Ontario Personal Bankruptcy Blog

Wife's House & Bankrupty

2009-11-02T18:53:00.000-05:00

Question: My wife has a house\Mortgage in her name.
I have my debt only in my name, if declare bankruptcy in Ontario can my wife lose the house/mortgage?

Answer: No, if the house and mortgage are in your wife's name, and have always been in her name, and if you have not co-signed, than your bankruptcy does not directly impact on her relationship with her bank.

declaring a personal bankruptcy and leaving the country

2009-10-29T19:19:00.002-04:00

Question: Hi, I have a questions. I owe about $45k at this time. I'm wondering what happens if I go back to Europe and stay there, never come back, or maybe in 5 years to visit, or even to stay. Will someone come after me? Do they do a write-off and declare me bankrupt after a while?

what is better? to just leave the country or to declare bankruptcy first? if I just leave and come back in 2 years will they stop me at the border?

Answer: If you owe money and don't go bankrupt, your creditors will attempt to collect by sending you letters, and perhaps by taking you to court. However, if you are not in Canada, it is virtually impossible for the creditors to get a court order to garnishee your wages. Not paying your debts does not automatically make you bankrupt.

You could declare bankruptcy before you leave the country, but when bankrupt you are required to attend two credit counselling sessions, so in most cases if you are leaving the country you will probably not declare bankruptcy first. Having debts does not mean they will stop you at the border if you come back for a visit.

Conditional discharge from bankruptcy

2009-10-29T16:54:00.004-04:00

Question: Hi, Can someone appeal on a conditional release?

If so, is there a time frame?

Thanks

Answer: In theory, all court orders can be appealed. To appeal a conditional order of discharge to the Superior Court you would need a lawyer. It is possible to request revisions to a conditional order, perhaps based on a change of circumstance, but generally the bankruptcy court will require you to wait a year before asking for revisions. Your trustee or a bankruptcy lawyer can provide you with more information.

Bank Accounts

2009-10-29T12:49:00.000-04:00

Question: How are joint bank accounts affected by my husband's bankruptcy? What about a savings account that has always been in my name only?

Answer: The answer depends on whether or not the joint bank account has money in it, or if it's in overdraft. If a joint account is overdrawn, the bank may freeze the account in a bankruptcy, which then impacts on both account holders. The bankrupt person is no longer responsible for the debt, but as the co-account holder you would be responsible.

Most trustees recommend that you open a new bank account at a new bank (where you don't owe any money) prior to filing bankruptcy. That eliminates the possibility of your existing bank freezing your account.

If you have a savings account that is in your name only, it should not be impacted by your husband's bankruptcy.

Lost Credit Statements

2009-10-26T17:05:00.003-04:00

Question: I am about to claim bankruptcy and going to my final meeting to do so.
It says I require all my most recent statements from credit cards. Well I've moved within the past years and when I did I guess I didn't change my address with the credit card companies and I have not received any recent statements for the year. I know I owe them, the cards are maxed out but since I moved I don't have any statements to bring in to my trustee. Will this be a problem or does the trustee have ways of finding all this information with previous addresses and the credit card itself?

Answer: It's not a problem. If you have the names of your creditors and an estimate of what you owe the trustee will be able to mail the creditors when you file bankruptcy and obtain the exact amounts owing.

Personal bankruptcy published in newspaper?

2009-10-20T21:19:00.000-04:00

Question: Will my decision to file for bankruptcy be published in the newspaper?

Answer: In most cases, notice of a personal bankruptcy in Ontario is not published in a newspaper. If a corporation declares bankruptcy a notice is published. If a person goes bankrupt and their non-exempt assets are greater than $15,000 then a notice is published, but that is very rare.

Your Ontario bankruptcy trustee can provide you with more information.

Bankruptcy and divorce

2009-10-20T19:47:00.003-04:00

Question: I am currently looking at personal bankruptcy due to large unsurmountable personal debt. I am anxious to get the process started but am also in the midst on a divorce trial commencing within the next month. My question is: If I start the banruptcy process now and find during my divorce trial that I owe a equalization payment, can that be included in my bankruptcy? Essentially, if it is found that I owe this payment it would be based on assets as of the valuation date (October 2004) that do not exist now.

