I filed a Consumer Proposal and my trustee tells me that he has to file an Administrator’s Report. What is this?
Your trustee is acting in this situation as the Administrator of your proposal. As such, there is a requirement under the legislation that he submits a report to your creditors:
The proposal was filed with the Officer Receiver who represents the Office of the Superintendent of Bankruptcy
Your financial situation and assets listed on your documents are reasonable
Your list of creditors (with balances higher than $250) is reasonably accurate
Explains what is the cause of your financial problems
A brief summary of your net income per month, type of employment, the fact that you do not wish to file a bankruptcy and the amount that the creditors will receive in the proposal. If you and your partner are filing individual proposals at the same time, the joint creditors will be notified of the concurrent proposal so that they realize that they receive payments from both proposals. If the administrator has determined that the payment in the proposal is lower than the creditors would receive in a bankruptcy, there is an obligation to disclose that fact but add any mitigating factors for the creditors to consider before deciding whether or not to vote for or against your offer.
In many cases, the creditors start reviewing your proposal by reading the Report of the Administrator. It is a very important document.
What is debt exclusion from bankruptcy? A bankruptcy or proposal will get rid of most of your debts, but not necessary all of them. This is because certain debts are secured to your assets. The most common being a mortgage on your home or a loan on your car. If you want to keep the house or car, you must continue to pay the debt secured to the asset. In addition, other debts listed in Section 178 of the Bankruptcy and Insolvency Act specifically exclude certain debts from being included in bankruptcy as a matter of public policy.
These debts include spousal support, child support, debts originating in fraud, debts incurred while acting in a fiduciary capacity. These also include debts resulting from an assault, fines and penalties awarded by a court (income tax, traffic and criminal). Finally, student loans are not included in your bankruptcy unless you have not been a student for seven years. However, in cases of severe hardship, a court can reduce the seven year limit to five years.
There is nothing that prevents you from buying a car while you are bankrupt. If you are financing the purchase of a car, you must disclose that you are an undischarged bankrupt. This is the period between the date you filed the assignment in bankruptcy and the date that you are discharge from the bankruptcy process.
Even if you do not disclose this, the company financing the car will find out when they get a credit report on you. Now you have lost credibility which may result in a higher interest rate due to the risk factor or they will cut back on the amount they are willing to loan you. You might have to settle for a less expensive car that does not require a lot of financing. In Ontario, a vehicle is exempt up to a value of $6,600. If the vehicle is required as a “Tool of Trade”, the required exemption is increased to $11,300.
It would be wise to discuss your budget with your Licensed Insolvency Trustee (LIT) at the start of your bankruptcy as the Bankruptcy and Insolvency Act (Directive 11 R2) may result in you having to pay part of your income to your creditors. If someone in your family is giving you the money for the car, they should register a lien on the car for the amount of the money that they are giving you. This will make sure there is no equity that will accrue to your creditors. In the same thought, someone may give you a car while you are bankrupt in order to help you. You do not want your trustee to consider this as an asset for your creditors.
Consider the options:
1. Lease the car in their name and add your name to the insurance. Consider increasing the insurance to give the family members maximum protection.
2. If the vehicle is transferred into your name, the donor could put a lien on it for the value of the car.
There are always options for you to consider. Please discuss them with your trustee.
There are three different situations where an Ontario resident can stop collections calls.
Where you are receiving collection calls concerning monies owing to a bank
In Canada a significant percentage of non-mortgage debt is owed to financial institutions regulated by the federal government. You can stop collection calls in connection with monies owing to a bank provided you do the following:
Send the organization calling you a letter by registered mail
In which you ask that it only communicate with you in writing,
You provide an address where you can be contacted in writing
This federal law gives the consumer receiving collection calls on monies owing to a bank the right to stop calls from not only collection agents but also the original creditor.
Where you are receiving collection calls from a collection agency
An Ontario resident can stop collection calls from a collection agency, regardless of who the money is owed to. You can stop collection calls from a collection agency provided you do the following:
Send the collection agency a letter by registered mail
In which you dispute owing the alleged debt and you suggest the dispute go to court
Where you are receiving collection calls from a law firm
An Ontario resident can stop collection calls from a law firm. You can stop collection calls from a law firm by hiring a lawyer to send the law firm a letter indicating the lawyer is representing you in this matter.