Hi there and welcome back to Understanding
Personal Bankruptcy in Canada, the fifth and final video of the Five Video introduction
series. Today we will discuss what debts are discharged in a bankruptcy, and getting the
advice from people like moneyandbusiness.ca and a trustee in bankruptcy, and finally how
to declare personal bankruptcy or file a consumer proposal. This video discusses the kinds of debts that
are discharged in a personal bankruptcy and the kinds of debts that are not discharged.
This second section deals with getting advice from a Trustee in Bankruptcy, and the last
section deals with how to declare personal bankruptcy in Canada. All Unsecured Loans can be included and this
includes all Credit Cards, any Overdrafts and personal Lines of Credit. If there was
a business loan that was personally guaranteed, then that loan can be included here as well.
Payday Loans can also be included, however, since a wage garnishment clause may have been
enacted, then the bankruptcy process may have to be started to stop the procession of the
wage garnishment process. All student loans that have been completed
seven years from the date the student ceased to be a student, can be included in a bankruptcy.
In some cases, if a person can prove a hardship case, then student loans can be included for
up to five years after the student ceased to be a student.
Sometimes a sole proprietorship or corporate tax may be included in the bankruptcy if the
director or all directors go bankrupt. However CPP or EI premiums are not included.
The above is general advice and all cases are case specific. So what about cosign loans or joint lines
of credit? If one party goes bankrupt then the financial
institution will call the loan. Calling a loan means they require the full amount immediately
from the other person. In some cases this may force the cosigner
to declare bankruptcy as well. Your mortgage can be voluntarily included
in a bankruptcy or if there is equity in it your trustee will require the equity of the
home. There is no difference between a secured loan
and an unsecured loan in the personal bankruptcy. Secured Loans can include a house, car, boat
and cottage. Both can be included. Utility bills such as gas, electricity, water,
home phones, cellular phones, and Internet bills can be included in your bankruptcy.
However this is not recommended as these services will still be required.
Is recommended to try and pay these off and keep these accounts in good standing. So what debts are NOT discharged in a personal
bankruptcy? These include fines, support payments, alimony or any other court appointed payments. So, where can you get advice on how to move
forward? You can use services such as moneyandbusiness.ca
which provides the advice of those who are previously gone bankrupt.
From such people you would learn many little things a trustee would not tell you.
Even though such advice is in good faith, it will have its limitations. If you do decide to go personally bankrupt
then we strongly suggest that you get the e-book entitled “5 Things to Do Before Declaring
Personally Bankrupt in Canada” written by moneyandbusiness.ca and includes advice from
those who have previously declared bankrupt. it contains five suggestions and eight sub
suggestions that will make your life easier after bankruptcy. This eBook is free as described
later in this video. However this advice must be needed BEFORE
the bankruptcy process. However ultimately, you will need to speak
to a trustee in bankruptcy. A trustee in bankruptcy is the only legal
person to assist you with this process and is licensed by the government of Canada.
They are the only people to answer hard questions such as if your home will be kept or what
other assets may have to be given up. However before you meet your trustee, try
to understand that person. Your trustee in bankruptcy is there to take
all of your assets and sell them, and take the proceeds and distribute them among the
creditors. The trustee is a go-between you, your creditors,
and the government of Canada and is governed by the Bankruptcy and Insolvency Act. A trustee in bankruptcy is governed by a code
of conduct and most of the trustees are highly professional people. However like every other
profession they are those that are guilty of improper conduct and can be suspended from
performing their duties. There are many stories of incorrectly filed bankruptcy proceedings
that have left the bankrupt in financial hell afterward.
So how do you find a good trustee in bankruptcy? You can take a risk and walk into any office
that advertises bankruptcy services, or you can let people like moneyandbusiness.ca recommend
one for you. The eBook “5 Things to Do Before Declaring
Personally Bankrupt in Canada” is free to anyone who uses the recommendations of MoneyandBusinss.ca
for their Trustee. Now comes the big question. How do a person
declare bankruptcy or file a proposal? Firsts, do what you have started and get answers
to common questions. Secondly you should speak to a trustee in
bankruptcy and get specific answers than what is provided here.
Note that some trustees may not provide full information as they wait for the documents
to be signed first. This is the reason why moneyandbusiness.ca has formulated this five
video series to better inform you before a trustee is met.
If you do decide to go bankrupt, stop paying all bills for 3 months, and save the money
that would have paid in bills for these 3 months, and use this to pay your trustee. From 60 days and onwards creditors will begin
to call. Ignore them. After 90 Days legal action including wage garnishment and asset
seizures can begin. After three months of no bill payments go
back to the trustee that we have recommended and file documents for bankruptcy or a consumer
proposal. If any creditors call afterward give them
the name of the trustee and have the creditors contact the trustee. After a while the phone
calls will stop. And in summary, most kinds of Debts are discharged
with the exception of fines, alimony, support payments and other court defined the payments.
After bills have been an array for three months, a bankruptcy or a consumer proposal can be
filed. A consultation with a trustee in bankruptcy
must be used to start the process. You can take a risk in using a random trustee
or have moneyandbusiness.ca recommend one for you. And in summary, most kinds of Debts are discharged
with the exception of fines, alimony, support payments and other court defined the payments.
After bills have been an array for three months, a bankruptcy or a consumer proposal can be
filed. A consultation with a trustee in bankruptcy
must be used to start the process. You can take a risk in using a random trustee
or have moneyandbusiness.ca recommend one for you.