy but have a couple of questions in mind.
1. We have a leased vehicle that has one more year of lease on it. Will we lose that?
2. We have rented a house. Is it affected?
Thanks in advance.
Hi Ontario Bankruptcy,
As long as your payments are up to date on the car lease and your house rent (or you have an agreement with either lessor to get caught up), generally speaking neither of these things will be affected by a bankruptcy - because you don't own either one yourself.
In fact, continuation and completion of the car lease through/after bankruptcy will actually have a positive impact on your credit rating.
I hope you find this reassuring.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
mnpdebt.ca
Hi there.
Thank you for all the great answers you post here.
I have about 40-50,000 in credit card debt, about 10,000 owed to CCRA in income tax, and about 4,000 in student loans older than 7 years.
I don't live in Canada anymore and the only assets I have there are about 5000 in RRSPs that have been locked by CCRA.
I'd like to file bankruptcy in case I ever want to come back to live in Canada.
What are your suggestions? Can I file while living abroad?
Thanks.
-Anon
Is it necessary that you currently reside in Ontario in order to declare bankruptcy in Ontario? I now live outside the country and don't know when I will be able to return but I would like to deal with my financial situation before I do. Is this possible?
Anonymous said...
Hi there.
Thank you for all the great answers you post here.
I have about 40-50,000 in credit card debt, about 10,000 owed to CCRA in income tax, and about 4,000 in student loans older than 7 years.
I don't live in Canada anymore and the only assets I have there are about 5000 in RRSPs that have been locked by CCRA.
I'd like to file bankruptcy in case I ever want to come back to live in Canada.
What are your suggestions? Can I file while living abroad?
Thanks.
-Anon
Hi Anonymous,
In theory, you can file a bankruptcy in Canada while living abroad. The bankruptcy would be filed in the area where you had most of your financial dealings or where most of your Canadian assets still exist. That said, any income or assets you have outside of Canada would also have to be considered in the process.
Practically speaking, there are a number of times/reasons why you might have to be present or be able to make yourself present during the process. If that's going to be a problem, then it may not be possible to file bankruptcy until you actually return to Canada.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
mnpdebt.ca
January 18, 2011 8:06 PM
Anonymous said...
Is it necessary that you currently reside in Ontario in order to declare bankruptcy in Ontario? I now live outside the country and don't know when I will be able to return but I would like to deal with my financial situation before I do. Is this possible?
Hi Anonymous,
Please see my last post. If Ontario was where most of your financial dealings occurred or where most of your remaining assets exist, then that is the province in which your bankruptcy would be filed.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
mnpdebt.ca
I declared bankruptcy and have been discharged since september. I am hoping to go back to school. can i get OSAP??? what should my next move be? thank you, lisa
February 6, 2011 11:56 AM Anonymous said...
I declared bankruptcy and have been discharged since september. I am hoping to go back to school. can i get OSAP??? what should my next move be? thank you, lisa
Hi Lisa,
In my experience, applying to OSAP is definitely worth a try. I have known recent bankrupts who were successful in receiving OSAP loans. Regarding general credit rebuilding, consider obtaining a secured credit card (the card company holds a cash deposit you make at the beginning as security against any future purchases on the card). To any vendor, the MasterCard or Visa looks like a regular credit card - and it works the same way as well - you put charges on it and pay them when the bill comes in the next month. Each time you go through this cycle, the card company reports to the credit bureau(s) that you have a good rating with respect to that card. In time, this improves your credit score - which will help you to get other kinds of financing.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
mnpdebt.ca
am trying to figure out if bankruptcy is an option for me.
I am a professional and have been unemployed for several years. Savings are long gone and I'm living off help from family.
Financial summary
help from family = $3000/mo
(at their discretion)
living expenses approx $4000/mo
debts = $32000
(credit cards/lines of credit)
I have virtually no liquid assets and am well within the Ontario asset exemption limits.
I am current at present with all my creditors, but obviously the situation is a "house of cards".
The only other salient point is I will receive a significant inheritance upon death of both my parents, not likely for another 10 years or so.
Is bankruptcy a viable option to clear my debts in absence of finding a job in the near future (I have been looking for over 2 years).
Thanks
George
Hi, I have a few questions. My husband and I are considering bankruptcy as we have accumulated several debts, including student loans (which are more than 7 yrs old), credit cards, and other smaller non-secured debts. Much to our embarassment, we have also ended up in the vicious and unforgiving web of "payday loan" services. 3 seperate ones to be exact, each totalling over $1200. It all began by using one at first to help out with an unforseen expense and we had EVERY intention of paying it off within the time frame, but then one thing led to the next and the next and then before we knew it we're using a second service to help us pay off the first!! And then more bad luck came our way and a third was used to borrow from "Peter" to pay "Paul", etc. This has been going on for several months now and trying to break the cycle without coming in to a large chunk of cash is almost impossible!!
So my 1st question is...Would these "payday" loan debts also be absolved in the bankruptcy process?
My 2nd question pertains to unsecured debts. If we had old debts, which are no longer visible on our credit report, are we still required to report such debts to the Trustee we seek out? Even if we have received no correspondence from these creditors in years and they are no longer visible on our credit reports? And my 3rd question is about benefits/funding received in my name for our children. I already read on here that the CCTB can not be affected by the bankruptcy process, although I am required to report it. But what about The Child Disability Benefit which I receive for 2 of my children who are diagnosed with Autism, as well as the provincial funding I receive for them, Assistance for Children with Severe Disabilities (ACSD) and Special Services at Home (SSAH)? I would assume that because these funds are directly due to their disabilities that they would not be affected as well? The ACSD is a monthly payment that is directly deposited into our joint chequing account and the SSAH is an invoice/reimbursement system.
I would greatly appreciate any information you could provide me with before we proceed with a consultation.
Thank you!
I currently have an outstanding Osap loan. I filed bankruptcy in July 2004 and it was not included because according to the Trustee Manku and Associates it was less than 10 yrs old. (9yrs and 4 months old to be exact). Now every year my there`s a lien on my taxes. I made payments arrangements with the collection company to have the lien remove. They cashed my money and the lien remains the same...on my taxes....Is there anything I can do?
February 23, 2011 1:19 PM Anonymous said...
I am trying to figure out if bankruptcy is an option for me.
I am a professional and have been unemployed for several years. Savings are long gone and I'm living off help from family.
Financial summary
help from family = $3000/mo
(at their discretion)
living expenses approx $4000/mo
debts = $32000
(credit cards/lines of credit)
I have virtually no liquid assets and am well within the Ontario asset exemption limits.
I am current at present with all my creditors, but obviously the situation is a "house of cards".
The only other salient point is I will receive a significant inheritance upon death of both my parents, not likely for another 10 years or so.
Is bankruptcy a viable option to clear my debts in absence of finding a job in the near future (I have been looking for over 2 years).
Thanks
George
Hello George,
Apologies for the delay in my response - just back from a week off.
From the sounds of your situation, it certainly seems like bankruptcy would be a viable option for you. You are fortunate to have help from family - that has kept the issue at bay for a while. I would recommend that you speak to a licenced Trustee in Bankruptcy who will go over your situation in detail and confirm what your best option(s) is/are. At MNP, we offer a free, no obligation initial consultation. Visit our website at mnpdebt.ca to confirm/contact an office near you.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
February 24, 2011 3:59 AM
Stacey said...
Hi, I have a few questions. My husband and I are considering bankruptcy...
Hi Stacey,
As I mentioned to the last blogger, sorry for the delay -just back from a week off.