Answer: In most cases the answer is yes, equalization payments are a debt that is included in bankruptcy. However, in divorce proceedings there are many factors that may change that answer.

For example, court ordered support payments are not discharged in a bankruptcy. The wording of the eventual court order will therefore determine what can be discharged in a bankruptcy, and what can't.

This is a very complex legal matter, so you should discuss this in detail with your lawyer and a bankruptcy trustee before you decide whether or not bankruptcy is the correct option for you.

Surplus Income and Bankruptcy

2009-10-19T10:04:00.000-04:00

Question: I filed for bancruptcy in September 2009. I am unemployed and my husband is only one working in the family. We are 5 people in the family and our income has to be $3941 per month in order not to avoid paying surplus income,but we had $340 in September, and we have to pay around $35 surplus. My question is, is surplus income going to affect the time for discharge or not, if we have surplus every month and is the new law going to have affect on us, or we are going to follow old law?

Answer: Whether or not you follow the old law or the new law depends on when you filed bankruptcy. The old law applies prior to September 18, 2009; the new surplus income and bankruptcy rules apply after September 18, 2009. Under the new rules if your surplus income, on average, is more than $200 per month, your bankruptcy will be extended for an extra year. If you will be averaging $35 per month in surplus, your bankruptcy will not be extended due to surplus income. You should contact your trustee to determine your exact bankruptcy filing date.

Creditors' meeting in a personal bankruptcy

2009-10-13T08:08:00.000-04:00

Question: I declared personal bankruptcy on Sept. 17. A creditors' meeting was to be on Oct. 7, but no creditors showed up. I was informed that the meeting had been adjourned. I was told that the trustee will be contacting the main creditor "to see when they are available to send someone to attend the meeting and we will be sending out the notice as soon as I hear from them". Is this normal? If a meeting was announced and they did not show up, isn't it their business? Do we have to wait until they do? How many times can meetings be adjourned after they fail to show up?

Answer: It is very unusual for a creditors' meeting to be scheduled in a bankruptcy. Most bankruptcies, where your total assets are less than $15,000, are "summary administration bankruptcies", and creditors' meetings are only called if a creditor requests it.

It would appear that you had assets of greater than $15,000 (actually in your case $10,000, since the rules changed on September 18 increasing the limit from $10,000 to $15,000), so your bankruptcy may have been filed as a "Ordinary Administration", which requires an automatic creditors' meeting.

In most cases if no creditors attend the meeting, that's it. No further meetings are scheduled, unless there is a specific reason why the trustee is requesting the meeting.

We suggest that you contact your trustee and as them to explain why a creditors' meeting was necessary, and why it's necessary to re-schedule the meeting. It's possible that there are valid reasons for doing so, but only your trustee can give you a full explanation.

didn't know I owed money to a creditor prior to bankroptcy

2009-10-10T06:18:00.002-04:00

Question: In the mid 90's I cosigned a cell phone for a friend and apparently he stopped paying the bill in 2007, I have since then gone bankrupt and been discharged in nov 2008. During my bankruptcy they contacted me once and told them to contact my trustee, I also told my trustee about this he said not to worry about it, as they needed to contact him and I had done the right thing by giving his information. As it turns out now 2 years later they are trying to contact me again and have placed an item for collections on my credit file with equifax dated 2009. what should I do?

Answer: You should contact your trustee again, and ask them to send a copy of your bankruptcy paperwork to the cell phone company. You should also send the information to Equifax and ask them to remove the information from your file, since it was included in your bankruptcy (because the debt existed prior to your bankruptcy).

confused about bankruptcy in Ontario and my car

2009-10-03T08:12:00.001-04:00

Question: I'm thinking about filing for bankrupcty but at the same time am not to sure... I have a debt that just doesn't seem to be coming down at all in payments and i can not seem to keep up with it. So my question is seeing my drive to work is 1 hour from my house if i claim bankruptcy in Ontario is there anyway that i can leave my car outta it and continue to make that payment!!

Answer: Yes, you can. There are two types of debts: secured and unsecured. Unsecured debts, like credit cards, are included in a bankruptcy. Secured debts, like a car loan, are NOT automatically discharged in a bankruptcy unless you surrender the asset.

So, with your car loan, you have two choices. If your payments are up to date and you want to keep making the payments, you can keep your car and keep making your payments.

