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Kitchener Ontario Personal Bankruptcy Blog provides free personal bankruptcy information and helps Kitchener residents dealing with their debt. |
Below are the most recent personal bankruptcy questions. Be sure to check out our Frequently Asked Questions page for answers to more common questions about personal bankruptcy in Kitchener. Remember, you can always post an anonymous question, as well as arrange for a free consultation with a personal bankruptcy expert near you. |
Recent Bankruptcy Questions:
On Saturday November 18 at noon I will be appearing LIVE on Ask the Experts on 570 News to answer bankruptcy questions. My goal will be to answer the top 50 questions during the show. Since there is a newscast at noon and 12:30, the show lasts for about 50 minutes, so my goal will be to answer 50 questions in 50 minutes, so please tune in to get answers, or call in with your questions and I will answer them live on the air.
That's noon on November 18 on 570 News, or listen live on the internet at www.570news.com
Before someone files bankruptcy they should ensure they understand their duties as a bankrupt as outlined in the Bankruptcy and Insolvency Act. These duties apply to both individuals and directors/officers of corporations. Below is a summary of the duties:
a) disclose and deliver all assets they own or are in control of - there are some assets (to certain dollar value depending on province - see Ontario limits here) that are exempt form seizure of a trustee, such as household goods, personal effects, vehicle, tools of the trade, and some insurance contracts;
a.1)deliver to trustee, for cancellation, all credit cards issued and have in possession;
b) deliver to trustee all required books, records, and documents relating to property and affairs; c) if specifically required, attend for an examination under oath to answer questions regarding conduct, cause of insolvency, and disposition of property;
d) prepare a statement of affairs detailing assets, liabilities and other prudent information, which then is sworn to be a true statement;
e) assist trustee with making a list of inventory of assets;
f) disclose to the trustee all property disposed of within the period of one year before the date of the initial bankrupt event;
g) disclose to the trustee all property disposed of by gift or settlement without adequate valuable consideration within 5 years prior to the date of the initial bankrupt event;
h) attend the first meeting of creditors if a meeting is called;
i) when required, attend other meetings with creditors or inspectors, or attend for trustee;
j) attend other examinations under oath with respect to property or affairs as required;
k) aid with trustee in realization of non-exempt property and the distributions of proceeds among creditors;
l) execute any powers of attorney, transfer, deeds and instruments or acts that may be required;
m) review creditors proof of claims if trustee requests;
n) if you are ware that someone filed a false claim, disclose this immediately to trustee;
n.1)inform the trustee of any material change in bankrupt's financial situation;
o) generally do all such things as a reasonable given situation with consideration for the law;
p) keep trustee appraised of the bankrupt's location at least until estate is completed.
This list may seem overwhelming, but in general, the Bankruptcy and Insolvency Act is there to give the honest but misfortunate debtor a fresh start, so this section ensures that someone acts honestly and in good faith.
More details can be obtained at the Office of Superintendent of Bankruptcy's website.
To discuss these duties and your financial situation, please call us at 310-PLAN or e-mail us.
Every month I meet with a number of people in Kitchener who are retired, and have more debt than they can handle, and they want to know if they should file for personal bankruptcy.
Retired residents of Kitchener on a fixed income are in a difficult position. They worked their entire lives, but now find themselves on a reduced income. The cost of living increases faster than their fixed income pensions, and they find it hard to keep up. They use their credit cards to pay the bills, and after a few years they have accumulated more debt than they can ever hope to repay.
I always start these meetings by explaining their options. They can start by asking family for help, which is usually a difficult decision. They can sell off any assets they no longer need, such as a car they don't drive, or a house that is larger than they need.
If they have a large pension they could investigate a debt consolidation loan to reduce their monthly payments. If their income is not high enough to make debt repayments, they could investigate various bankruptcy alternatives, including talking to a local credit counselor about a debt management plan. A consumer proposal is another option.
Of course personal bankruptcy is also an option, but in many cases it is not legally necessary.
Personal bankruptcy is often referred to as bankruptcy protection because once you go bankrupt your credit card and bank loan lenders cannot garnishee your wages. But if you are retired and your income is from pensions, you don't have any wages to garnishee, so a bankruptcy may not be necessary.
If you open a new bank account at a new bank, it is possible that the creditors will not take any further action.
Of course getting phone calls is very stressful, so many older people decide to declare bankruptcy in Kitchener anyway, just for stress relief. That's fine, as long as your realize that you are going bankrupt more for stress relief than to receive legal protection from your creditors.
There are of course other factors to consider, both emotional and financial, so if you are someone you know is retired and having financial problems, please give our Kitchener bankruptcy office a call at 519-747-0660 or 310-PLAN, or e-mail us, and we will set up a no cost meeting to review your options in more detail.
At Hoyes, Michalos & Associates in Kitchener-Waterloo we meet with and help individuals that have a variety of financial difficulties. Sometimes, there are cases that have added technical issues that need to be resolved before we can put a solution in place to sort out their finances. For example, if the Canada Revenue Agency (CRA) has registered a lien on a person's home this needs to be investigated before a plan is developed. Similarly, if a person has arrears with the Family Responsibility Office (FRO) we need to address this before creating a plan.
