The government is full of surprises. On July 7, 2009, in a surprise announcement, the Minister of Labour broke with precedent, and instead of announcing when the new bankruptcy rules would come into force, he simply signed an Order in Council to implement only three of the rules contained in new bankruptcy legislation:
Former students in financial difficulty will be pleased to learn that, if they go bankrupt, student loans will be automatically discharged if the bankrupt has been out of school for at least seven years. The previous rule was a ten year waiting period, so this will have a significant impact on many former students.
Under the old rules many RRSPs were non-exempt, meaning they would be seized by the trustee in the event of bankruptcy. Under the new rules, RRSPs are exempt from seizure, except to the extent of contributions over the previous year.
While the first two changes were helpful to bankrupts, under the third change a bankrupt now automatically loses their tax refund for the entire year of bankruptcy (not just for the prior years and the year up to the date of bankruptcy).
Then, in another surprise announcement, the remainder of the new rules were proclaimed into force on September 18, 2009. More details can be found on our bankruptcy update page.
These new rules were implemented quickly, and our team of professionals continues to review the changes. How will they affect you? Contact our office today by completing the following form, and we will contact you within two hours during normal business hours, or call us now at 310-PLAN:
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