Posted on Monday, February 27, 2006Do I have to go to court if I file for bankruptcy?The Bankruptcy and Insolvency Act enables a first time bankrupt to be discharged without going to court. If the bankrupt completes his duties, makes the required payments, and co-operates with the trustee, and no one opposes the discharge, a discharge will occur automatically after nine months.If however, the bankrupt does not complete his duties or his payments, the trustee will oppose the discharge and unless the issues can be completed within the nine months, the bankrupt will be required to attend a discharge hearing at court sometime after the nine months. A creditor can also oppose a bankrupt's discharge and in this case, the bankrupt will be required to attend the discharge hearing unless the creditor withdraws the opposition. At the court hearing the Registrar, a person who is like a judge, will make the decision as to what type of discharge the bankrupt will receive. The decision will be based on the facts and documents presented at the hearing. The trustee does not act for the bankrupt at this hearing, as sometimes they have opposed the bankrupt's discharge, and do not act even when it is a creditor who has opposed the discharge. In some locations, second time bankrupts are required to attend a court hearing. As the bankrupt is usually aware of the circumstances as to why the discharge hearing is called, it is their decision as to whether they will obtain legal representation for the discharge hearing. At Hoyes Michalos we will explain your duties in full before you go bankrupt, and if a court hearing is required we will explain in detail what will happen at the hearing. Obviously it is in everyone's best interests if you can complete your duties during the bankruptcy period, and then a court hearing will not be required. Posted by Norma Yau, Trustee @ 5:11 PM
Posted on Friday, February 17, 20062005 was a record year for bankruptcy in CanadaIn 2005, for the first time in Canadian history, more than 100,000 Canadians filed a personal bankruptcy or consumer proposal. That means that if you were in a room with 250 Canadian adults, statistically one of them went bankrupt last year.Why is the bankruptcy rate so high? One reason is that Canadians are carrying the highest level of personal debt in Canadian history. The average Canadian now owes 118% of what they earned last year, the highest level ever. As long as interest rates stay low and there are no unpleasant surprises, most people can afford to make their monthly payments. For families at their limit, however, a high debt-to-income ratio means they are less able to deal with life's unexpected financial traumas. Every day I meet with people who have gone through a job loss, reduced overtime, a marriage break up, or even a medical problem that prevents them from working. When your debts are high, any unexpected life event can cause severe financial distress. Our research indicates that the personal bankruptcy rate in Canada will continue to increase. We are predicting a growth in consumer insolvencies of 3 to 5% over the next two years. Every 1% increase means another 1,000 people and families dealing with financial hardship. If you want more information, read our six page Special Report, 100,000+ Consumer Insolvencies in 2005: Many Canadians Teetering on the Brink of Financial Distress by Hoyes-Michalos. You can find more information at these links:
Posted by J. Douglas Hoyes, CA, Trustee @ 6:53 PM
Posted on Friday, February 10, 2006I want to buy a home. Will bankruptcy give me that fresh start? Or is there a better option?I met with an individual yesterday who had accumulated large credit card debts as a result of circumstances beyond their control; they had been laid off for over a year, and used credit cards to get by. They had just found a new job but were worried that it would take them forever to repay their credit cards. This would then prevent them from saving for and buying the home they had dreamed of. They wanted to know if they could declare personal bankruptcy to clear the debts and then start saving for the home.My answer to them was "bankruptcy is an option, but there is another option". Bankruptcies are monitored by the Federal government, and they remain permanently in the Federal Government's Insolvency Name Search database. In the future if he fills out a credit application or job application that has the question "Have you ever been bankrupt?", the answer will always be "yes". Thus even though a bankruptcy disappears from your credit report after 7 years, it remains in the government's records forever. The solution in this case is a consumer proposal. With the new job, they have the ability to make a deal with their creditors, partially repay their debts, have the balance wiped out, and get a fresh start without having to file for bankruptcy. Everyone's personal situation is different; one of our professionals at Hoyes, Michalos can evaluate your specific fact situation. If you would like more information about this option, call or email us so that we can meet with you to work out a plan. Posted by Benny Mendlowitz, CA CIRP, Trustee @ 8:06 AM
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