Save first and your savings will help you be realistic and you will be able to live on less. It is a mistake to feel entitled to purchase—that feeling of entitlement or language such as: I deserve it! is a false positive. Instead tell yourself that you are entitled to save. Open up 3 savings accounts to help you save for a variety of different items and life events. First, you need a savings for 3 months emergency. Second, you need a short- term savings and you can use this account every time you feel the need to use a credit card. Third, open a savings account that you can not access easily or by debit card. You will be likely to spend from this account because you will have time to think about whether or not you need the item you want to purchase.
What Happens If I Lie To My Licensed Insolvency Trustee?
It is a statutory obligation for every person filing an assignment in bankruptcy to make full disclosure of all assets, liabilities, income and living expenses. As well, you must disclose information as to the disposal of any of your assets within the past 12 months (5 years if the asset is real estate). If you intentionally do not disclose significant information to your trustee, you will have your discharge from bankruptcy opposed by the trustee.
You might even be required to appear in court to explain why you did not disclose full and complete information. The court can impose penalties on you, depending on the significance of the non-disclosure. You should also be aware that you are asked under oath to swear that all of the information that you gave to the trustee is reasonable and accurate to the best of your knowledge and belief.
Swearing a false affidavit is called “perjury” and now you may be charged under the Criminal Code as well as under the Bankruptcy and Insolvency Act. Not a good situation to find yourself in when you are already stressed out over your debts.
Hidden assets. How does a licensed insolvency trustee find hidden assets?
When you fill out the Application Form to file an assignment in bankruptcy, you provide information about yourself and your assets, liabilities, income, expenses as well as your financial history. You will also be asked to supply the trustee with creditors statements, lawsuits, copies of your last income tax returns, current pay stub, your personal bank account for the last 12 months, business financial statements and business bank accounts as well as any other information that the trustee feels he needs. The trustee is not being intrusive–he is just doing his job in the administration of your bankruptcy. He is making sure you are being truthful about your affairs.
Creditors statements and bank accounts are reviewed to see who you owe money to as well as what you charging on credit. If there are significant duplication of purchases of electronics, you will be asked if you are buying electronics on credit and selling them for cash to finance an addiction. Taking numerous cash advances at a casino is obviously a gambling problem which will usually result in you being asked to sign a Self-Exclusion form so that you will no longer be able to go to a casino. The trustee will also be obligated to file an opposition to your discharge. Payments to mortgage companies, insurance companies, secured lines of credit will be matched against your listed assets. If you made a cheque payable to a marina – did you declare ownership of a boat? If you charged gasoline – did you declare ownership of a car? The list goes on.
Your income tax return will be reviewed for any deductions or carry forward balances pertaining to RRSPs, RESPs, RIFs, business losses, number of dependants living with you, etc. Your pay stub might show a deduction for Canada Savings Bonds, Life Insurance or other assets. Many trustees are capable of searching for assets being financed via registrations of the secured lender under the Personal Property Security Act which covers almost everything other than real estate.
And last – your creditors. Every time you fill out a credit application, you are giving information about yourself, your family, your job, assets with their value. In years gone by, this information might be buried in a file folder in a storage room in the basement.
Today, it is likely scanned and can be retrieved in a few seconds. If a creditor notices that an asset of significant value has not been shown on your list of assets, they will contact the trustee about the discrepancy. Hopefully, the trustee will determine that the asset was sold between the date of the credit application and the date of the bankruptcy and the sale proceeds were properly accounted for.
But what if you forgot to disclose an asset. As soon as you discover the omission, notify the trustee. If the error is not significant, he will correct his file and nothing further will happen. If the error is significant – i.e.- the asset information given to the creditors at the start of the bankruptcy was not correct to the point of being misleading, the trustee will prepare documents to amend the original Statement of Affairs and this will be sent to all creditors, the court and the Office of the Superintendent of Bankruptcy. An explanation as to why the asset was not properly disclosed will have to be provided but the fact that you voluntarily disclosed the missing information will show that you only made a mistake and it was an accident and not intentional on your part to mislead your creditors.
A person phones claiming to be from your bank and tells you that an employee of your bank is under investigation and asks that you help him in the investigation. He or she will ask you to verify your bank account. They might also ask you to verify your legal name, date of birth, social insurance number. Etc.
As soon as you give this person the information that they request they will thank you and say they will phone you if they need any more help.
They will never phone you. What they will do is use the information you gave them to clean out your bank account.
There is no bank in Canada that will phone you to request this kind of information over the phone. If you ever get this phone call, be polite, and say that you have to look up the information and ask for their name and phone number so you can phone them back – then phone the police fraud squad. This is identity theft and it is illegal.