Canadian Government tightens Canadian Bankruptcy Laws
By bankruptcy-services
People who go bankrupt are required to report their income to a Canadian bankruptcy trustee for nine months, submitting a portion of that income to pay off debt. If their pay exceeds a specific limit by more than $200 a month, the trustee will also collect half of the surplus to redistribute to creditors.
Under the new rules, individuals who break the $200 barrier will also be sidelined longer — spending 21 months instead of nine under the control of the trustee.
The longer period will lead to a higher number of bankruptcy defaults, according to some critics Nudging more people toward the consumer proposal option is also problematic, according to some, given that 40 per cent of those who file consumer proposals end up in bankruptcy anyway.
Consumers aren’t the only ones responsible for the rise in bankruptcy rates. Also to blame is the growth of consumer credit, particularly credit cards, and the pressure placed on Canadians to spend, through teaser interest rates and low monthly payments.
Topics: Bankruptcy in Canada, Canadian Bankruptcy, Canadian Bankruptcy Help, Canadian Bankruptcy Laws, Canadian Bankruptcy and Insolvency Act | No Comments »
Canadian Bankruptcy and Insolvency Act
By bankruptcy-services
The Canadian Bankruptcy and Insolvency Act is the basis for all decisions regarding Bankruptcy in Canada.
Bankruptcy in Canada is often divided into three stages.
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Initiation of the bankruptcy process
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Between bankruptcy and discharge
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Absolute or conditional discharge
Bankruptcy in Canada is designed to do any or all of the following:
- To permit an honest, but unfortunate debtor to obtain a discharge of his debts and to make “fresh start”;
- Not only to permit an honest debtor to make a fresh start, but also to rehabilitate such a debtor by counselling the bankrupt on managing his financial affairs after discharge in order to prevent subsequent insolvency of the bankrupt;
- To promote a sense of commercial responsibility of the bankrupt and to deter bankrupt from subsequent insolvencies by introducing stricter legislative and judicial treatment of second and ensuing bankruptcies;
- To permit an investigation of the financial affairs of the bankrupt by a mediator, a trustee in bankruptcy, who is given broad powers to facilitate settlement of the claims by way of consumer proposal, to require compliance with bankruptcy procedures, to set aside fraudulent transactions and preferences among creditors and to adjudicate various matters under the BIA;
- To protect the creditors from competing with each other and to secure the debtor from excessive pressure from the creditors attempting to collect their debts first by introducing a priority of distribution of bankrupt’s property scheme under which all creditors are treated equally in accordance with the scheme.
While there are both positive and negative consequences of claiming Bankruptcy, it is a viable choice for those with high levels of debt and no reasonable expectation of being able to pay it off anytime soon.
For read more about the Canadian Bankruptcy, click here.
Topics: Canadian Bankruptcy, Canadian Bankruptcy Help, Canadian Bankruptcy and Insolvency Act | No Comments »
Canadian Bankruptcy Services. Listings of Canadian Bankruptcy Experts
By bankruptcy-services
Canadian Bankruptcy Services will become more and more needed as the economy continues on its downward spiral. From the turmoil in the US Stock Exchanges, to the crashing Canadian economy, more and more people are going to turn to bankruptcy in Canada to survive this Recession.
As a result, we’re looking for companies or individuals that would like to be listed here. We’re looking for some Canadian Bankruptcy experts to help our visitors navigate the stormy Canadian Bankruptcy Rules and Regulations.
Some of the Bankruptcy experts we’d like to link to include…
Canadian Bankruptcy Lawyers
Canadian Bankruptcy Counselors
Canadian Debt Counsellors
Canadian Bankruptcy Trustee’s
If you deal with Canadian Bankruptcy’s on a regular basis and are considered an expert in your field, please send us an email so we can possibly provide a link to your bankruptcy service. Thank-you very much!
Topics: Canadian Bankruptcy, Canadian Bankruptcy Help, Canadian Bankruptcy Services, Canadian Financial Help | No Comments »
How to declare Bankruptcy in Canada.
By bankruptcy-services
Bankruptcy in Canada is on the rise, leaving many Canadians wondering how to declare bankruptcy in Canada.
Here are the first steps in declaring personal bankruptcy in Canada.