To answer your questions in turn. First, yes, payday loan debts are effectively no different than any other unsecured debt - they are generally stopped/eliminated as part of a bankruptcy or consumer proposal process.
Regarding old debts, I always recommend listing/notifying every creditor a person thinks might have a claim against them, as part of the bankruptcy or consumer propsal process. That avoids the possibility of any creditor trying to collect after the fact - it's fair to them as well - they won't waste valuable time and expense trying to collect a debt that is uncollectible. That said, if a creditor is unintentionally overlooked and not listed/notified, the bankruptcy or proposal process has the same effect on them - they are prevented from collecting after the fact.
Finally, regarding the supplementary income for your children. You are correct that when a person files bankruptcy, unlike income tax refunds and GST credits, CCTB and UCCC are sent uninterrupted to the recipient for the children. The amounts are considered to form part of household income however, as would any other supplementary payments for the children. In a bankruptcy scenario, there are certain income thresholds set by the government regarding net household income. Once over those thresholds, a person in bankruptcy may be required to pay additional money into the bankruptcy for their creditors. Medical expenses/ required therapies for the children would be an allowable deduction from income however, so the impact of the additional payments may not be significant.
I would recommend that you speak with a licenced Trustee in Bankruptcy to clarify the effect a bankruptcy would have on your income and assets. At MNP, we offer a free, no obligation consultation to determine these things. Feel free to visit our site at mnpdebt.ca to locate/contact an office near you.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
February 28, 2011 6:39 PM
jaQe said...
I currently have an outstanding Osap loan. I filed bankruptcy in July 2004 and it was not included because according to the Trustee Manku and Associates it was less than 10 yrs old. (9yrs and 4 months old to be exact). Now every year my there`s a lien on my taxes. I made payments arrangements with the collection company to have the lien remove. They cashed my money and the lien remains the same...on my taxes....Is there anything I can do?
Hi jaQe,
When you filed bankruptcy in 2004, the law did indicate that in order for a government student loan to be dischargable, at least 10 years must have passed since you were a full or part-time student in the educational program related to that loan. Assuming that it had in fact been 9 years and 4 months since that time, I'm surprised the Trustee didn't caution you that it would not be discharged if you filed bankrutpcy. Of course, your situation at the time may not have allowed you to wait another 8 months or so to file the bankruptcy and have it included.
Within the last couple of years or so, the law has been changed to reduce the time to 7 years.
Regarding the 'offset' on your tax refunds, in my experience, the government will not remove it until the entire loan balance is paid. As far as they are concerned, it is found money. The only way of getting it off for sure would be to file another bankruptcy - which presumably you don't want/need to do.
Sorry to not have a better solution at this point.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
March 3, 2011 4:18 PM
Anonymous said...
My wife and I are seniors. Our only source of income is from the government (OAS CPP)totaling $2493 per month. We have no assets. We rent. Our retirement package is a combined debt equal to three times our annual income. All our bills are current but the well is dry. As of March 30 we have no funds to service our debts. We were discharged from bankruptcy 20 years ago which was so punative that we never managed to make ends meet. We see no alternative but to file again only this time we will actualy have an income which will allow us to live with some dignity.
Included in the above mentioned figure is a government allowance (social assistance) paid to my wife to bring us up to the minimum standard set by the federal government.
Are government pensions and social assistance payments subject to surplus income. If yes then we would have to pay out $74 monthly. On top of this we must cobble together $100 monthly to pay the $2000 bankruptcy fee. This is to be paid over 18 months.
If we must pay surplus income do we pay it for the first 18 months or for the 24 months duration of our second bankruptcy.
This is a very informative site. Thank you.
Ont. Pensioner
Dear Ont. Pensioner,
Bankruptcy law in Canada has certainly changed a lot in the last 20 years. It sounds like you have done your homework. Yes, under the current laws, a second time bankrupt person must remain in bankruptcy for a minimum of 24 months. If their net monthly income consistently surpasses a government-set threshold (based on the number of people in the household) by more than $200 during that 24 months, they may be required to remain in bankruptcy for 36 months, and continue to make 'surplus income' payments into the bankruptcy.
In your case, as a family of two, the income threshold for 2010 (the 2011 figures should be released shortly)is $2,345. As you correctly calculated, you would be $148 over the threshold - 50% of that is actually payable to the bankruptcy, so technically your monthly surplus payment would be $74. However, in my experience (and in my practice), generally speaking, the bankrupt person pays either the surplus owing or the fee payment, whichever is higher (but not both). So, for example, if your fee payment is $100 per month, and your surplus that month is $74, you would only pay $100. The $74 is already part of the $100. I have heard of some Trustees requiring both the surplus payment and a full fee payment, but I beleive this is rare, and may only apply under specific circumstances.
As is my usual caution, my comments are based on a very narrow set of facts as presented. MNP offers a free initial consultation where all the details of a person's circumstances can be explored and the options and outcomes considered. We encourage anyone contemplating bankruptcy to contact us for further information.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
i filed bankruptcy in 2006 and my father passed away and left me an inheritance..the money was tied up and i did not receive the check nor cash it until after my discharge..now the bankruptcy firm is suing me and my brother..who was the executor of the will...what should or can i do..i am wits end not knowing what to do...do i need a lawyer or where can i get advice or what is it i need to do...
I have a car worth $6,000.00 that I own outright. Will I be able to keep it if I file bankruptcy?
Hi,
I am involved in a law suit with a defendant. A judgment has been rendered in my favour but the defendant never came to court no replied to the claim. She was however personally served at a home address. After searching the property through the Land Registry, I found out that before I even filed the claim she filed bankruptcy and lost her house through a power of sale. My question is, how can I, as a creditor essentially, find out information about her bankruptcy? And can I contact the trustee that settled dealt with this person to see what kind of assets, if any, she might still have in her possession that I can place a lien on? Any advice you can give me would be great.
I was hospitalized in 2008 and diagnosed with severe bipolar disorder. During a manic episode in 2006 and again in 2008 I racked up approx. $90,000 in credit card debt and $50,000 in debts to friends/family. I have been unemployed due to my illness since 2006. As you can imagine I have many creditors phoning, sending notices and threatening court proceedings.
I applied for ODSP in the fall of 2010 but did not qualify financially as I owned the house I lived in ( a duplex - rental income paid most of the bills - remainder paid by my uncle who shares the apartment with me and supports me). I am currently in the process of selling my home. I will end up with $45,000 after the sale. I would like to pay back some of my family/friends to the tune of about $25,000 which would leave me about $20,000 to live on for a year or so at which time I would re-apply for ODSP. Given I have no other income and none in the forseeable future due to my disability can I keep the remaining $20,000 to live on until I can get on disability (ODSP)? Can creditors go after the $45,000? If I go bankrupt do I have to surrender any of the $45,000 to the trustee and/or creditors? Should I go bankrupt?
Thanks for your help.
DUE TO SOME BLOG SITE PROBLEMS, MY RESPONSES TO YOUR QUESTIONS WERE NOT POSTING AS THEY SHOULD HAVE. WE BELIEVE THE PROBLEM HAS BEEN SOLVED. APOLOGIES FOR ANY INVCONVENIENCE.
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
Inheritance Question - March 6, 2011
Dear Anonymous,
Any money which you are owed at the time you file bankrupcy (or becomes owed to you before you are discharged) is considered an asset of the bankruptcy estate. I assume that if you advised your Trustee of the pending inheritance money s/he would have told you that as well. Normally in these cases the Trustee sends a letter to the Executor advising them of the Trustee's right to any money that becomes payable to the bankrupt person. The obligation to pay is not ended by the bankrupt person's discharge. Based on what you have said, it sounds like the Trustee is doing what he or she should.