This blog will outline some of the issues involved with respect to CRA and liens (see next week's blog to discuss FRO support arrears). General information is provided below - if you would like to discuss your specific situation please contact us via e-mail or at 519-747-0660.
CRA (formally Revenue Canada) has significant collections power legislated to them to collect tax related debts. They include simple collection calls, to garnishment of wages, to seizure of bank accounts, and even to registering on title on property. The method CRA selects to use to collect a debt varies depending on the type of debt, the amount owed, the nature of the situation, etc.
When it comes to tax related debts, understanding and dealing with them should always be a priority given the significant collection powers that CRA has. Do not ignore them, tax debts do not go away.
I have met with several individuals lately where CRA has registered a lien on their house. This effectively puts CRA right behind the mortgagor for the proceeds on the sale or refinancing of the house. Once a registration occurs, it cannot simply be removed through a personal bankruptcy (or proposal pursuant to the Bankruptcy & Insolvency Act).
If you have tax debts and having trouble dealing with them, we encourage you to seek help and understand your options. To book a free consultation call us at 519-747-0660 or e-mail us.
I am pleased to announce that we have added more information to the bankruptcy-kitchener.com web site. Check our our new articles on personal bankruptcy in Kitchener and Kitchener’s number one bankruptcy alternative, consumer proposals.
We also have information about the cost of bankruptcy in Kitchener, and how to choose a Kitchener Waterloo Bankruptcy Trustee.
If you want more information about bankruptcy in Kitchener, we encourage you to post an anonymous question to this Kitchener bankruptcy blog, or better yet, e-mail us a question directly for a personal answer. Thanks for reading.
Tagged as bankruptcy Kitchener, personal bankruptcy, and bankruptcy
On Saturday July 29, 2006, Ted Michalos & myself were guests on the Ask the Expert Show on AM 570 News in Kitchener, Ontario. This one hour show was dedicated to talking about "Tax Debt: What Can You Do If You Owe Money to the Government" as part of Hoyes, Michalos & Associates' "Your Summer Survival Plan - A Radio Series on Dealing with Debt in Ontario". On the show we discussed the types of tax debt and the various plans to deal with tax debts.
As a result of the show, we have received various calls from individuals living in Kitchener, Waterloo, Guelph, Cambridge and other areas. Although each of their situations were different, they did have a common element - they all had tax debts and were having trouble dealing with them. Some examples of the calls are: - self-employed individuals owing GST, Source Deductions, and personal tax;
- pensioners owing taxes for the first time in their lives as their pensions did not have enough taxes taken off resulting in tax debts too large to manage on a fixed income;
- individuals who have cashed out their RRSP's as an attempt to get their other debts under control, only to find that not enough taxes were taken off and now they have a large tax debt; and
- employees working more than one job just to make ends only to find out they have a tax debt at the end of the year due to working the multiple jobs.
Many individuals have the notion that tax debts are different from their other debts and have special rights - this is only partially true. Tax debt is governed by tax laws, there are special rules, and in addition, the Canada Revenue Agency (CRA - or formally Revenue Canada) has significant collection powers compared to other creditors. However, when it comes to a consumer proposal or personal bankruptcy, taxes are generally dischargeable debts (ie they go away upon completion of the procedure) just like your credit cards, bank loans, or other unsecured debts.
When it comes to tax related debts, your options for dealing with them remain the same. You can pay off the debts (through cash on hand, payment plan with CRA, sale of assets, borrowing, or other personal options available), file an notice of objection/appeal on the assessment, apply to the CRA's fairness program to reduce the penalties and interest, or file under the Bankruptcy and Insolvency Act for a consumer proposal or personal bankruptcy.
If you are experiencing financial difficulty with your tax related or other debts and would like to discuss your options in detail, please call Hoyes, Michalos & Associates at 310-PLAN or e-mail us a question. We have offices throughout Ontario that are available to work with you.
As discussed in my previous post, this morning I appeared live on 570 News for a one hour Ask the Experts broadcast with Theresa Yates, a mortgage consultant with Mortgage Intelligence in Kitchener, Ontario who specializes in finding mortgages for people with less than perfect credit.
The title of the radio show was What Can You Do If You Own a Home and Have Money Problems, and Theresa made a number of good points on the show.
She commented that if you have a lot of high interest rate debt, like credit cards, but you also own a home that is worth more than is owing on the mortgage, it may be possible to borrow against the value of your home to reduce your monthly payments. This makes sense, because mortgage rates are a lot less than the 18% to 25% you might be paying on credit cards. Refinancing is obviously a better alternative than going bankrupt, which is why if you own a home with substantial equity we always suggest considering the re-financing option.
She also mentioned that it is possible to get a mortgage very soon after you have been discharged from personal bankruptcy, provided you have at least a 10% down payment (more is better) and a good source of income. That's good news for people who want to rebuild their credit as soon as possible.
She even discussed the possibility of re-financing a mortgage as part of a consumer proposal. There are a number of conditions that must be met, so a consultation with Theresa is necessary to see if you qualify.
We closed the show by commenting that there are many different solutions to financial problems. A consumer proposal or a personal bankruptcy may be a solution, but if you own your own home re-financing your mortgage may also be a step towards solving your financial problems.
For more information, you can e-mail Hoyes Michalos, or you can contact Theresa directly at www.mortgageintelligence.ca/theresayates.
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