* meet with a licensed Bankruptcy Trustee for an initial assessment
* file an assignment in bankruptcy with the Official Receiver
* attend an examination by an Official Receiver, if required
* attend a meeting or meetings of creditors
* attend first and second counselling sessions
* in some cases, apply to the Court for a Discharge from Bankruptcy
Let’s answer some of the Bankruptct questions you might have
Who is a “Trustee in Bankruptcy”?
A Trustee is an individual or a corporation licensed by the government of Canada to conduct the bankruptcy process. A Trustee is not a lawyer, but you can ask for advice about certain Canadian bankruptcy matters as long as you understand that you are not a “client” of the Trustee.
A Trustee is paid by the bankrupt and from the assets of the estate. If there are no available assets, the Trustee looks to the bankrupt for payment of fees and costs. The Bankruptcy and Insolvency Act of Canada sets out the Trustee’s fees for both a summary administration and a consumer proposal. A Trustee cannot be discharged without approval from the Court or the Official Receiver, who reviews the statement of receipts and disbursements, including the Trustee’s fees and costs.
Who does the Trustee work for?
The Trustee is chosen by the bankrupt. However, the Trustee remains an officer of the Court, with an obligation to look after the creditors’ rights and to investigate the affairs of the bankrupt as required. The Trustee also ensures that the rights of the bankrupt, as defined by the Bankruptcy and Insolvency Act, are not abused. The primary duties of a Trustee are:
* review your financial situation and counsel you on the alternatives available
* administer the proposal, or liquidate your non-exempt assets and turn them into cash for distribution to creditors
* administer the bankrupt estate or proposal from beginning to end according to the Bankruptcy and Insolvency Act
Do I have certain duties as a bankrupt?
The bankrupt’s duties are listed in Section 158 of the Bankruptcy and Insolvency Act of Canada. Read the section carefully and comply with its requirements. You must confirm in writing that you clearly understand your duties as a bankrupt.
The bankrupt’s primary duties are:
* disclose all of your assets and liabilities to the Trustee
* advise the Trustee of any property disposed of in the past year
* surrender all credit cards to the Trustee
* attend an examination before the Official Receiver, if required
* attend the first meeting of creditors (if a meeting is requested by the creditors)
* advise the Trustee in writing of any address changes
* generally assist the Trustee in administering the estate
What happens to my wages during bankruptcy?
Wage assignments and garnishments are stopped once bankruptcy is declared.
The Trustee reviews the amount of your wages and your living expenses. Your income is then compared to guidelines set out annually by the Superintendent of Bankruptcy. These guidelines take into account the amount of household income and the number of dependents. A copy of the guidelines is available from the Trustee. The Trustee will also supply a monthly income and expense statement form for you to fill out and submit. If you have surplus household income, a portion may have to be paid to your creditors through the Trustee.
Will all of my assets be assigned to the Trustee?
The only assets not assigned to the Trustee for distribution to your creditors are those exempted by provincial law. Discuss this matter with the Trustee. Be sure that all of your assets declared under oath to the Trustee are fully disclosed and properly valued.
Your assets include all existing assets as well as those that may be acquired prior to your discharge. Once you have filed an assignment you cannot dispose of any assets assigned to the Trustee.
A list of provincial exemptions is included in the section Bankruptcy Rules by Province.
What about my secured creditors?
In most cases, bankruptcies and consumer proposals do not affect the rights of secured creditors. If a creditor has a valid security against your property (i.e., car or house), consult with the Trustee about surrendering the asset and obtaining a receipt. If you can afford monthly payments, financial arrangements may be made with the secured creditor.
What happens at an examination by the Official Receiver?
Shortly after filing for bankruptcy, you may be examined under oath by an Official Receiver, who is a Deputy of the Superintendent of Bankruptcy. The purpose of this examination is to determine the causes of your bankruptcy, the disposition of any past assets and the status of present assets. Your conduct is also reviewed.
What happens at the first meeting of creditors?
A meeting of creditors may be called if requested by your creditors. The purpose of this meeting is to:
* confirm the appointment of the Trustee
* appoint up to five inspectors who supervise the administration of the bankrupt estate, including approval of the Trustee’s statement of receipts and disbursements
* allow creditors to obtain information about the bankruptcy
* allow creditors to give directions to the Trustee
The quorum for the creditors’ meeting is one creditor with a proven claim. If there is no quorum, the Trustee is automatically confirmed. The bankrupt is expected to attend the first and any subsequent meetings of creditors. If the bankrupt is unable to attend, written notice must be sent to the Trustee. Failure to attend the creditors’ meeting without a reasonable excuse could be considered an offense under the Bankruptcy and Insolvency Act.