While you may choose to retain legal counsel, I think you are likely to find that the Trustee is acting appropriately and responsibly pursuant to the Bankruptcy and Insolvency Act
The reality of the situation is: if you had received the inheritance money before you filed bankruptcy, you probably would have used it to pay down debt. Your creditors would have benefited from it then - why not now?
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
Can I Keep My Car? - March 15, 2011
Exah province in Canada sets descriptions and thresholds for what qualifies as an 'exempt' asset in bankruptcy - that is - something you are allowed to keep in spite of the bankruptcy.
In Ontario, a bankrupt person is allowed to keep a car which has a value not exceeding $5,650. It should be noted that this value is considered to be the 'un-liened' value. For example, if you have a car worth 10,000 but the bank has a lien against it for $6,000 for the car loan, the value to you is only $4,000, so this car aould be exempt in bankruptcy (whether you actually get to keep it will depend on making the car loan payments, but the bankruptcy does not affect it.
In the case of a car owned outright valued at $6,000, there is $350 that is not exempt. In a case like this, the Trustee will usually collect the $350 from the bankrupt person rather than sell the vehicle (which is usually the person's preference as well.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
Law Suit Against Bankrupt Defendant - March 15, 2011
Hi Anonymous,
Please see the Superintendent of Bankruptcy's website at:
http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br01991.html
For a nominal fee, you can do a search of the person you were suing to confirm when they went bankrupt and the name and the address of the Trustee. You may be eligible to file a claim with the Trustee for the amount you are owed.
However, please note that, generally speaking, the filing of a bankruptcy prevents any further legal action against the bankrupt person on debts they incurred prior to the date of bankruptcy. As such, it is unlikely you will be allowed to lien assets after the date of bankruptcy.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
Trustee...I have been told i am creditor and judgement proof because i have nothing and get the old age pension i should do nothing. You cant get blood out of a stone. If the credit card people want to take me to court or take my bank account do they let me know first or will they go ahead & tell me later? Korean vet.
Creditor & Judgment Proof - March 20, 2011
Dear Korean Vet,
Yes, the term 'judgment proof' applies to debtors who have effectively no assets and receive income from sources that are non-garnisheeable (e.g. most government pensions, Employment Insurance, Social Assistance, Disability income, etc.)
This does not mean that a creditor cannot sue you for the amount owed, but rather that upon obtaining a judgment against you from the court, there is little they can do with it - as there are no assets to seize or income to garnishee.
A creditor must serve you notice of their intention to sue you - so any action they may take will not be a surprise. A notable exception is Canada Revenue Agency which is not required to get a court order before garnishment - however, they are required to give legal warning either verbally or in writing (and usually provide both).
As an aside, a creditor who gets a judgment against you and knows your only income comes from a non-garnisheeable source will usually not be so brash as to try to seize the bank account those funds have been deposited into. Sometimes in such cases, the court has required the creditor to return the funds.
Some folks who are 'judgment proof' still seek debt relief through bankruptcy - if only to end stressful calls and letters.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
Mr Cowan...thanks for the info about my bank account which is usualy empty. i suppose i should go to court if they sue me. i will wear my medals and get a white stick (haha)...like the bank would care. as i said before you cant get blood out of a stone.
My daughter read that there is a limition law on debt that after 2 years if it cant be collected as you said then the debt dies? Can the bank go back to court in 2 years for another go at me? much appreciated. Vet
Limitation on Collectibility of Debt - March 21, 2011
Dear Vet,
I appreciate your humour in spite of your situation!
Your daughter is correct - the Limitation Act does indicate that a creditor must take positive steps (read: sue) within two years of a demand being made for payment, otherwise they lose their right to legally enforce collection. However, if they get a judgment within the two years, they may continue collection beyond that. It's interesting to note that the Limitation Act formerly indicated that creditors had up to 6 years to enforce collection - until it was changed a couple of years ago.
In your case, your creditors may attempt to get a judgment within the two years, but as I discussed in my last blog, it may not be of any practical use to them if you are in fact 'judgment proof'
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
the house was bought during marriage, but is in my name only, do i need agreement from my ex-wife in order to go bankrupt?
I have a secured car loan financed with a bank. I also have an unsecured line of credit (less than $4500) with the same bank. I have put off bankruptcy because there is a DEFAULT clause in my car loan document. It says the loan is due in full if I file for bankruptcy or I am forced into bankruptcy.
If I file for bankruptcy and include my unsecured line in my list of creditors but continue to make my car loan payments can the bank call the car loan? During my initial meeting with a trustee I was told that Ontario legislation says that if all contract payments are made in full that the creditor (bank) cannot end the agreement. Is this your understanding?
Bankruptcy would solve 99%f of my financial problems but if I lost my car I would be out of a job and out of luck.
An employee who has claimed bankruptcy. We pay on a weekly basis and he has asked if we can pay him once every couple of months since his money is being taken from his account.
Are we legally obligated to pay weekly?
We have received nothing to request garnishments.
March 23, 2011 - House Concern
Hi Anonymous,
You do not need your ex-spouses' permission to file bankruptcy, in spite of the house. However, how the equity (if any) in the house is dealt with will depend on a number of factors. This would be your Trustee's concern once you filed.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
March 24, 2011 - 'Bankruptcy' as Default Provision in Car Loan
Hi Anonymous,
The Trustee you spoke with is correct. Specifically, as a result of changes to the federal Bankruptcy and Insolvency Act ("BIA") on September 18, 2009, a contract cannot be terminated solely on the basis that you filed a bankruptcy or a consumer proposal (BIA s. 65.1 and s. 84.2)
Hope this provides you with some reassurance.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
March 24, 2011 - Obligation to Pay Employee Weekly?
Hi Anonymous,
As a general comment about frequency of payroll payments, that's generally left to agreement between the employee and employer
This is certainly mysterious however. If your employee has in fact filed bankruptcy, then no creditor has the right to garnishee him/her any more. However, s/he must report his/her earnings to the Trustee monthly. There are certain government-set income thresholds that may require the bankrupt to pay additional monies to the bankruptcy for the creditors.
I think you need to clarify exactly why your employee is trying to manipulate the timing of his/her earnings. It may be a way of avoiding duties under the law, with which of course, you should not assist.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
In the year 2001 I had to quit collage due to unexpected incidents. I was getting OSAP at the time to pay for my education. Unfortunately, after these incedents, I was left homeless. Finally after a year, I was able to get a job with minimum wage. I could barely pay rent and feed myself let alone pay osap back. My only choice at that time was to default. The loan is now in a collection agency. I still have a lot of financial issues and can't pay the amount they are asking for. Is there a way to consolidate this loan without going through OSAP or the collection agency? Do I have any rights as a low income family?
I got married 5 years ago and my wife also has an OSAP loan. she's making minimum payments for the past 10 years! She still has a long way to go. The loan itself is not that much, but because the interest rate is high and we can only pay the minimum, it's taking us so long. We cannot afford to pay for two loans on our current income. What should we do?
I just filed for a consumer purposal and paying 200/month over 5 years. I have no assets to protect. I just got employed and will be making 2500 (net/takehome)a month and want to file for bankruptcy. Would I qualify for the 9 month discharge at the cost of 1800 (bankruptcy fee) with these new earnings? Or would I have have access earnings and have to be in bankruptcy for 21 months? I am worried about nt being bondable for the period while in bankrupt as I could potentially become unemployed and wouldn't want this to impede my ability to obtain a new job if need be.
