bankruptcy Ottawa

Common law Spouse Dies

Question: My Sisters Husband died and left no will, no insurance.She has nothing to her name and He owed $12,000 in back taxes to Revenue Canada. My sister lives in Ontario, does not work as she is physically incapable of performing a job and the only money she brings in is her Widows pension which Revenue Canada has taken upon themselves to take half of.
She got her taxes done today only to find out they are keeping her refund, half her monthly CPP and they want her to pay an additional $800.00 by May 2nd on top of that.

Is this even legal? Can they leave her with nothing to live on?
I think they leave her no alternative but to declare bankruptcy in Ontario.

Answer: Whether or not it is legal is beyond the scope of this website; for that answer you would need to consult a lawyer. However, to answer your underlying question, yes, CRA does have the ability to garnish CPP if taxes are owing. Your sister has two options.

First, she could call CRA and attempt to work out a payment arrangement with them, so that perhaps they will agree to take less of her pension each month. It should be noted that if her late husband owed taxes, CRA should not be garnisheeing her pension; they can only garnishee her for taxes she owes, so that would be an issue to clarify with CRA.

Second, if she cannot work out a deal with CRA, she could consider filing bankruptcy in Ottawa. Bankruptcy does discharge tax debts, so it may be an option. She should consult with an Ottawa bankruptcy trustee for further information.

Tags: CRA, taxes
Posted on April 12th, 2011 by Questions in bankruptcy Ottawa | No Comments »

Can creditors take assets from someone’s spouse when they go bankrupt?

Question: Someone in the family is considering filing personal bankruptcy. This family member is married and the house/property and car are in his wife’s name. After he files bankruptcy can the creditors still come and take things from the house even though it is signed under the wife’s name?
Also, what if this husband declares non-residence before or after filing personal bankruptcy? What will happen to his assets if they are in the house that is signed under the wife’s name, can they creditors still touch them?

Answer: Only the bankrupt’s assets are involved in the bankrupt’s bankruptcy. A spouse’s assets can’t be seized for the other spouse’s debts. The only exceptions would be if the non-bankrupt spouse has co-signed for the bankrupt spouse, or if the bankrupt had transferred assets to his spouse prior to filing bankruptcy. Your trustee can explain in more detail.

Tags: spouse
Posted on December 2nd, 2010 by Questions in bankruptcy, bankruptcy Ottawa | No Comments »

Bankruptcy in Ottawa Canada for a second time

Question: If you have filed bankruptcy in Canada in the past,can you do it again? and how long is the wait period before you can do it?

Answer: You can file bankruptcy in Ottawa for a second time provided you are discharged from your first bankruptcy. There is no waiting period.

However, a second bankruptcy is more costly and lasts longer than the first bankruptcy, so you should consult an Ottawa bankruptcy trustee to arrange a free initial consultation before making your decision.

Posted on February 24th, 2010 by Questions in bankruptcy Canada, bankruptcy Ottawa | No Comments »

Divorce and Bankruptcy

Question: I am in the middle of a divorce and we have many accumulated debts together. The house was taken by the bank but we are left with all the other household debts. What happens with the house? Am I still responsible? Also what happens when the debts are in both of our names?

Answer: If a debt is in both names (you and your ex), you are both responsible for the entire amount of the debt. If a bank repossesses a house and sells it, and does not recover the full amount owing on the mortgage, they will pursue you for the difference.

The same is true for debts that are in both names. If one of you does not make the payments, the lenders will pursue the other person for the full amount owing.

Divorce is one of the leading causes of bankruptcy in Canada, so if you believe that you will not be able to pay all of your debts in full, you should consult an Ottawa bankruptcy trustee to explore all of your options.

Posted on June 16th, 2009 by Questions in bankruptcy Ottawa | No Comments »

Animals and Bankruptcy

Question: If I declare bankruptcy, will I loose my pet dog and my horse I use for work- I am a riding coach ?

Answer: It depends on their value. Unless your pet dog and horse are very valuable, it is unlikely that you would lose them if you filed for bankruptcy. We suggest that you contact an Ottawa bankruptcy trustee who can review your situation and advise you of your options in more detail.

