personal bankruptcy

Personal bankruptcy related posts written by a Licensed Insolvency Trustee.

  • consumer proposal,  covid-19,  personal bankruptcy

    CERB overpayments can be discharged in a 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…

  • covid-19,  personal bankruptcy

    Urgent Info: How Bankruptcy Affects Your COVID-19 Benefits From The Government Of Canada

    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…

  • economics,  budgeting,  consumer proposal,  investing,  personal bankruptcy,  personal finance

    Preparing for the Next Recession – A Guide For The Canadian Middle Class

    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…

  • personal finance,  personal bankruptcy,  student loans

    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…

  • real estate,  personal bankruptcy

    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.…

  • personal bankruptcy,  credit cards,  income tax

    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…

  • income tax,  personal bankruptcy

    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…

  • consumer proposal,  personal bankruptcy

    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…

  • personal bankruptcy,  consumer proposal

    Who is the Best Licensed Insolvency Trustee in Toronto?

    “Who is the best Licensed Insolvency Trustee in Toronto?” If you came across this blog post after entering this search query into Google, you’re not alone. This is one of the most obvious questions to ask when seeking the services of a Toronto Licensed Insolvency Trustee. To answer this question, let us review some important factors you should take into consideration when choosing the best Trustee for you: Obtaining a Professional Referral Many lawyers and accountants are acquainted with Trustees and are usually familiar with what Trustees do and how they operate. Therefore, if you have a lawyer or accountant, he or she can refer you to a reputable Trustee.…

  • personal bankruptcy

    When You Need To Attend Bankruptcy Court

    Generally speaking, someone who files bankruptcy for the first or second time will get what is called an automatic discharge from bankruptcy. Years ago (pre-1992), someone that filed bankruptcy had to attend bankruptcy court to obtain her discharge from bankruptcy. She had to demonstrate to the court that she fulfilled certain obligations, such as attending debt counselling and generally cooperating with the trustee. If the court was satisfied, the debtor was granted an Absolute Discharge from bankruptcy (i.e., her debts were discharged and she was debt-free). Subsequent amendments to the Bankruptcy and Insolvency Act now allow a debtor to be discharged automatically  if she is a first or second-time bankrupt.…