Thanks for your help
Student Loan Struggles April 4, 2011 11:46 AM
Hi Anonymous,
Boy, my blogging sure slows down during tax season! It's such a busy time.
It sounds like you and your wife are really struggling with your student loans. Generally speaking, the student loan bodies are sensitive to people with financial problems and will generally work with you - sometimes by adjusting the interest or payments to help make things more managable.
Where that's still not enough you may need to look at a formal process like a proposal or bankruptcy to relieve you of the debt. Student loan debt can be discharged if it has been at least 7 years since you were enrolled in the program to which the loan pertains.
I would recommend that you both consult with a Trustee to review your options. At MNP, we offer a free initial consultation. You can locate the office nearest to you on our website - mnpdebt.ca Feel free to contact that office for an appointment.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
Proposal vs. Bankruptcy - April 7, 2011 12:58 PM
Hi Anonymous,
So if I understand correctly, you have already filed a consumer proposal and are paying $200 per month...but your finances have recently improved having gotten a job that pays you about $2,500 per month?
I'm at a loss to understand why you would want to abandon the proposal and file a bankruptcy. Bankruptcy is harder on your credit rating (for longer), and can affect future employment opportunities.
Further, assuming you are a single person, if you file bankruptcy, you would be required to pay half of any income over the government-set monthly net-income threshold of $1,926 into the bankruptcy (i.e. $287 per month in your case) for 21 months (if you have 'surplus income' exceeding $100 on average per month, you are no longer eligible for a 9 month bankruptcy - you must stay in for 21 months)
In your case, as I understand it, the proposal would cost you less per month and quite frankly is the more responsible route to take - your creditors will benefit more in the long run.
I hope this helps.
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
I owe student loan. both federal and provincial that I cannot pay. I am on disability. I was told to file for an absolute order of discharge. How do I go about doing this. My last loan was 1998 and my last time in school was 1998. I filed for bankruptcy in 1998 Dec but the loans could not be included due to the law then. Thanks
RE: Student Loans and Disability - April 27, 2011
Hi Anonymous,
Sorry to hear about yuor situation. Did you get a discharge from your 1998 bankruptcy? That someone is advising that you get an absolute discharge suggests that you were not discharged from the 1998 bankruptcy. However, even if that is the case, getting an absolute discharge from that bankruptcy now will still not discharge the student loan debt as it was undischargable debt at the time the bankruptcy was filed. Providing that you are discharged from the 1998 bankruptcy, you may choose to file another bankruptcy now to discharge the student loan debt - which is now old enough to qualify for discharge.
I hope this helps.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Limited - mnpdebt.ca
I live in Ontario and would like to know if I claim bankruptcy is ODSP erased or will ODSP go after my husband and the house (house is in his name only).
RE: May 29, 2011 - ODSP debt
Hi Anonymous,
ODSP overpayments (like EI or Social Assistance overpayments) often result from the recipient failing to disclose income or other information to the government, resulting in the overpayment. This is often viewed as a form of fraud, and the government has taken the position that the debt should be excluded from a bankruptcy under Section 178 of the Bankruptcy and Insolvency Act. While ODSP is unlikely to pursue your husband or his assets to recover the money (unless you gave away your assets to him in an attempt to prevent ODSP from getting them) you may find that you will come out of bankruptcy still owing the ODSP debt for the reasons mentioned above. As an aside, if you did in fact transfer anything you owned to your husband to prevent your creditors from getting it, the Bankruptcy Trustee will have an obligation to reverse that trasaction and bring those assets back into the bankruptcy.
I hope this information helps.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
Meyers Norris Penny Limited
Can I sell my house after I get my discharge? Is there a waiting period?
I first started having money problems in 2006 when a business failed. In 2009 I received a settlement of $32K. I used the money to pay taxes, legal fees and living expenses. I am now considering either filing bankruptcy or making a consumer proposal. Do I need to let the trustee know that I received this money in 2009?
June 9, 2011 RE Selling My House
Hi Anonymous,
Technically speaking, you should actually wait until your Trustee is discharged as well. In the event that you receive funds from the sale, the Trustee may be obliged to take them as assets of the bankruptcy estate (the house existed and was an asset at the time of bankruptcy). There are some exceptions of course, and so you are best to discuss this with your Trustee.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd - mnpdebt.ca
June 13, 2011 - Settlement
Hi Anonymous,
One of the (sworn under oath) questions on the bakruptcy documents asks whether you `sold or disposed of any assets within the last 5 years` The cash was an asset, and you disposed of it. So yes, you are obliged to disclose that you received it and provide the Trustee with a detailed breakdown of how it was spent.
Hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd - mnpdebt.ca
I just purchased a house in Ottawa. i have been doing the regular payments with no problem and I will be able to continuing doing them. My question is because a have a house in another province (ab) with somebody else who supposed to being paying the mortgage but it haven't now I am going for foreclosure and i do not have money to pay. So i am considering bankrupsy in Alberta ,but what will happen or how this will affect my house in Ottawa where I actually live with my family?
I am in a bankruptcy situation for another 7 months. Recently got a settlement for past years work prior to filing for bankruptcy.Can these funds be transferred directly into a RRSP. I have not contributed for years so there is room. I would file a direct transfer T2033
After filing for bankruptcy, how long does it take CRA to process a post-bankruptcy return?
can my ex boyfriend file for bankruptcy if his name still appears on my mortgage and i am not filing?
June 22, 2011 2:30 PM - Put Work Settlement in RRSP?
Hi Anonymous,
Beacause you received the amount while you are in bankruptcy, it will be viewed by your Trustee as either income or an asset, depending on the particulars. If it is viewed as income, then it will be subject to the surplus income calculation rules - which may mean that up to 50% of it has to be paid into the bankruptcy for your creditors. You may be able to put what's left into an RRSP. If the circumstances warrant that the amount be viewed as an asset, then the entire amount will have to be paid into the bankruptcy, and there would be nothing left to go to an RRSP. You are obliged to report receipt of the amount to your Trustee and s/he will determine what must happen to it. Since the amount will show up on your tax slips, your Trustee will find out about it, so don't try to hide it! The reality is that had you received that income back when you should have received it, you most likely would have used some or all of it to pay down your debts. So your creditors still have a right to benefit from it.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
June 22, 2011 3:09 PM - CRA (Revenue Canada) and Post-Bankruptcy Tax Returns
Hi Anonymous,
A Post-Bankruptcy Tax Return is a tax return that is filed for part of the year of bankruptcy - from the day the bankruptcy was filed to the end of that year (December 31st). It is required to be filed by the normal due dates for individual tax returns - June 15th of the following year for self-employed people; April 30th for everyone else. Because it is a 'split-year' return, it cannot be processed by CRA's normal processing channels. There is a special group in each Tax Centre (e.g. Summerside PEI, Sudbury ON, Winnipeg MB etc.) that manually assesses these returns. Since they are done manually and by a relatively small goup of people, it takes quite a while for them to be completed. It is not uncommon for a post-bankruptcy return filed on or before the April 30th deadline to not be assessed until August. Depending on internal factors at CRA, sometimes it takes even longer.
I hope that answers your question.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
June 22, 2011 6:08 PM - Bankrupt Ex-Boyfriend Still on Mortgage
Hi Anonymous,
Yes, your ex-boyfriend can file a bankruptcy even though he is joint on your mortgage. It will, in principle, remove him from the mortgage (although the mortgage company may not actually delete his name from it right away) As long as your morttgage payments are up to date, his bankruyptcy will have no immediate effect on the mortgage or your home. When it comes time to renew the mortgage, it may have an effect on whether you qualify for a mortgage on your own and on what terms. The other consideration is whether your ex is also a co-owner of the house. In that case, his Trustee will step into his shoes, and will have to determine whether his half-ownership has any value (e.g. whether you would get any money in hand if you sold it - after real estate and legal costs). If so, you may be required to buy your ex's half share from the Trustee in order for the Trustee to transfer full ownership to you.
I hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
June 16, 2011 1:23 PM - Houses in Different Provinces
Hi Anonymous,
The Bankruptcy and Insolvency Act (BIA) is federal (cross-Canada) legislation and requires that a person file bankruptcy in their 'locality' - which is most often defined as where they actually live. So in your case, if you are forced to file a bankruptcy, you would do so in Ottawa, and it would affect any debts or assets you have anywhere. Regarding your Ottawa home, as long as your mortgage payments are up to date, your mortgage company is unlikely to be concerned about your bankruptcy. As long as you continue to pay the mortgage, they are OK with you continuing to have the house. Now, your bankruptcy Trustee will have to look at the Ottawa house to see if there is any equity in it (i.e. whether you would receive any money in hand after selling costs if your were to sell it). If so, you will have to make arrangements to pay your share of that equity into the bankruptcy in order to keep the house.
I hope this helps.
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
Are you required to submit bank statements and receipts for all transactions during bankruptcy?
Are you required to submit bank statements and receipts for all transactions during bankruptcy?
Are you required to submit bank statements and receipts for all transactions during bankruptcy?
My survival strategy for the last year was to pay the minimum (and more if I could) on all my credit cards (which left me with no cash), then use the cards to pay for day to day expenses. I have just decided the only option for me is to file for bankruptcy protection - (after hoping a consolidated loan could be worked out - (not possible!). Will I be penalized for the use of the cards in the 3 months I used them before bankruptcy?
How long does it take from the time you submit all information and decide on bankruptcy until you are under bankruptcy protection?
How long does it take from the time you submit all information and decide on bankruptcy until you are under bankruptcy protection?
Can a trustee stipulate what you can and cannot spend your money on during bankruptcy as long as you can make your payments?
Can a trustee close down a bank account in your name on your behalf (to prevent deposits put in by mistake)?
June 29, 2011 12:03 PM - Bank Statements and Receipts During Bankruptcy
Hi inthedark,
During bankrutpcy, the Trustee is required to monitor your monthly income and expenses. What this usually means is that you must fill out an Income & Expense sheet every month - and attach proof of the numbers you have listed on it. At a minimum, you will be required to attach proof of your income (pay stubs, bank statements, etc.) and any deductible expenses which may reduce your net income (e.g. spousal/child support, child care expenses, medical expenses, and income tax installments, to name the most common ones)
The trustee may require you to submit receipts for other expenses as well, at his or her discretion. How well you budget your money is a topic of discussion during the two mandatory financial counselling sessions, and detail on how you spend your money is helpful to the person conducting that counselling sessions.
I hope this helps fill in the blanks a bit for you.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
June 29, 2011 12:12 PM - Use of Credit Cards Within 3 Months of Bankruptcy
Hi Anonymous,
There's no question that credit card transactions prior to bankruptcy are reviewed for abuse, and in particular within the 3 months preceding the filing of the bankruptcy. Relatively small and infrequent charges are generally not questioned. However, if the charges were individually or collectively large, then the creditor may take the position that that some portion of the debt should be excluded from the bankruptcy and that you should have to pay it back (because you ought to have known you couldn't - or weren't going to - pay the amounts back when you used the credit, which is considered a form of fraud).
If at all possible, it's best to avoid the use of all credit once you start considering a bankruptcy or consumer proposal as a necessary solution to your debt problems.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
June 29, 2011 12:13 PM How Long Does It Take To File A Bankruptcy?
Hi Again inthedark,
After you submit all the required information to the Trustee, the Turstee will prepare the legal documents, and arrange for you to return to the Trustee's office to sign them. This process usually happens fairly quickly - a few days at most. Once you sign the bankruptcy documents and pay any initial fee required, the Trustee will electronically file the bankruptcy with the Office of the Superintendent of Bankruptcy (Industry Canada) and it becomes legal and binding on creditors as soon as the Truste receives confirmation back that it has been accepted (usually this takes a few minutes at most). The Trustee is then required to send copies of the bankruptcy documents to all known creditors within 5 days of the filing of the bankruptcy. Upon reciept of the documents proving a bankruptcy has been filed, the creditors must cease any collection activity they are engaged in.
I hope this sheds some light on this process.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
June 29, 2011 12:14 PM Does the Trustee tell me how to spend my income when I am in bankruptcy?
Hi Anonymous,
Generally speaking, the Trustee will not tell you how to spend your income while you are in bankruptcy. However, the Trustee must collect 50% of any income above a government-set threshold based on the number of people in the household. For example, the 2011 threshold for a single individual is $1,926 per month ('net' take-home income). If you make $2,326 in a month, you would be $400 over the threshold, and would therefore have to pay $200 into the bankruptcy for your creditors. What you do with the remaining $2,126 is entirely up to you...
If you are contemplating bankruptcy, it's best to have your entire situation reviewed to see what the requirements on you would be. At MNP, we offer a free initial consultation to explore these questions. We welcome you to visit our website at mnpdebt.ca to locate an office near you and make an appointment.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
June 29, 2011 12:14 PM Does the Trustee tell me how to spend my income when I am in bankruptcy?
Hi Anonymous,
Generally speaking, the Trustee will not tell you how to spend your income while you are in bankruptcy. However, the Trustee must collect 50% of any income above a government-set threshold based on the number of people in the household. For example, the 2011 threshold for a single individual is $1,926 per month ('net' take-home income). If you make $2,326 in a month, you would be $400 over the threshold, and would therefore have to pay $200 into the bankruptcy for your creditors. What you do with the remaining $2,126 is entirely up to you...
If you are contemplating bankruptcy, it's best to have your entire situation reviewed to see what the requirements on you would be. At MNP, we offer a free initial consultation to explore these questions. We welcome you to visit our website at mnpdebt.ca to locate an office near you and make an appointment.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
June 29, 2011 12:16 PM Does a Trustee close down your bank account after bankruptcy?
Hi Anonymous,
Technically speaking, as the Trustee legally steps into your shoes, it's possible for a Trustee to request the closure of an account. However, I have never seen this in my experience. Frequently, upon bankruptcy the bank will close accounts with negative (overdraft) balances. In other cases, it is left to the bankrupt person to ensure that any direct deposits have been changed to an alternate account if desired. It should be noted that if a deposit is made after the bankruptcy and is off-set against a debt that was included in the bankruptcy, the Trustee can (and will) get it back for the bankrupt.
I hope this helps.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
I am currently involved in a lawsuit due to an accident. If I win a settlement is this money exempt under the bankrupcty laws in Ontario, or would I have to turn it over to a Trustee.
what happens to our home if my hsband files bankruptcy, the mortgage is in both names?
June 30, 2011 - Proceeds of Accident Lawsuit
Hi Anonymous,
Like a lot of things, the answer is 'it depends'. If the award is compensation for lost or damaged property, then it is an asset of the bankruptcy that the Trustee must take for the creditiors. If it is a wage replacement award, then it may be viewed as income, and 50% may have to be brought into the bankruptcy for the creditors. If it is an award for pain and suffering or loss of limb, then you may get to keep the amount in its entirety and none of it would come into the bankruptcy. What's important is that the court that awards the amount be specific as to the nature of the award so that there is no ambiguity as to how it should be treated in bankruptcy.
I hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
July 18, 2011 - What Happens to House/Mortgage if One Joint Owner Files Bankruptcy?
Hi Anonymous,
Generally speaking, if there is no realizable equity in the property (what you would get if you were to sell it after real estate and legal costs), nothing will change - assuming you keep up (and have been keeping up) the mortgage payments. You continue to keep the house and things continue along as though the bankruptcy had not happened. When the mortgage comes up for renewal, the lender may decide that it doesn't want/need your spouse to be on the mortgage; you may not get as favourable an interest rate due to the bankruptcy.
If there is realizable equity in the house, then your husband would be required to pay that amount into the bankruptcy (his half share) in order for you to keep the house. Generally speaking, he would be given time to make that payment, although the length of his bankruptcy may be extended until payment is made. In extreme cases, the Trustee is required to sell the property to recover the realizable equity, but that's only at times when the bankrupt or spouse is uncooperative.
I hope this helps,
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
Wow, what a great site..
Me and my wife just sold our house a month ago and we bought a new one.
The old house was registred on both of us.
The new one we registred only on her name.
My question is, If I file for the personal bankruptsy because of lots of tax money owed by my corporation, can the CRA put the lein on the house.Thank You
I filed bankruptcy in 2008, and was discharged in 2009, I rencently found out I didn't claim by child as a dependent in 2007 and had to re do my taxes. My trustee is telling me that the money would go to her and I am not entitled. I thought if I was discharged, I would be entitled, Can you please advise.
August 1, 2011 5:18 PM
Can CRA put a lien on our new house that's in my wife's name for my tax debts?
Hi Gabriel,
You indicated that your tax debt is due to your corporation. I assume that the debt is related to payroll deductions or GST/PST, because a director of a corporation is not personally liable for corporate income tax debts (normally).
If I understand correctly what happened here, you effectively gave away your share of the equity in your old house to your wife when you bought the new house (by titling the new house only in her name).
There are sections of the Income Tax Act and Excise Tax Act that allow CRA to pursue 'non-arms length' transfers of assets (cash etc.) and assess the recipient of those assets. So unfortunately, yes, it is possible for CRA to put a lien against your new house, even though it is in your wife's name - because from CRA's persepctive, you attempted to hide your assets (intead of paying the tax debt)by giving them away to your wife. The action would not be stopped by bankruptcy, because presumably only you would be filing a bankruptcy, not your wife.
A Bankruptcy Trustee would also be concerned about the transaction for the same reasons. CRA is a creditor, and it appears that money that could have been used to pay creditors has been put out of their reach.
Sorry to not have better news. I would recommend that you consult a Trustee to go over your entire situation and see what the possible options and outcomes are. Please note that MNP Ltd. offers a free initial consultation. Feel free to contact a location near you by checking mnpdebt.ca
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
August 2, 2011 11:20 AM
I filed bankruptcy in 2008...does a reassessment refund from my 2007 tax return go to my Bankruptcy Trustee even if I am discharged?
Hi Lillian,
All assets you have at the time of your bankruptcy (whether you know about them or not)are part of your bankruptcy. As such, since the 2007 tax year was before your bankruptcy, any refund that may be found related to that year, belongs to the bankruptcy.
Your Trustee is correct, and CRA will proceed to send any adjustment refund for the 2007 tax year directly to the Trustee for the benefit of the bankruptcy estate.
As an aside, please note that this applies to tax return refunds, but not Child Tax Benefit (CTB). If you are owed CTB for the 2007 tax year, it will be sent to you, as it is intended for your child.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
My ex has just filed for bankruptcy. Does he still have to pay child support? FRO says it will take a couple weeks to months to get money from him... is there anything I can do??
I GRADUATED IN 1997 AND I LEFT TO GREECE.I AM THINKING OF COMING BACK TO TORONTO.WILL I HAVE PROBLEM AT THE AIROPORT.WHAT ARE MY OPTIONS AFTER ALL THESE YEARS.WHEN I LEFT MY DEBT WAS 50000.WHAT DO I HAVE TO DO... IS bankruptcy is the option for ME...
I claimed bankrupcy in 2003.Was discharged in 2005.when can i apply to remove bankruptcy from credit report?
its been 2 years now that my husband I are having bad credits. there is some point of time that so may calls and letter from the collection agency but its been maybe a year that they are not bothering us. but we still owe the money on diferrent lender i just dont remember anymore. we been holding filing bankcraftcy but i think its time now, we receive a letter from the scotia bank for our car loan they are asking as to pay the whole amount in 10 days or they have to do some action. my issue is. should i file bankraftcy now or later . we have another car on u husband name also but this is not loan own by my husband are they gonna take the car ...
please advice
August 3, 2011 4:29 PM - Child Support and Bankruptcy
Hi Anonymous,
Sorry for the delayed response - away on vacation.
Yes, child support (both arrears and current payments) must still be paid regardless of bankruptcy. Bankruptcy itself does not really affect his payments - if he was going/able to make the payments if the bankruptcy had not occurred, he will still make them. Unfortunately, whether there has been a bankrutpcy or not, in my experience there seems to be some delay from the time payments are made to FRO and the time the receipient receives them.
I hope this helps. You are allowed to file a claim with your ex's Trustee for any back child support you were owed at the date of bankruptcy - and should do so, in case there is money to distribute from the bankruptcy. Your support claim may rank in priority to other claims.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
August 10, 2011 4:08 AM - Debts in Canada - Left for Greece in 1997
Hi Anonymous,
You should not have any problem at customs and immigration on account of the debt you left behind. In fact, it's quite likely that in the past 14 years the creditors have given up collecting, and the debts may have even disappeared from your credit report. That said, if you are in a position to pay the amounts back, that's the morally correct thing to do.
If you are unable to pay the debts back in full, then you can consider a consumer proposal or bankruptcy, filed in Canada. Both processes have requirements that will require you to be around and available for a while - so choosing one of these options may depend on whether you are coming for a visit or intend to move back to Canada.
As an aside, your Trustee will be required to investigate your assets worldwide, so any holdings in Greece or elsewhere will be considered in the evaluation of whether you are able to pay your creditors or not.
Regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
August 12, 2011 11:29 AM - Removing Bankruptcy from Credit Report
Hi Tim,
Approximately 6 years from the date of your discharge from bankruptcy, the credit bureaus (Equifax, Trans Union) will purge the records of the creditors with respect to whom you filed bankruptcy. This is an automatic process as I understand it, provided that the credit bureaus have been provided with a copy of your discharge certificate so that the date of discharge can be updated on your credid bureau report. Please note that most Trustees do not do this for the bankrupt person - they have to do it themselves.
The first step in the process now is to obtain a copy of your credit bureau reports (you need one from each as some creditors only report to one) to see what is still on it.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
August 12, 2011 3:21 PM - When is Good Time to File Bankruptcy?
Hi Anonymous,
I would recommend that you consult with a Trustee as soon as possible. At MNP, we offer a free initial consultation at which time we will look at yuor situation and let you know what will happen (or not happen) if you file bankruptcy.
If a car has a valid lien on it because of a loan, the lender (bank) can take the car if the payments are not made - whether there is a bankruptcy or not.
If there is no lien, the situation is different. Most provinces allow an exemption on one vehicle - which means that it cannot be seized by a creditor and will not come into a bankruptcy. In Ontario, any vehicle worth less than $5,650 is considered exempt. If your husband's car is worth less than this, then the bank cannot take it, and he would get to keep it in a bankruptcy.
