Category: Bankruptcy Discharge

Bankruptcy in Ontario: Do I attend Court?

Posted on by Jordan Rumanek

Do I have to attend Court?

When you file for bankruptcy in Ontario you can avoid going to court providing that you complete all of your duties that your trustee assigns to you, those duties include:

  • Make the payments to your trustee
  • You must attend two debt counselling sessions in the time required (the 1st counseling session has to be done within 60 days of filing and the 2nd counselling session within 210 days of filing but more than 30 days after the first counselling session
  •  You must provide the trustee with all of the required information to file your income taxes for the year of your bankruptcy
  • Every month while you are bankrupt, you must provide your trustee with income & expense statements and include your pay stubs or other proof of income.
  • You must pay the required surplus payments to your trustee

Also in a bankruptcy in Ontario you will have to go to court if:

  •  a creditor opposes your discharge
  •  if you have tax debts over $250,000 or representing 75% of your total debt
  • if your debts were the result of gambling addiction or other addiction
  • if the duties are not completed

When you go, it is then up to the Court to decide: they could suspend your discharge (extend it) and order you to pay off a portion or all of your debt. If you go to court because duties were not complete you will not get your discharge until you have completed all of the duties.

A good way to avoid court would be to file a consumer proposal in Ontario. In a consumer proposal you can avoid court all together as long as your creditors and the court agree to your consumer proposal.

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

Two Types of Collection Agencies

Posted on by Jordan Rumanek

Collection Agencies

Two Types of Collection Agencies

There are two types of collectors: Third party and first party.

Third party collectors are collecting on behalf of the original creditor, like the bank or a dentist. The legislation and all of the rules about collections, e.g. when they are allowed to call, apply to them.

First party collectors actually purchase accounts from creditors (or other collectors) so that they own the debt. In other words, the bank or the dentist is no longer owed anything. Now the money is owed to the first-party collector. The rules do not apply to them. They can call whenever they like, as often as they like. They can call relatives and employers, at midnight if they want.

First party collectors are usually more aggressive and more difficult to deal with. If you are being harassed by a collector, try to find out if they have purchased the debt, or if they are acting on behalf of a bank (or a dentist). This will tell you if they are breaking the rules or if they are within their rights.  If they have, in fact,  purchased the debt, you may wish to talk to a Trustee in Bankruptcy to talk about your options.

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.  

Student Bankruptcy Story #14

Posted on by Jordan Rumanek

Morgan was an 18 year old university student.  She had a part time job and got a student overdraft just to get her through the difficult weeks.  The part time job enabled her to save up so her student loan didn’t get too large and she was able to pay for some of the fees herself each year.  In her second year she got a bank loan to allow her to get a car.  The overdraft was interest free so she used that to help pay back the loan.  In her third year she got a credit card to help pay for books and when she moved into a new apartment after she graduated she used it buy furniture.

Morgan got a job at the end of her Honours Degree but by this time needed a new car and a new wardrobe for the corporate world.  The bank approved a $10,000 loan.  There was no problem getting a loan now that she was working.  However, the combined loans were now about $21,000 with unmanageable monthly repayments.  Her student loan was about $7,000 and came out of her pay regularly.  Unfortunately, Morgan lost her job after a few months and was no longer able to make any payments towards her loans.

Morgan’s best option is to contact her creditors and ask them to postpone payments until she can find a new job.  If this does not work she should consider a consumer proposal (the student loan will survive the proposal).   Bankruptcy is the last option.

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.  

Who Pays My Bills When I Die

Posted on by Jordan Rumanek

bankruptcy_debtWho Pays My Bills When I Die

Hopefully,  you will have made a will which appointed an executor to handle your final wishes.  The executor after arranging for and paying for the funeral and burial costs will use any funds that you have to pay any of your outstanding debts and thereafter, will pay the beneficiary of your will any remaining funds.  If there is no will than a close family member or friend will have to hire a lawyer to have a court appoint an executor to handle your affairs.  For more information, please go to the website of the Canadian Institute of Certified Executor Advisors – www.cicea.ca.

If there are not enough funds to pay your debts after you die, there are several options.  If the debts are substantial, there is a provision in the Bankruptcy and Insolvency Act to have a deceased estate placed into bankruptcy.  This requires a meeting with your lawyer (who must obtain a court order to start the bankruptcy) and a trustee in bankruptcy (who will administrate the bankruptcy).  If there is no funds in the estate and you do not mind getting the phone calls and letters from collection agencies, you do not have to do anything, except perhaps explain that the person has died.

Under no circumstances is any person liable for the debts of another person unless you signed the original application form as a joint applicant or signed any document since the original application.  I have heard many stories over the years of collection companies telling a wife, husband, father, mother, son, daughter, etc. that they are responsible to pay the debt owing for the person who passed away.  This is not true.  You are not liable to pay anything.  The person at the collection agency is on commission – he or she will say anything they need to in order to induce you to pay the outstanding account.  The only person you are helping is the collection person at the other end of the phone who earns a commission if they get you to make a payment.

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.  

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