Category: Corporate Bankruptcy

Bankruptcy and the 407 Highway

Posted on by Jordan Rumanek

stop_150x150Bankruptcy and the 407 Highway

A recent Court of Appeal case in Ontario has now decided that if you file an assignment in bankruptcy and you owe money to ETR/407 (Highway 407 Act), this debt is allowed to be included in your bankruptcy without fear that the ETR/407 will be able to require the Province of Ontario, Ministry of Transportation to stop the issuance of your vehicle permit.  A clear win for people who have to file bankruptcy in Ontario.

The downside: ETR/407 has too much to lose.  They have asked that there be a stay on the court decision while they file an appeal which, of course, will take several years.

What about the people who have already had their renewal of vehicle permits denied?  Also, unknown at this time is the question as to the date when the ETR/407 loses the ability to require the Ministry of Transportation for Ontario to withhold the vehicle permit.  The two dates to consider are the date when a bankruptcy is filed in Ontario and the date when the person is discharged from his bankruptcy.

Contact Rumanek and Company for information regarding bankruptcy in Ontario and debt solutions.

Can I include 407 ETR Debt in my Consumer Proposal?

Posted on by Jordan Rumanek

etr_150x150Can I include 407 ETR Debt in my Consumer Proposal?

407 ETR debt results from the use of the 407 Electronic Toll Route in Toronto’s north end.  All drivers using the road are required to have a transponder to record and transmit their trips, or they are charged a significant video charge in addition to the road toll. Debts to 407 ETR can be included in a consumer proposal, so that no collection action can be taken to collect the debt owed. However, if the debt for the tolls remains unpaid (regardless of the consumer proposal), the 407 ETR submits a request to the Ministry of Transportation (MTO) to deny the renewal of the vehicle’s plate until the debt has been paid. A consumer proposal is a process which requires that creditors express their acceptance or rejection of the payment plan by vote or voting letter. The consumer proposal is considered to be accepted by the creditors if the dollar amount represented by votes in favour of the proposal represent over 50% of the dollar amount represented by all the votes. In our experience, the 407 ETR will always vote against a proposal. The Trustee and the debtor should consider this when drafting a proposal with significant 407 ETR debt. If you do not plan to have a vehicle in future, and there is no need to renew your plates, then the rights of the 407 ETR will not affect you.  However, if you require plate renewal, the only choice (based on current case law) is to pay the tolls, and/or to contact 407 ETR to try to make a payment arrangement. If you have significant 407 ETR debts, speak with your trustee about these issues before deciding whether bankruptcy is the best option for you.

Income Tax Debt and Bankruptcy

Posted on by Jordan Rumanek

Income Tax Debt and BankruptcyIncome Tax Debt and Bankruptcy

Lawrence owed a large sum of income tax according to his tax assessment and he had difficulty making payments.  Canada Revenue Agency had been charging him penalties and interest on overdue taxes and it was out of control. His child tax and HST credits were also put on hold.  Lawrence was unable to make payments due to a combination of factors such as a decrease in hours at work and a sudden sickness in the family.

He contacted Rumanek & Company to help him consider possible options such as a Consumer Proposal. A debt to Canada Revenue Agency is a debt that needs to be addressed immediately before they garnishee your bank account or wages.  Taking back control of your finances is the first step to not only decreasing stress in your life but also improving your family life.

Contact the Office of the Superintendent for more information.

When does interest on my debts stop?

Posted on by Jordan Rumanek

bankruptcy_debtWhen does interest on my debts stop?

The appointment of a Trustee by the Office of the Superintendent of Bankruptcy locks down the date and time of the bankruptcy or consumer proposal and triggers a Stay of Proceedings, which stops creditors from their rights to attach interest to your debt.

Once your bankruptcy or proposal documents are signed, they are filed with the Office of the Superintendent, which responds by issuing a Certificate of Appointment. The Certificate of Appointment makes the bankruptcy or proposal official, and notes the date and time of the appointment of the Trustee to your file. That is the point at which all interest on the debts provable in the bankruptcy or proposal stops. Once the bankruptcy is discharged, or the proposal completed, unsecured debts, and the interest that did not accumulate due to the Stay of Proceedings, are discharged.

Please note that debts that survive bankruptcy or proposals, such as recent student loans (see section 178 of the Bankruptcy and Insolvency Act), may continue to accrue interest during the bankruptcy or proposal period.  In addition, debts which are not discharged due to incomplete bankruptcies or proposals may have retroactive interest added back to the date of the original Stay of Proceedings.

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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