As I indicated above, I think you are best to get some solid advice at this time about what your options are. Please see our website at mnpdebt.ca to find an MNP office near you - feel free to contact us for an appointment.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
Child Support and Bankruptcy cont'd:
Thank you soo much for your help. I really appreciate it.
If I declare bankruptcy, does the bank that holds my mortgage garnishee my wages for legal fees? Also, if same bank holds loan for car, will I lose my car. Payments have never been late.Thank you.
why if a bankruptcy stays on your record for only 7 years do they consider it a second bankruptcy if it is more then 7 years later?
Why is it considered a 2nd bankruptcy if more than 7 years later? - September 20, 2011
Hi Anonymous,
There are two different systems at work here. The credit bureaus(e.g. Equifax, Trans Union) keep a record of debts discharged from a bankruptcy at least 6 years from the date the bankrutpcy ended. The Superintendent of Bankruptcy (Industry Canada) maintains bankruptcy records indefinitely. When you file bankruptcy a 2nd time, the 1st bankruptcy will be reported on the bankruptcy papers based on the Superintendent's records.
The Superintendent's records are available electronically from 1979 forward. If someone was bankrupt prior to that, they are still obliged to advise the Trustee and the information will be recorded on the statement that they are swearing under oath. One gentleman who filed bankruptcy with me had filed once before - in the 1960s. We were obliged to report it and it was still considered a 2nd bankrutpcy for him.
I hope this helps explain things.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
Anonymous said...
I am 66 and on CPP pension.i cannot pay my creditors anything as that is all i have coming in.i have a vehicle that is worth less than $5600.00 and i still owe $1700.00 on it.i am making the car payments but i do miss at least one payment( every three months ) that i always make up the next month.
i have also obtained credit using a different first name,(kept the last name)due to the fact i was on ODSP and could not get credit otherwise ( cable services etc. plus a divorcy who will not support us even with a court order telling her to do it )---i want to pay off the vehicle FIRST--- and then make a consumer proposal of 50% with a trustee.i do not want to claim bankruptcy as that would be my third time at bankruptcy.i wish to go back to work now that my dependent is older and in high school now. the problem is that the creditors will nail me as soon as i start working again by way of garnishments etc.
i owe around $13000.00 minus the car payment.i know i may be in hot water too as i used a false first name many times just to survive with raising two children on ODSP and of course the poverty that entails. the main thing i am worried about is that i used a false first name to obtain credit but not my last name.my question is should i even attempt a proposal as i think i may be in for a rough ride in a proposal or a bankruptcy court for fraud. also to anyone who reads this comment of mine ---please do not jump to conclusions as you do not know all the circumstances with a dead beat spouse who will just not pay the support that would have gotten me out of this mess nor the poverty the ODSP places on disabled citizens. i won full custody of both children and then had to live on $1700.00 a month for the last six years. i did what i and others had to do in that situation.
October 2, 2011 9:28 PM
Proposal after two bankruptcies; questionable credit choices - October 2, 2011.
Hi Anonymous,
Your blog posted, but then disappeared. It did not appear that you deleted it intentionally, so I reposted it, as you raise some important issues.
While I can't speak from experience, I have had clients in similar positions - lack of spousal support, low income, spotty credit record.
You may consider a proposal as an alternative to a 3rd bankruptcy - it would be preferable actually.
You have already correctly identified a problem - acquiring credit under false pretences. This may result in the debts being undischargable under either a proposal or bankruptcy, if the creditors pursue and obtain proof of fraud. Given your income however, it is questionable whether the debts would be collectible even if they survived a bankrutpcy or proposal, so the creditors may choose not to pursue the matter.
Please ensure you are honest about what happened when you consult with a Trustee (which you should). We can't offer good advice if we don't know all the facts.
I hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
Hi, my brother file for bankruptcy, I know for a fact that he lie to the court about money he had. He fraud me from my life insurance( loan he took out ) and he took a loan out on his as well. He told me it was to pay off his bill he had.
The total was well over 6,000. He never pay off his bills. But file for bankruptcy instead. His now wife hid the money in her bank account for him.
I have proof he lie, can I do anything about it ? He will not pay my life insurance back and now I'm on the hook for this loan now is over 7,000.
Hiding Money From Trustee and Creditors - October 12, 2011 8:03 AM
Hi driver48,
You should tell your brother's Trustee what you have said here - that he took out this loan and kept the money aside unstead of paying the creditor(s) back or putting the money into the bankruptcy.
Of course, the Trustee will need some proof that this has happened. You will need to show that you took out the loan and then gave him the money (e.g. provide a copy of the cancelled cheque from the bank). The Trustee has the right to ask for bank statements etc. to see where the money went.
If it can be shown that your brother has hidden the money away, he may be required to pay it into the bankruptcy in order to get his discharge. You may not get all the money back personally (as it may get shared with other creditors), but at least your brother would have to pay it.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
i am considering declaring bankruptcy. I purchased a vehicle in 2008 for 27,999. I owe 14,222 on the vehicle. It is used specifically to run my floundering business. I have not missed a payment. Will I lose my form of transportation if i declare?
Will I lose my vehicle if I declare bankruptcy? - October 18, 2011 8:44 AM
Hi Anonymous,
First of all, a Trustee will always look to see whether there is any 'realizable value' in an asset. If you owe money to a lender who has a lien on the asset (like a vehicle), that lender would get paid first from any sale proceeds. Most of the time, vehicles depreciate in value at least as fast if not faster than the rate at which the loan is paid down. So there is rarely any 'realizable value' in the vehicle - and if the Trustee has no interest in it, you are free to keep it - provided you are up to date with your payments to the lender. Furthermore, there are a number of asset exemptions allowed to people who file bankruptcy. In Ontario, the first $5,650 of one personal vehicle is exempt. If a vehicle is used for business, it may be considered part of the 'Tools of Trade' exemption of up to $11,300 in assets.
So based on the situation you described, it is likely that you would be able to keep your vehicle in spite of having to file bnakruptcy.
I hope this helps,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
if i declare bankrupcy and have a claim on my content insurance is it subject to my bankruptcy even if it is on my stuff that I am allow to keep?
Content insurance payout part of bankruptcy? November 3, 2011
Hi Anonymous,
The answer to this question is 'it depends'. Content insurance will often pay 'replacement value' for the things that are lost by fire, flood, etc. When you file a bankruptcy, you list the approximate 'realizable' value of your household or personal assets on an as-is basis. Because of this, it is rare that anyone is over the exemption threshold (which in Ontario is $11,300 on household furnishings and $5,650 on personal effects - clothing and jewelry). The fact is, used furnishings and clothing don't fetch a lot of money on resale. If the amount insurance pays you for the loss of these items does not exceed the exemption thresholds, then the monies are still exempt, provided they are used on a timely basis to actually repurchase the exempt items. A problem arises where the insurance payout exceeds the exemption thresholds. In these cases, in my view, any amount received over the exemption threshold would have to be paid into the bankruptcy - as any non-exempt asset that 'devolves' upon the bankrupt person before their discharge from belongs to the bankruptcy estate. I know this may not seem fair, but a windfall from insurance does not fundamentally differ from any other kind of windfall (e.g. Lottery, inheritance, etc.)
I hope this answers your question.
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
I have a very complex case. I filed for personal bankruptcy in 1999 for the 4th time in the last 35 years and obviously looks awful on the surface. During the next few years, I was working and believe it or not, I forgot that I was still in bankruptcy until my accountant told me when he tried to file my taxes online. I attempted to contact my trustee and fo9und out during that time frame that he had been disbarred and my file was referred to another trustee and the file is currently in the archives. I spoke with the superintedent of trustees and he just told me that I should probably get a lawyer? Why would that be. Can I resurrect my file in it's current state after such a long period of time? Further, can I still offer a proposal to the creditors and not go bankrupt?