Your other choice would be to stop making the payments and surrender the car to the lender, in which case any resulting shortfall would be include in your bankruptcy. A bankruptcy trustee can explain the process in more detail.

forgot a creditor

2009-10-03T01:00:00.002-04:00

Question: i have declared bankruptcy had my two meetings and its now into my 7 month but i borrowed money from cash store and unable to pay back...can i still add them as one of my creditors or no?

Answer: All debts that existed prior to the start of your bankruptcy are automatically included, so if you borrowed the money more than seven months ago, yes, you can still add them as a creditor. You should contact your trustee, who will notify the creditor.

If you borrowed the money after your bankruptcy started, the debt is not included in your bankruptcy.

Lost bankruptcy papers

2009-09-29T18:54:00.002-04:00

Question: I need a copy of my discharge papers but lost it through 4 moves, the trustee company that i went through is not in business anymore and it was in 1990 that i went bankrupt and was wondering where i can get a copy of it because i am starting a career in the financial industry and is required for me to get a copy of it.

Answer: It seems strange that anyone would want to see paperwork from almost 20 years ago; it has no relevance today. To start, you should find out why they want the paperwork. If they simply want confirmation of your bankruptcy, you can obtain that by doing a bankruptcy search.

If that is not sufficient, you could contact the Office of the Superintendent of Bankruptcy; they may be able to find the records for you.

Surplus income calculation

2009-09-28T01:11:00.000-04:00

Question: I am considering filing bankruptcy in Ontario. I have 1 room mate and everything is split 50/50. The trustee stated that it is based on the entire household income, and that if the 2nd person did not wish to disclose information that the allotted amount of income per month would be the 2 person rate divided in half. Why does it matter how much my room mate makes as we split 50/50. It is not their debt but mine. Even on the work sheets it states spouse's income. No spouse here, so why are they included? This than makes my surplus payments outrageous that I still won't be able to pay those off, but it is too expensive to live on ones own.

Answer: It would appear there is some confusion here. Yes, surplus income is based on your family income, which in most cases is the same as your household income. If you live with your spouse, their income is factored in to the calculation. But if you live with a room-mate who is not a member of your family (ie. they are not your spouse), then their income is irrelevant. It is not included in your family income for household purposes.

Here is an explanation of surplus income payments in bankruptcy. If the person you met with did not explain it to your satisfaction, you should consult another bankruptcy trustee.

Questions on keeping our house in bankruptcy in Ontario

2009-09-26T13:33:00.003-04:00

Question: Our house is in both mine and my husbands name, with both of us being on the mortgage. Our house is valued at 174,000 and we still owe 160,000 on the mortgage. I am looking at going bankrupt, but not my husband. I owe 60,000 in student loans and can't keep up with the payments. Our mortgage is not behind, but can we keep our house or will we lose it if I go bankrupt and how will this affect my spouse?
If he is still able to pay the mortgage will this affect me? Any info is appreciated.

Answer: Yes, you can keep your house if you go bankrupt. You will need to get a house appraisal and a print out from the bank of the amount owing on your mortgage; from that your trustee can calculate your share of the equity in the house. If there is any equity, you would be required to pay that amount while bankrupt. In your case there is probably very little equity.

Your bankruptcy trustee can explain the calculation in more detail.

judgements and bankruptcy

2009-09-26T12:49:00.002-04:00

Question: Friend being sued by previous landlord who received judgement through the court. Friend was not present at the time and received papers stating this in the mail this week. Friend declared bankruptcy in May but this landlord was not listed as a creditor by mistake. Can the judgement be removed? If so, how? If not, what must be done?

Answer: Yes, all debts that existed at the time the bankruptcy was filed are included in the bankruptcy, whether or not they were listed originally. Your friend should contact his bankruptcy trustee and request that they notify the court of the bankruptcy, so that the judgment can be set aside.

bankruptcy disharge question

2009-09-23T10:25:00.003-04:00

Question: I have been with my wife for 4 years now, she was bankrupt in 2003 and from what I can tell she was not discharged because at the time there was surplus income which she did not pay,(apparently the amount she was told to pay was approx $1800, being a single Mom at the time, she went to court to oppose the amount and they doubled it!) I would like to know the steps to getting this mess cleaned up and discharged, thanks.

