Posted on Monday, January 23, 2006How long does it take to get my credit back after bankruptcy?Most of the people I meet with ask me: "How long does it take to get my credit back after my bankruptcy or consumer proposal is over?" There are two answers to this question.First, your credit report will have a record of your bankruptcy for a minimum of six years after you are discharged; a proposal remains on your credit report for a minimum of three years after you have completed all of your payments. This means that if you apply for a loan or credit card during these time periods, the lender will know that you went bankrupt or filed a proposal, which may make it more difficult to borrow. The second answer is that your credit report is only one factor in your ability to borrow. Other factors include your income, a co-signor, and the amount of your down payment or security deposit. If you can demonstrate that you have learned how to handle money, you will repair your credit relatively quickly. My advice is to start saving money. Once your bankruptcy or proposal is over, and you have some savings to use as an emergency fund, consider using some of your savings to get a secured credit card. Next, you may consider contributing to an RRSP to demonstrate you can handle money. Your additional savings can be used as a down payment on a car, or even for a mortgage on a house. How quickly you repair your credit depends on you, and your ability to save money. Please contact one of our professionals for more information, and for advice on your specific situation. Posted by J. Douglas Hoyes, CA, Trustee @ 7:13 AM
Posted on Thursday, January 19, 2006I filed for bankruptcy a short time ago and now I have changed my mind. What can I do?Bankruptcy is a legal action under the Bankruptcy and Insolvency Act and once you have signed the paperwork and it has been filed with the Official Receiver, the trustee is appointed. If you change your mind once the trustee is appointed, there has to be an application made to court to show the bankruptcy should not have occurred. Just changing your mind would not be good enough reason to annul the bankruptcy if you are insolvent.A court case in 2005 confirmed the reasons a bankruptcy might be annulled by a court would be abuse of the process and the debtor's motive in filing. The following questions are reviewed by the court if there is an application made for annulment of a bankruptcy and the answers will influence if the court will approve an annulment: - Was the debtor's financial situation genuinely overwhelming or could it have been managed? - What is the timing of the assignment? Was it related to another agenda or what bankruptcy inevitable in the near future? - Was the debtor forthcoming in revealing their situation to the creditors? - Did the debtor convert money or assets to himself/herself that could have been assets in a bankruptcy? - Could the creditors have assisted the debtor by granting terms of repayment or time? - Were there any other relationships that could cast light on a possible bad faith motive for making an assignment? If you are thinking of filing for bankruptcy, contact us; today to talk with one of our professionals who will meet with you personally and review your unique situation and discuss the consumer proposal and bankruptcy and other options in detail so you can make an informed decision. Posted by Norma Yau, Trustee @ 11:24 AM
Posted on Thursday, January 05, 2006What is Surplus Income?If you are bankrupt in Canada, you are required to make a payment to your bankruptcy estate each month. The more you make, the more you are required to pay each month. Each month that you are bankrupt you will send your trustee copies of your pay stubs and proof of any other income you have (such as child tax credits, pensions, or unemployment insurance), and based on your income the trustee calculates how much you are required to contribute to your estate.The government allows you to earn a certain amount; if you earn more than that amount a portion of your surplus income is contributed to your estate. If you are off sick during the month you may end up paying less; if you work overtime you may be required to pay more. The calculation is somewhat complicated, so we have created a surplus income worksheet to explain the calculation in more detail. You can enter your income information and determine how much you would be required to pay if you go bankrupt. In addition to the surplus income payment, there is also a base contribution required each month. Please contact us for more information. One of our associates would be pleased to help you with the calculation so that you can determine how much you would be required to pay if you go bankrupt. If your surplus income is more than you can afford each month, a consumer proposal may be a better option. Contact us for more information. Posted by J. Douglas Hoyes, CA, Trustee @ 8:44 AM
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