Bankruptcy Questions Archives - Page 31 of 85

Why You Need a Bankruptcy Discharge

Posted on March 1, 2015April 16, 2016 by Jordan Rumanek

Why You Need a Bankruptcy Discharge

Please also refer to our blog: Bankruptcy – What is a Discharge.

While you are bankrupt, your position is that of an “undischarged bankrupt.” This means that you have to continue to supply budgets, tax returns and other information to the trustee on an ongoing basis. You are not allowed to apply for a loan, line of credit, bank overdraft, mortgage, etc. for an amount over $500 without disclosing that you are an undischarged bankrupt. The chances of being approved are very poor. If you come into an inheritance or win a lottery while you are still bankrupt, your trustee will have a talk with you about who gets the money. The trustee will explain that an “after acquired asset” is an asset acquired by the bankrupt person between the date that you filed the bankruptcy and the date you are discharged from your bankruptcy. You will not be happy with what you hear. Mortgage companies may renew an existing mortgage (usually at a higher than normal rate) but they will rarely allow you to increase the mortgage nor will they issue a new mortgage to an undischarged bankrupt.

Your discharge from bankruptcy is the start of your recovery and rebuilding of your financial life. You will be able to apply for a credit card or line of credit with a reasonable chance of success. Your trustee will assist you in this process. The credit bureaus (Equifax Canada and Trans Union of Canada) both keep a record of your bankruptcy for 6 years after you are discharged (14 years if it is a second time bankruptcy). The faster you get your discharge from bankruptcy, the faster it will disappear from your history. Translation – it will be easier, faster, cheaper to get a credit card or borrow money for the purchase of a car or house after you are discharged from bankruptcy than it is while you are still in the bankruptcy process.

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.

Bankruptcy Discharge For The First Time

Posted on March 1, 2015April 16, 2016 by Jordan Rumanek

Bankruptcy Discharge For The First Time

For a definition of discharge, please refer to our blog: Bankruptcy – What is a Discharge.

If you are filing an Assignment in Bankruptcy for the first time, there is a period of time that is allowed for the trustee to complete their administration of your bankruptcy. The earliest time that you can be discharged from your bankruptcy is 9 months from the date that you originally filed the bankruptcy. Surplus income (if it applies) will extend your discharge date from 9 months to 21 months. Other problems may result in your trustee, a creditor or the Office of the Superintendent in Bankruptcy opposing your automatic discharge date to a future undetermined date. This future date is determined by your trustee only after all of the original problems are resolved. When your trustee requests you to supply information or answer questions that may arise during the administration of your bankruptcy, “failure to cooperate” with the trustee is the most common reason why your trustee will oppose your automatic discharge.

Bankruptcy Discharge for The Second Time

Posted on March 1, 2015April 16, 2016 by Jordan Rumanek

Bankruptcy Discharge for The Second Time

Technically, there is no limit to the number of times that you can file an Assignment in Bankruptcy. The practical issue is that after the first bankruptcy, it gets harder to get discharged from the bankruptcy. In a second bankruptcy, you are still entitled to an automatic discharge but the minimum period of time is increased from 9 months in a first bankruptcy to 21 months. If you have surplus income, the minimum period until you are discharged is 36 months. Simply stated, the second bankruptcy takes longer to finish and is more expensive than the first bankruptcy.

If there are any circumstances in the second bankruptcy that causes the trustee, a creditor or Office of the Superintendent to oppose you automatic discharge, the court will not look kindly on the fact that this is a second time bankruptcy. This is especially true if both bankruptcies have a similar cause. It is for this reason that your trustee (for your 2^nd bankruptcy) will ask you for copies of the documents from your first bankruptcy. Your trustee will want to be very explicit in describing the cause of your 2^nd bankruptcy. It may be a hassle for you to find your old papers, but your trustee is only trying to help you. About two months before your discharge, your trustee is required to write a report* in which he describes what he has found during his administration of your file. In this report, the trustee must recommend that you receive an automatic discharge or he is required to oppose your discharge which may result in an appearance in court by yourself.

* Report on the Bankrupt’s Application for Discharge is required under Section 170 of the Bankruptcy and Insolvency Act. It is often simply called the “170 report.”

Bankruptcy Story #109

Posted on March 1, 2015April 16, 2016 by Jordan Rumanek

Bankruptcy Story #109

Alison and Patrick’s two children had grown up and moved out. They were living comfortably with two modest incomes, a nest egg and a shrinking mortgage. They had talked for years about starting a small business together. Alison was a qualified therapist and Patrick would manage the business and keep his job part time. They had worked out everything, the business plan was immaculate and the bank gave them a second mortgage to get started. They set up a limited company and had to sign both property and equipment leases-these had personal guarantees attached to them. The business started and everything was going well.

Two years later they signed all leases again, the business was almost running itself and Patrick was happy working his old job part time. A month later a rival business moved in and the council changed all the local street parking to a half hour limit and strongly enforced it. Their clientele decreased rapidly. The business closed 4 months later, after they had used all their savings and sold their car. The company went into liquidation, but there were still the personal guarantees totalling $128,000. The equity in the property was used to pay creditors and left $39,000 owing that they were both liable for. The stress took its toll, Alison went on the sick leave, Patrick managed to pick up good paying full time work but could not meet all the debts.

What could they have done?

Recognize the warning signs of why a bank would demand you personally guarantee a loan. The business plan did not take into account competition and potential parking problems.

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

Category: Bankruptcy Questions

Why You Need a Bankruptcy Discharge

Why You Need a Bankruptcy Discharge

Bankruptcy Discharge For The First Time

Bankruptcy Discharge For The First Time

Bankruptcy Discharge for The Second Time

Bankruptcy Discharge for The Second Time

Bankruptcy Story #109

Bankruptcy Story #109

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