Answer: The simplest option is to contact the original trustee and determine what exactly is required to obtain her discharge. If the only issue is money, than the simple option is to pay whatever the court ordered her to pay, and then the trustee can apply for her discharge.

If she does not want to deal with the trustee, or if she does not agree with the decision of the court, then her only other option is to contact the court and book another discharge hearing, and ask the court to vary the terms of her original discharge order. She will need to demonstrate that she does not have the ability to pay what was originally requested. That process is easiest if you have a lawyer do it on her behalf, but obviously that costs a significant amount of money, so dealing with the original trustee is usually the cheapest option.

My Trustee is opposing my Bankruptcy

2009-09-20T22:08:00.003-04:00

Question: Hi, I filed for bankruptcy last year in sept and had an interview with CRA lady, everything went okay and my trustee told me that everything will be okay in my case as it is my first time bankruptcy... so now I have learned that my Trustee has opposed my bankruptcy in the month of April this year, he did not even inform me about it, I just received a letter 4 days ago and I have to appear in court for hearing, I am totally lost as to what to do, I dont trust my trustee anymore as he lied to me and kept in dark...the reason he has given in the statement for opposing is
1) Bankrupt has admitted to trade while knowing himself to be insolvent
2) the assets of the bankrupt are not of a value equal to fifty cents on the dollar on the amount of his unsecured liabilities.

Now i am confuse as to who should I talk to and how should I prepare myself for hearing next month..as I don't trust my trustee.

Can i change my Trustee.
Can i get my money back from him which i paid him as his fee about $1400 which i borrowed from family.

I have moved to Vancouver couple of months ago so can i transfer my case from ontario to Vancouver court, is it possible as I can't afford to travel to toronto

Any help will be highly appreciated.

Answer: Once a trustee is appointed, only the creditors or the court can change trustees. You cannot transfer your case to another jurisdiction. You have two options:

First, talk to your trustee and have them explain in detail what the issues are, and what they intend to say in court.

Second, if you are not satisfied with that explanation, you can hire a bankruptcy lawyer to represent you in bankruptcy court, although it is also strongly recommended that you also appear in court for your discharge hearing.

owing homes and filing bankruptcy in Ontario

2009-09-17T11:16:00.003-04:00

Question: I am currently in financial trouble after loosing my job over a year ageo. I am currently working but I am drowning in debt and need a fresh start. I have two homes both in my name where the principal residence is in trust at 50% for my cousin. The second home is my cousins but morgaged to me. Since I was unemployed and the debts are stressing I feel I have no option but to file for bankruptcy. My question is will I have to surrender the second home just because its in my name neither home have equity.

Answer: Yes, you can keep your home if you file bankruptcy in Ontario. If there is no equity, the trustee won't take your house or houses.

However, if you are unemployed and are worried about making the payments on the house, it may be more logical to simply surrender the houses back to the mortgage company, and then any resulting shortfall would be included in your bankruptcy.

There is no correct answer in your situation, so you should discuss your decision in detail with an Ontario bankruptcy trustee before you make your final decision.

How can I make this right again?

2009-09-17T04:54:00.000-04:00

Question: What if you were someone who had some troubles (music industry....) when they were 23, left the country for a while, defaulted on their line of credit/credit cards just to get away, and in a state of folly and stupidity never planned to come home, but then one day came to their senses and came back, at 26, realizing they'd ruined their credit and didn't even know how much they were in for...?

My friend J. tells me I should just "declare bankruptcy and get it over with", since I'll never be able to get any credit again at this point anyway. Honestly? I don't even know how much I owe. I changed banks, phone numbers, addresses so many times-- I feel like a complete criminal. Maybe 30K? I am a good person. I have just made stupid mistakes. I want to make it right. I there is a better way to work it out, I want to do it. I don't even know what to say to the courts-- it's all such a mess. I'm so embarrassed, I keep putting this off, and I know it gets worse everyday. Where do I even begin..? Please help.

Answer: If you want to clean up your situation, the first step would be to determine how much you owe. You could request a copy of your credit report from Equifax to see who you owe. If your debts are manageable, you may be able to contact the creditors and make repayment arrangements. Or, you could have a lawyer help you make debt settlements.

