On August 6, 2009, much to our surprise, Trustee’s received an email from the Office of the Superindent of Bankruptcy informing us that the new bankruptcy rules are finally coming into force.
You can read all about the new rules at our bankruptcy reform web site. Personally, I feel that the new rules are both good and bad.
The good news is that the cap on the amount of debt allowed for a consumer proposal is increasing from $75,000 to $250,000.
The second piece of good news is that a secured lender can’t seize your car if you file for bankruptcy. Currently there are lending instituations that seize your car just because you filed bankruptcy. It doesn’t matter if you were up to date and wanted to keep you car, that was their policy.
The bad news relates to debtors who have surplus income based on the governments income guidelines. If you are a first time bankruptcy filer, your bankruptcy will last 21 months, if you are a second time filer your bankruptcy will last 36 months. This means that your bankruptcy will probably be more expensive. Does this mean that if you are $1 over the governement’s income limit your bankruptcy will lost longer? Unfortunately, I don’t know the answer to that. The goverment won’t be publishing the new rules until August 19th and we can only hope this matter is clarified.
What does this mean for you? If you are thinking of filing a proposal, but your debts are over $75,000 it is best to wait until the new rules come into force. If you bring home a little bit more than the goverment imposed income limits it might be better to file prior to September.
If you are having financial difficulties and want to talk to me about how the new rules might affect you and if its better to file now or wait, call me at 310-PLAN or email me.
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