Posted on February 12th, 2009 by Questions in bankruptcy Ottawa | No Comments »

Curious about when to consider bankruptcy in Ottawa

Question: When should a person consider bankruptcy in Ottawa? Single Mom with 2 children with an annual income of 35000, but I seem to only make dents in the interest alone. I have finally paid off my student loan but I am maintaining things now. I have yet to inquire about my debts as I don’t want to see what their is let alone have people calling and harassing me all the time without a game plan first. What are the reprecussions of filing bankruptcy to spending the next 15 yrs paying off debt?

Answer: You are correct, bankruptcy is a way to deal with your debts, but it also has some negatives:

First, there will be a note on your credit report for six years after you are discharged, so it will be more difficult to borrow in the future.

Second, while you are bankrupt you are required to make payments based on your income, so if your income increases, your payments increase.

Finally, you may lose some of your assets, such as your tax refund and GST credits.

To determine if bankruptcy is the correct option for you, you should make a list of all of your debts and then call an Ottawa bankruptcy trustee for a free initial consultation, so that you can review your options and decide which option is best for you.

Posted on October 27th, 2008 by Questions in bankruptcy Ottawa | No Comments »

jointly owned property

Question: 3 people jointly own a piece of property, one person has a mortgage on the property that has been co-signed by the other two parties. If the person with the mortgage goes bankrupt or files a consumer proposal how can that affect the other two people and could they lose the property or have a lien placed on it?

Answer: It depends on the value of the property. The bankruptcy trustee must turn the bankrupt’s one third interest in the property into cash, so the other two parties could conceivably buy out the bankrupt and keep the property. To start, and appraisal should be done on the property, and the mortgage balance confirmed, and from there the bankruptcy trustee can advise you on the next steps.

Posted on September 27th, 2008 by Questions in bankruptcy Ottawa, consumer proposal | No Comments »

Personal Bankruptcy in Ottawa and House

Question: Our home was transferred to my husband’s name more than a year ago. My name is not on the title nor is it on the mortgage or insurance. This was done to protect this asset against a possible lien for a debt that I was personally responsible for. Would this home be protected should I file for personal bankruptcy in Ottawa?

Answer: When you file for bankruptcy, you are required to disclose whether or not you sold a house in the previous five years “while you were knowingly insolvent”. In your case you transferred the house to protect it from a creditor, so you were probably insolvent. Whether or not it would be an issue in your bankruptcy will depend on the value of the house and the mortgage balance at the time of the transfer, and your other debts.

As this is a significant issue, we suggest you consult a bankruptcy lawyer or an Ottawa bankruptcy trustee for more information.

Posted on April 8th, 2008 by Questions in bankruptcy Ottawa | No Comments »

rrsp and bankruptcy in Ottawa

Question: I have a managed rrsp to which I have contributed for the last 20 years. is this vulnerable if I go bankrupt in Ottawa? is the law about to change? Thanks Jennifer

Answer: Potentially, yes. If your RRSP is not locked in, you will probably lose it if you file for bankruptcy. There have been many proposed rule changes, but as of today no changes are imminent.

For full details, and for a free initial consultation, we suggest you contact an Ottawa bankruptcy trustee.

Posted on October 27th, 2007 by Questions in bankruptcy Ottawa, RRSP and bankruptcy | No Comments »

monthly car payments on new vehicle

Question: What will happen to my new car if I go bankrupt in Ottawa? Will I lose my car?

What will happen to my new car if I go the proposal way. Will I lose my car?

Answer: The answer depends on the value of the car, and the amount owing on it. If you go bankrupt in Ottawa, or anywhere in Ontario, you are allowed to keep one motor vehicle with no loans against it worth up to $5,650. If the vehicle is worth more than that amount, you can pay the excess amount to the trustee for the benefit of your creditors, so you could keep a $6,650 car by paying the trustee $1,000.

If there is a loan against the car equal to the value of the car, the trustee will not take your car. It will be up to the lender to decide whether or not they will allow you to keep making payments on the car, so you can keep the car.

If you file a consumer proposal, you can keep your car with no loans against it. If there is a loan, as with a bankruptcy it is up to the lender to decide whether or not they will allow you to keep making payments on the vehicle.

This is a complicated area of bankruptcy law, so we suggest you contact an Ottawa bankruptcy trustee for more information.

Posted on June 16th, 2007 by Questions in bankruptcy Ottawa, car and bankruptcy | No Comments »

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