Bankruptcy Act Archives - Page 12 of 15

What happens to my debts once bankrupt?

Posted on October 16, 2013April 20, 2016 by Jordan Rumanek

Once you are declared bankrupt or file a proposal your unsecured creditors(my debts) are not allowed to collect any money from you.

Unsecured Debts and Creditors: Unsecured debts are debts not secured by any assets, for example credit cards and personal loans are examples of unsecured debts. Generally, unsecured creditors have no right to recover any item you purchased with the money you owe them. They cannot make any claims in your bankruptcy or proposal and you are discharged from these debts.
Secured Debts and Creditors: Secured debts are those attached to an asset. If you fall behind in payments, a secured creditor may claim the asset and sell it to pay for the debt. Examples of secured debts are mortgages, car loans and a creditor who is taking security on any of your assets with your consent. However, if you wish to keep your assets, you are always entitled to negotiate with your secured creditors to reach amenable agreement with all. The Trustee may still sell your asset if the amount required by the agreement is less than the value of the asset.

Debts Not Covered by your bankruptcy. You are not discharged from the following debts during your bankruptcy: Fines for penalties, debts arising from fraud, child or spousal support. In addition, suppliers of unpaid housing or utility services, such as electricity, telephone, or gas may require payment in full to maintain the provision of services.

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.

Seniors Debt

Posted on October 10, 2013April 20, 2016 by Jordan Rumanek

Seniors Debt or Bankruptcy Information Article

Your finally made it to retirement . Perhaps you do not have the amount of pension income that you had hoped for, but you are comfortable and relatively debt free or at least managing to make all of your monthly payments without getting “past due” notices or collection agencies calling.

Then it happens. A phone call comes from a family member explaining their dire financial situation. It could be the result of a marriage breakdown, layoff at work, loss of the overtime at work– it really does not matter “why”. What does matter is they are asking for your financial help. Deep down you fear the chances of them repaying the loan are very slim and yet you want to help. Before you say yes, take a few minutes to analyze your situation. If you lend the money and it is not repaid, will there be any effect on your own financial situation? Is this a one time request or is the problem long term? You need to find out if they are requesting help from anyone else. It is a very good idea to have a family meeting to discuss how the family is going to help. This has three advantages: First, the reason for the need of the money is verified. Second, if the loan is granted, it can come from several people which will spread the risk. Third, if the family decides it is not in the best interest of everyone to grant the loan, the family is collectively saying no, not just you.

It is very difficult to say no to someone in trouble, especially if it is someone in your own family. Please make sure that you do not hurt yourself at the same time. If you cannot afford to say yes – it is ok to say no. Your family will love you regardless of your answer.

Canada Revenue Agency Q & A

Posted on September 26, 2013April 20, 2016 by Jordan Rumanek

Canada Revenue Agency Q & A

Hi, I’m a CA sole practitioner. I have a question regarding an individual client who owes CRA a substantial amount of unpaid personal income tax and director’s liability on HST/source deductions. My client advises they have negligible assets other than their principal residence owned 50/50 with their spouse who has no such CRA liabilities. They are both seniors with health issues.

Q1: Is there any risk of loss of their home due to CRA debt?

Q2: If yes to #1, what steps should they consider to prevent the loss of their home?

Q3: In general, what specific approach would you advise in order to eliminate or reduce this significant personal debt?

Yes, there is risk and CRA can put a lien on the debtor’s house for the unpaid debt. To prevent this they have options and can choose to file a consumer proposal or bankruptcy. If they do choose one of these options, CRA can no longer put a lien on the property. In terms of question #3, the specific approach would depend on a variety of details such as: the option they choose, the value of the house and the balances outstanding on the mortgage.

What happens if my Employer goes Bankrupt?

Posted on July 31, 2013April 20, 2016 by Jordan Rumanek

What happens if my Employer goes Bankrupt? Q&A’s:

1. What happens to my wages?

Not only is your wage protected under the Wage Earner Protection Act. but you are also a preferred creditor in any future asset distribution by the Trustee. Please refer to the Human Resources Canada Website: Wage Earner Protection Program: rhdcc.gc.ca

2. What happens to my vacation pay?

As mentioned above, not only is your wage protected under the Wage Earner Protection Act. but you are also a preferred creditor in any future asset distribution by the Trustee. In relation to the payment of wages and vacation pay in Canada, an employee working in Canada, legally has certain protections in the event their employer declares bankruptcy.

3. What am I entitled to?

This is a case-by-case scenario and it depends on whether or not the Trustee is going to continue operating the business, sell the business or liquidate the assets.

Tag: Bankruptcy Act

What happens to my debts once bankrupt?

Seniors Debt

Seniors Debt or Bankruptcy Information Article

Canada Revenue Agency Q & A

Canada Revenue Agency Q & A

What happens if my Employer goes Bankrupt?

What happens if my Employer goes Bankrupt? Q&A’s:

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