personal bankruptcy
Personal bankruptcy related posts written by a Licensed Insolvency Trustee.
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Here are your options to deal with debt
Debt Management Plan (DMP) Consumer Proposal Bankruptcy What’s the difference? A DMP is a voluntary agreement with some or all of your creditors that often includes interest relief and the payment of your debts over time. A consumer proposal is a legal process designed to relieve honest but unfortunate debtors of their debts. A proposal is an offer to your creditors to pay all or some of what you owe them over a specific period of time. If the proposal is accepted, and once all the terms of the proposal are met, you are legally released from the debts included in the proposal. Bankruptcy is a legal process designed…
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CERB Overpayments – Discharge with bankruptcy or consumer proposal
The following is a Guidance to Licensed Insolvency Trustees dated March 25th 2022 from the Office of the Superintendent of Bankruptcy’s website: The Government of Canada is beginning to recover Canada Emergency Response Benefit (CERB) where it has been determined that it was paid erroneously or was an overpayment. The Office of the Superintendent of Bankruptcy (OSB) is confirming to Licensed Insolvency Trustees (LIT) that erroneous or overpayment of CERB are provable claims in bankruptcy. Erroneous or overpayment of CERB is a releasable debt in the event of an insolvency given that it is to be treated as a debt owed to the Crown pursuant to subsection 12(2) of the…
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Urgent Info: How Bankruptcy Affects Your COVID-19 Government Benefits
We have been receiving inquiries from people: who are either contemplating bankruptcy or have already filed bankruptcy and haven’t yet been discharged; and are concerned about the impact bankruptcy will have on the various benefit programs that were introduced under the COVID-19 Emergency Response Act. What follows is an e-mail issued to all Licensed Insolvency Trustees earlier today from the Office of the Superintendent of Bankruptcy. This should give you some guidance on how your bankruptcy will affect your benefits under the various programs. Note: “OSB” is an acronym for the Office of the Superintendent of Bankruptcy ——————————————————————————————————————– Guidance re: COVID-19 Emergency Response Act The Government of Canada has introduced the COVID-19 Emergency…
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Preparing for the Next Recession in Canada
As a CPA and Licensed Insolvency Trustee, I had a front row seat during the Great Recession of 2009 – 2011. I saw the devastating impact it had on the lives of ordinary Canadians. These were everyday people who were for the most part honest, hard working, and played by the rules. Yet they found themselves on the short end of the stick when the Great Recession started 10 years ago: some lost their jobs, some had their financial portfolios decimated, some lost their homes and quite a few experienced losing all three. It’s been over 10 years since the onset of the Great Recession and Canadians are more indebted…
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Filing bankruptcy with gambling and substance abuse problems
A readers asks First and foremost I’m a gambling addict and also have problems with substance abuse. I have accumulated so much debt that I have fallen into a deep depression and I just beat myself up daily because I did it to myself. My debts: $3,000 of credit card debt, $11,000 line of credit, $11,000 in payday loans (the worst I know). I pay around $380 a month just on interest charges; pretty much my debts are not going away. I have personal loans from friends of $6.500 and a student loan of $5,000 – I haven’t made a payment since around 2008. I also have a payday loan…
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Transferring a Home Before Bankruptcy
A reader asks: My father fell critically ill earlier this year. As a result, he is unable to pay his credit cards as he is not working. The bills are very large. He has no financial assets other than his a commercial property (owned outright). What options does he have? In relation, can the property be sold to my brother and/or proceeds transferred to him (inheritance), then my father proceed to file bankruptcy without repercussions? Here is a breakdown of his finances: $1.2m – commercial property – owned outright Approx 60-80k in credit card debt only Zero income stream from any source, sadly. My father is not a future planner.…
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20 Year Old Considering Personal Bankruptcy
A reader asks: I messed up big time but I’ve learned a lot of lessons. I earned just a hair shy of $200,000 in my first year as a real estate agent at 20 years old. I was way too immature to have that kind of money, and blew most of it without saving. I invested my tax savings in growing my team which I thought would have been an easy pay back. Lost it all. No worries though just sell more houses. Depression strikes, mother gets very sick, I took on an expensive apartment and car. Not emotionally mature enough to handle these things like an adult yet. Hemorrhaging…
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Bankruptcy and surplus income (Video)
Summary Stephanie has discussed filing for bankruptcy with a Licensed Insolvency Trustee. The trustee explains how Stephanie’s income requires her to make payments during her bankruptcy. Meet Stephanie, the mother of a young son, James, who is just about to enter primary school. Recently, Stephanie has overextended her credit and, despite her best efforts, is unable to pay her bills. Realizing that she needed to speak to an expert, Stephanie found a Licensed Insolvency Trustee located in her area and has gone to meet with her. After speaking to the trustee, Stephanie has determined bankruptcy was the most appropriate option for her. After explaining the bankruptcy process and looking more…
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Income taxes and the “honest but unfortunate debtor”
A bankrupt debtor who was ordered by the Court to pay $35,000 to the Canada Revenue Agency, which was the major creditor in her bankruptcy because of unpaid income taxes. At issue in this court case was whether the bankrupt in question was “an honest but unfortunate debtor”. Diewold (Re), 2018 SKQB 149 The Debtor—a 64 year old pensioner with no available surplus income—owes the Government of Canada a debt of $263,817.16 for personal income tax. The income tax debt makes up over 99% of the unsecured proven claims in the bankruptcy. The Canada Revenue Agency (“CRA”) opposed the Debtor’s bankruptcy discharge. The Trustee reported that the Debtor has assets…
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Replacing your Licensed Insolvency Trustee
So you’ve filed your personal bankruptcy or consumer proposal with a Licensed Insolvency Trustee but for whatever reason, you haven’t been happy with the service you’ve received. Is it possible to replace your Trustee? This will depend on the type of engagement you’re currently undergoing. CONSUMER PROPOSAL Your proposal hasn’t yet been approved If you’ve filed a consumer proposal and it’s been deemed approved by your creditors and the bankruptcy court (i.e., it’s been more than 60 days since the day your proposal was filed and no meeting of creditors has been called), then you’re stuck with your Trustee. However, if your consumer proposal has not yet been deemed approved…