Posted on Tuesday, December 20, 2005What happens if I have not treated my creditors equally?In my last entry I discussed the importance of treating all creditors equally prior to filing a bankruptcy or proposal when making payments to them. The Bankruptcy and Insolvency Act is designed to be an open and transparent process where all creditors are treated equally before and after the bankruptcy or proposal process has started.When you file for bankruptcy or a proposal you will be asked if you made excess payments to any of your creditors. This is asking if you paid one of your creditors more money than the others (more than the minimum payments) or if you paid one of them and ignored the rest of them. This is called preferring a creditor and means you have not treated your creditors equally. If you have done this, depending on whom you paid, the trustee can contact that creditor and request that the funds be returned or in some situations request that you pay that same amount of monies into the bankruptcy or proposal. Depending on the creditor paid, the trustee can go back up to one year to retrieve the payments. If you are experiencing difficulties in paying all your creditors or are starting to use funds from one creditor to pay another, please e-mail us or call us at 310-PLAN to discuss your situation. Posted by Norma Yau, Trustee @ 5:45 PM
Posted on Tuesday, December 13, 2005Do I really lose everything if I declare bankruptcy? AN UPDATEEffective December 14, 2005, the Province of Ontario has amended the limits on the amounts for certain assets which are exempt from seizure by a trustee in a bankruptcy. The increases basically allow for inflation as the amounts have not changed in the last 5 years. The new values are:$5,650 worth of personal possessions (clothing, jewelry, sports equipment, etc.); $5,650 worth of motor vehicles (cars, trucks etc.); $11,300 worth of furnishings; $11,300 worth of tools of the trade (equipment that you use to earn a living); and certain types of life insurance. In addition, when the new Bankruptcy rules come into effect during the summer of 2006, RRSPs will also be protected, but there are exceptions - for more details visit our website. Every person has their own unique set of circumstances. If you find yourself in financial difficulty and would like advice on this subject matter call or email us so that we can meet with you to work out a plan. We can advise you as to how these rules will impact you; we can help you make the right decision. Posted by Benny Mendlowitz, CA CIRP, Trustee @ 9:52 PM
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