If I Declare Bankruptcy can I be a Director?

BankruptcyIf I Declare Bankruptcy can I be a Director?

Under the Ontario Business Corporations Act, you are not allowed to be a director of a corporation while you are in the bankruptcy process. During the period from the date when you sign the initial bankruptcy papers to the date when you are discharged from your bankruptcy, you must not be a director of any corporation, whether for profit or not. If you are a director of your church via a Not-For-Profit corporation, you should resign your position as a director. As soon as you are discharged from your bankruptcy, you may become a director again. Note that this does not apply if you are filing a Consumer Proposal – it only applies to a bankruptcy.

When you file an Assignment in Bankruptcy, you must assume that your creditors will do a computer search within their bank system. If you are a director of your church, a letter will be sent to the church by your creditor requesting clarification of your status. In extreme circumstances – if your church has a bank loan, the bank may reduce the authorized total loan available to the church or ask that the loan be paid off. Unfortunately, the letter will be sent to the person at the church who normally deals with banking matters. It may or not be you.

Discussing this with your trustee before you file the bankruptcy papers will save on the embarrassment later.

 

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

Read more from our blog

Financial Aid(CERB) & the COVID-19 Crisis

What is the Canada Emergency Response Benefit (CERB)? This is a federal financial aid option to help business owners, employees, and self-employed get much-needed financial

Covid-19 and Flexibility for Taxpayers

The government of Canada is taking action in order to provide assistance and flexibility to Canadians facing hardship due to the Covid-19 virus. Not only