How to Bankruptcy Archives - Page 6 of 8

Bankruptcy Myths

Posted on May 6, 2014April 17, 2016 by Jordan Rumanek

Bankruptcy Myths

5 Bankruptcy Myths:

Bankruptcy is my only option: Not true, you have options. Talk to your trustee
Everyone will know and I will be ashamed: Not true, only those people you tell will know
My children will think I am a failure: If you take control of your financial problems this will teach your children that mistakes happen and you can work towards a solution
I will not be able to live with myself: Taking control of your life is a self-esteem booster
Employers will not consider me because of my bankruptcy: Most employers do not ask for a credit check when hiring. If this happens, contact your trustee to ask for advice

Contact the Office of the Superintendent of Canada 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.

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.

Who prepares the consumer debtor’s income tax returns?

Posted on May 1, 2014April 17, 2016 by Jordan Rumanek

Who prepares the consumer debtor’s income tax returns?

A bankrupt’s tax year is divided into two parts. If a consumer debtor files an assignment, for example, on May 1, then the tax year is divided into the period between January 1 and April 30 and the second part is the period between May 1 and December 31.

In most cases, the trustee in bankruptcy prepares the income tax returns for both periods of time; that is pre-bankruptcy and post-bankruptcy until the end of the calendar year.

With the pre-bankruptcy return, it is possible in many cases of consumer debtors that there will be a tax refund available. As the consumer debtor has a duty to deliver up all property to the trustee, the tax refund belongs to the estate. The tax refund is technically property of the bankruptcy and the trustee will receive it on the consumer debtor’s behalf and pay it into the estate. Therefore, the consumer debtor may be asked to sign a direction to Canada Customs and Revenue Agency permitting the Agency to pay the trustee although technically the trustee is entitled to the refund as of right.

With the post-bankruptcy return, the trustee may, but need not, prepare the consumer debtor’s bankruptcy return. Once again, if there is a refund, the trustee is entitled to intercept that refund and pay it into the estate for the general distribution to creditors.

Student Loans Question

Posted on April 13, 2014April 17, 2016 by Jordan Rumanek

Student Loans Question

I graduated from University in May, 2007, and have not received OSAP since December, 2005. I took a few years off of school and was supposed to start paying back my loan years ago. I have read that after seven years out of school I can include my student loans in a bankruptcy. Does this mean seven years after I ceased to receive OSAP or does this mean seven years after I cease to be enrolled in school?

Student loans are dischargeable by a bankruptcy if you file for bankruptcy or make a proposal more than seven years after the last day of the last term for which you received student loans. If the timing is close, check your statements carefully or call Canada Student Loans and find out the day they consider to be your last day. If you are in difficult financial circumstances, and you need to file within the seven year period, you are still protected from collection action. However, interest does still accrue, so it is best to keep communications open, even during the proceedings. N.B. There is a provision in the Bankruptcy and Insolvency Act for those who have filed after five years to have the debt discharged (at the discretion of the court), if both ongoing financial hardship and good faith in respect of repayment can be demonstrated.

Property With 2 Owners

Posted on February 6, 2014April 20, 2016 by Jordan Rumanek

Property With 2 Owners

I have a property which is under two names. One of the two people is planning to file a bankruptcy. Will the bank take the property away? Should I wait till the person who is bankrupt obtains the bankruptcy discharge to sell the property?

Answer:

The bank will only take the house away or the property if you are behind in the mortgage payments. The big question is does the property have equity? To determine the equity we need to know the value of the property and the balance of the mortgage outstanding. In most cases the bankrupt person can negotiate with the trustee to keep the house by continuing to make the mortgage payments and pay any equity in the house to the trustee who will distribute those funds to the creditors. It is usually better to wait until after a person is discharged to sell a house. If a buyer finds out the vendor is bankrupt this results in a a low offer as the buyer thinks the vendor is desperate to sell.

Tag: How to Bankruptcy

Bankruptcy Myths

Bankruptcy Myths

Who prepares the consumer debtor’s income tax returns?

Who prepares the consumer debtor’s income tax returns?

Student Loans Question

Student Loans Question

Property With 2 Owners

Property With 2 Owners

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