Thank you
in what situation would i be able to keep my house
Undischarged from Bankruptcy After Many Years - What to Do? November 18, 2011 9:44 am
Hi Anonymous,
If the substituted Trustee is unable to help you, then the advice of the Office of the Superintendent of Bankruptcy is correct - you may hire the services of an insolvency lawyer to help you get your discharge. The reason a lawyer is required is that your discharge can only be granted by the court - and a discharge hearing must occur. So the lawyer will apply for the hearing and attend with you. It's important to ensure that any outstanding duties are completed prior to applying for your discharge.
That said, there is a possibility that you wil not receive a discharge. Many people who have been bankrupt 4 times are refused a discharge and essentially remain in bankruptcy the rest of their lives. It all depends on the circumstances.
It is possible to make a proposal out of bankruptcy - which acts to annul the bankruptcy. A few of my files have gone this route, and it's a great option if it works. To be fair, however, I have never seen anyone file/make a proposal out of bankruptcy that long after the original bankruptcy.
If you want to explore the proposal option more, I would suggest consulting with a Trustee in your area (MNP if possible!). The Trustee may be willing to do the legal work the lawyer would otherwise have to do if there is going to be a new filing (i.e. the proposal).
I hope this helps.
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
In what situation would I be able to keep my house ? November 21, 2011 10:44 am
Hi Anonymous,
When you file bankruptcy, the Trustee is obliged to look at what you own to determine what money those things would bring to the bankruptcy if they were sold (assuming they are not 'exempt' assets). A house is no exception. Generally speaking, the Trustee will look at how much money you would likely receive if the house was sold, after normal selling costs. If the answer is 'nothing', then you would likely keep your house (provided that you are keeping up your mortgage payments). If there is some 'equity' in the property (what you would likely get if you were to well it) then at a minimum. that amount must come into the bankruptcy for your creditors. Most Trustees will offer the bankrupt person the option of paying an amount into the bankruptcy rather than sell the house. The amount to be paid in may actually be higher than what you would receive if you were to sell the property, as Trustees take into account that by retaining the property you are not incurring the costs of sale and therefore the 'opportunity' to retain the property has value to the bankrupt person, and that saving, at least in part, should be passed on to the creditors.
I hope this helps.
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
REPOSTED
Anonymous said...
Hi Wes, congratulation to your awesome public service. I need advise if I should go for bankruptcy considering the following: 1)I'm 65 years old, unemployed, had quadruple bypass heart surgery recently; 2)my business has no income for over a year, it suffered huge financial reversal due to my biggest US client going under and now, exacerbated by my medical condition; 3)I have been making minimum monthly payments of $2K plus on $140K unsecured business line of credit and credit card debts for over a year from business profits and now, using unused/available credit card balance which is nearly depleted; 4)considering my unstable financial situation, the mortgage company decided to put the house mortgage solely under my wife's name; 5)aside from my $5K vehicle I own, I don't have other assets under my name; 6)my spouse would neither share/divulge her income nor help me financially;7)the possibility of getting future business is 50/50 next year. Considering the foregoing, could you enumerate the implications/repercussions on the use of credit cards to pay other credit cards? would the creditors entertain legal action considering my age and poor medical condition if I opt for bankruptcy? are there other hidden factors I should be aware of or be in the look out for? Thanks,
Posted by Anonymous to Ask an Ontario Bankruptcy Trustee at November 21, 2011 3:26 AM
Hidden Factors in Bankruptcy? November 21, 2011 3:26 am
Hi Anonymous,
Sorry to hear of your unfortunate run of bad luck.
For some reason your original post seems to have disappeared, so I reposted it.
Your situation is certainly complex enough that I wouldn't presume to give advice without seeing the whole picure - I would strongly recommend that you consult with a Trustee (preferably an MNP one!) We offer a free inital consultation and can offer sound advice once we see all the numbers.
I can make some general comments about bankruptcy that anyone contemplating it must bear in mind. Unless exempted by law, anything you own at the time of bankruptcy and anything you come to own while you are in bankruptcy becomes an asset of the bankruptcy - the Trustee may be required to liquidate it. Second, while in bankruptcy, your income will be monitored and you may be required to pay additional money into the bankruptcy for the benefit of your creditors (based on government-set income thresholds). Generally speaking, the law requires that total household income be taken into account in the calculation. If a spouse refuses to divulge their income, the Trustee is obliged to allow the bankrupt person only 50% of the government set threshold as a deduction. If you have income that is consistently over the government-set threshold, your bankruptcy will be longer (e.g. 21 months long instead of 9 for a first-time bankrupt person)
As I said, these are general guidelines. The specific impact of a bankruptcy on you can only be determined by a detailed review beforehand.
I hope this helps,
Warmest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
I have a question regarding liability of a trustee.
Background: Assets had a retention of title clause on them and the company went into administration, then bankruptcy 3 years later. Notification was provided to the Trustee on numerous occasions between liquidation and administration regarding the retention of title and requests that the items be returned. No return has been made, although an admission to the sale of the goods was made.
My Questions:
1. Are you able to chase the Trustee for liability for the sale of those goods?
2. If so do you require permission from the court to sue the Trustee?
I have a bank threatening to sue me as I owe nearly 50k to them. I don't own a home and have no assets. But I do have a small income 1k a month from self empliymnt. Am i judgement proof?
My credit is so far gone, it seems as though it is too late. I know that not doing anything is not the answer but I have no idea where to start. Can some one help me get on the right track please?
April 27, 2012 - Self-Employed and Judgments Proof?
Hi Anonymous,
Sorry to hear of your debt problems. Unfortunately, being self employed does not make you 'judgment proof' per se. When a creditor ontains a judgment against you, they can then use that judgment to seize your assets or garnishee you. While you don't have wages that can be garnisheed as a self-employed person, you may have a bank account that the creditor can seize, or receivables that the creditor can intercept. You may want to consider a formal insolvency process like a proposal to settle your debt with your creditors without having to file bankruptcy. A Trustee is authorized to file a proposal for you. MNP would be pleased to assist, and the first consultation is always free. To find a location close to you, see mnpdebt.ca
Warnest regards,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
April 27 - Debt too far gone - where to start?
Consulting with a Trustee in Bankruptcy ("Bankruptcy Trustee"), all of whom are professionals licenced by Industry Canada, is a good start. At MNP, we offer a free initial consultation. Bankruptcy is not your only option, and we can help you find the solution that fits your circumstances best. To find a location nearest to you and make an appointment, please visit mnpdebt.ca
All the best,
Wes Cowan, MA, CIRP
Trustee in Bankruptcy
MNP Ltd. - mnpdebt.ca
Hi. I am wondering where someone goes in London Ontario if they need to file for bankruptcy. Also wondering if it makes any difference if this person is on the Ontario Disability support program. Also, will filing for bankruptcy address the issue of this person getting multiple calls from collection agencies?
Thanks
Hi. I am wondering where someone goes in London Ontario if they need to file for bankruptcy. Also wondering if it makes any difference if this person is on the Ontario Disability support program. Also, will filing for bankruptcy address the issue of this person getting multiple calls from collection agencies?
Thanks
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I am in the middle of my study period at an Ontario University, and my past debts are getting to the point where I cannot manage them. I have received OSAP for the prior years for my schooling. If I apply for banruptcy now will I still be able to obtain OSAP for my remaining 2 years?
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