If your debts are more than you can handle, then yes, either a consumer proposal or a bankruptcy might be necessary to deal with your debts and give you a fresh start. If that's the case you should discuss your options with a licensed trustee.

child tax credit and bankruptcy

2009-09-16T12:21:00.004-04:00

Question: I am currently working with one child at home. I receive the child tax credit for my son, however I owe Child tax credit some money from years past and they are taking half of each months payment- the debt went from 12,000 to 7,000. I am currently considering bankruptcy and I would like to know if this debt can be claimed in the bankruptcy...any help would be wonderful.
thank you

Answer: Technically, yes, your debts are discharged in a bankruptcy, including debts owed to the government for overpayment of child tax credit.

However, in practice, the federal government considers child tax credits to be a discretionary payment, meaning they can pay it, or not pay it, as they see fit. Therefore, if you go bankrupt, the government could decide to simply keep doing what they are doing, ie. paying you half of the amount you would otherwise be entitled too.

There have been cases where the government takes the position that if you go bankrupt, they will not resume regular child tax credit payments until the start of the next child tax credit year, which starts on July 1 when they re-adjust your monthly amount based on your previous year's income.

In other words, it is impossible to say for sure what the government will do. It is likely that some but not all of your child tax credit debt will be discharged, but until you actually go bankrupt there is no way to know for sure. Unfortunately the government in the past has not applied their rules consistently.

Wage garnishee

2009-09-13T17:58:00.002-04:00

Question: My question is if my wage is being garnished by a company is the juice still rolling? Meaning can they be tacking on "interest or keep increasing the amount owed so i owe $9,500 and they take $ 200 off my cheques (biweekly) a month and now i still owe $9,320 becuase $20 was tacked onto the amount owed?

Answer: The short answer is yes, since you owe the money, the creditor can continue to add interest to the amount you owe until it's paid.

If you are being garnisheed for $9,500, it may be prudent to review your options for how to stop a wage garnishment.

who will know i've gone bankrupt?

2009-09-10T11:24:00.000-04:00

Question: Hello, I am embarrassed about going bankrupt and would like to know how confidential the process is? How can someone search to see if i am bankrupt, do they have to input my social insurance number OR can they search only by last name?
thanks

Answer: Once you file bankruptcy your credit report will be updated to show that you are bankrupt. Any bank or lender that does a credit check will see that you are bankrupt. This is done based on your name, not your social insurance number.

The other way to find out if a person or company has filed bankruptcy in Canada is to do a search on the Office of the Superintendent of Bankruptcy's web site. The cost is $8 for each search.

first time and scared and feeling stupid

2009-09-04T14:56:00.004-04:00

Question: I have recently filed a consumer proposal and went for my two counselling sessions during which I learned that I was $450.00 short income each month. I have listed my house for sale and am in arrears with the bank for 4,444 plus now I have 3,500 bank fees on top. I was told by friend to vacate my house--but how does this help. I am drowning and can't get out--- is vacating an appropriate option and where/how can I rent with a proposal and potential vacating?--please help--I am desperate.

Answer: You should immediately contact your trustee and ask for a meeting to review your options. If your cash flow is short by $450 each month, your proposal is not viable; you will get behind on your payments, and it will fail.

The first option is to either increase your income or reduce your expenses to eliminate your cash shortfall each month. If you can do that, it's possible that you can continue with the proposal.

If you vacate your house to save money, and there is a shortfall, you will probably be liable for the shortfall, since the shortfall has arisen after you started your proposal. If you intended to surrender your house, you should have vacated and stopped making payments prior to filing your proposal.

If you can't afford to keep the house, and if you can't afford your proposal payments, your only other option may be personal bankruptcy in Ontario. Again, you should either contact your existing trustee, or if you are not satisfied with the advice they have given you contact another Ontario bankruptcy trustee for a second opinion.

OSAP Debt

2009-09-02T14:32:00.002-04:00

Question: Can my OSAP ($42,000) debt be included in my consumer proposal, ending this month, if I graduated eleven years ago in the field I am now working in? I am 45 years old and also have a dependent.

Answer: A student loan is automatically discharged in a consumer proposal or a bankruptcy if you have been out of school for more than 7 years at the time of filing. Prior to July 8, 2008 the rule was ten years.

Therefore the answer to your question will depend not on when the proposal ends, but when it was filed. You should consult your trustee for further information, and to determine which dates are relevant in your situation.