Who prepares my tax returns?
You must supply the Trustee with documents to complete two income tax returns during the year in which a bankruptcy occurs. A pre-bankruptcy income tax return must be filed for the period from January 1 to the date of bankruptcy. A post-bankruptcy income tax return must be filed for the period from the date of bankruptcy to December 31.
Income tax refunds from prior years are an asset of the bankrupt estate and must be sent to the Trustee. The Trustee may request that refunds from the post-bankruptcy return be paid to the creditors. Income taxes owing prior to the bankruptcy are discharged. Any amount owing on the post-bankruptcy tax return must be paid by the bankrupt.
When will I get my Discharge from Bankruptcy?
A first-time bankrupt is automatically granted a discharge nine months after filing bankruptcy unless a creditor, the Trustee, or the Official Receiver objects. If you are granted an automatic discharge, there is no court hearing and the Trustee sends you a copy of the discharge.
If this is not your first bankruptcy or if your discharge is opposed, the Trustee sends a discharge application to the Court. You will be advised by the Trustee if you are required to appear in Court for the discharge hearing. At the hearing, the Trustee’s report informs the Court of the circumstances surrounding your bankruptcy. The Court will choose one of the following discharge alternatives:
Absolute Discharge: You are no longer responsible for unsecured debts incurred prior to bankruptcy except for those in Section 178 of the Bankruptcy and Insolvency Act.
Conditional Discharge: You may be required to pay a certain amount of money to your creditors through the Trustee for a specified period (e.g., $100 per month for 24 months). Your discharge is subject to fulfilling the terms and conditions of the order. An absolute discharge will be granted when the specified conditions are fulfilled.
Suspended Discharge: This could be an absolute discharge but there is a delay before it comes into effect or is reviewed again by the Court.
Discharge Refused: The Court has the right to refuse a discharge in unusual circumstances. A discharge application may be refused if any of the following are reported to the Court:
* your assets are less than 50% of the amount owed to unsecured creditors
* you continued to obtain credit while unable to pay all of your existing creditors
* you failed to account for any disposal of assets
* you contributed to bankruptcy by rash speculation, extravagant living or gambling
* you gave preferential treatment to any creditor within three months preceding the date of bankruptcy
* you failed to perform any duty imposed by the Bankruptcy and Insolvency Act
Any of your creditors may object to the application for discharge. If the discharge is opposed, the hearing date will be adjourned automatically. At the next hearing, evidence will be given by both the bankrupt and the opposing creditor. The court then grants one of the discharge orders listed above.
Which of my debts are not discharged by bankruptcy?
Debts that are not discharged by bankruptcy are outlined in Section 178 of the Bankruptcy and Insolvency Act. These include:
* student loans, if it is less than two years since your schooling finished
* fine or penalty imposed by the Court
* alimony
* liability for dividend to an undisclosed creditor
* debt obtained by fraud
* liability for support or maintenance of spouse or child under an agreement or Court Order
Also, if you wish to retain an asset that is pledged to a creditor, you must pay the creditor the amount owing, in most cases.
Declaring Bankruptcy is Canada can be a frustrating experience. For even more information go to the
Office of the Superintendent of Bankruptcy
Topics: Canadian Bankruptcy, Canadian Bankruptcy Help, Canadian Bankruptcy Services, Canadian Financial Help, bankruptcy | No Comments »
Bankruptcy help for Canadians
By bankruptcy-services
Bankruptcy help for Canadians is now just a click away. Bankruptcy Services Canada was built for Canadians that are thinking about declaring bankruptcy, are about to claim they are bankrupt or for those that have already declared Bankruptcy and are looking to rebuilt their credit.
Bankruptcy in Canada is on the rise. As more and more people fall victim to an overpriced housing marketing, the economic downturn or simply a lack of fiscal responsibility, we found it necessary to create a website to answer all those Canadian Bankruptcy questions
With the economy and the housing market the way it is, we realized that many Canadians need our help. This site is for you!
Topics: Canadian Bankruptcy, Canadian Bankruptcy Help, Canadian Bankruptcy Services, Canadian Financial Help, bankruptcy | No Comments »