The Rebecca Martyn Bankruptcy Windsor Blog

When someone’s discharge has been opposed, it means something has happened to prevent the person from getting an automatic discharge.  This can happen for several reasons: He or she has filed for bankruptcy before and therefore they are not eligible for an automatic discharge; he or she did not comply with the duties in the bankruptcy and the trustee has opposed the discharge; a creditor has opposed the discharge or the superintendent of bankruptcy has opposed the discharge.

The trustee will oppose the discharge if someone has filed for bankruptcy for second time (or more).  This rule is stated in the Bankruptcy and Insolvency Act and regardless of the time that has passed since the first bankruptcy, a court review of the file is mandatory.

If the bankrupt did not perform the duties set out, the Trustee will oppose the discharge.  The bankrupt will only be entitled to the discharge once they have fully performed all of his or her duties.  It is very important to perform all of the duties required under the bankruptcy in order to get a discharge in a timely manner.

Creditors have opposed the bankrupts’ discharge because they have wanted the bankruptcy court to review the bankruptcy.  For instance, I had a creditor oppose a discharge on the grounds that the bankrupt should have known he would not have been able to pay back the debt before he took out the loan.  It is then up to the Bankruptcy Court to determine the status of the bankrupt’s discharge.

Having the office of the Superintendent of Bankruptcy oppose someone’s discharge occurs less frequently than trustee opposition.  The Superintendent of Bankruptcy can oppose if they feel there are facts they want to bring to the Courts attention.  This could occur if the debts are high based on the bankrupt’s personal situation. 

To review your situation and to determine if we think your bankruptcy might be opposed, call us at 310-PLAN.

The answer is that it depends.  It is important to remember that you have duties in a bankruptcy.  Two of the duties are to report your income each month to the bankruptcy trustee and another duty is to give any windfalls (lottery, inheritance) to the bankruptcy trustee.  As long as the savings are not the result of a windfall, and as long as the savings are from your part of your earnings, then you can keep them.

For example, if the savings are the result of an increase in income and you have not paid your required payment as a result of the Superintendent’s Standard, then you cannot keep all of the savings and you must remit the requirement payment to the bankruptcy.

To review your options and to review the duties in a bankruptcy in more detail, call us at 310-PLAN.

I was in a meeting the other day and Betty (not her real name) asked me her bankruptcy would affect her husband.   Betty and her husband are recently married and she accumulated the debt prior to marrying him or evening knowing him.  Someone she works with told her that because they are married he is automatically responsible for her debt.

I let Betty know that this is not the case.  Her husband is not responsible for her debt just because they are married.  He would have had to co sign the debt to be legally responsible for it.   The only affect bankruptcy has on her husband would deal with any assets they own together and family income to determine Betty’s payments .  In her case, they do not have any assets and they earn less than the Superintendents Standard.  As a result, her bankruptcy has no effect on him.

To book your no charge, no obligation consultation, call us at 310-PLAN

Frequently someone emails me to find out about filing a consumer proposal or bankruptcy and they tell me that someone (usually a relative) cosigned a debt.

This is a typical scenario I see, and for the sake of making the example easy to follow I will name the debtor Fred.  Fred has 3 credit cards and a line of credit.  He is making the minimum monthly payments, but because of the high interest rate, the amount of the debt is only going down a little bit each month.  He decides to go to his bank to get a consolidation loan.  Due to his income and debt levels, the bank will not give him a loan without a co-signor.  Fred then asks his parents to co-sign the loan and they agree.   A few months later Fred is finding it difficult to make his loan payment.  His income has decreased and now his car needs repairs.  Fred has emailed me to find out what he can do.

The purpose of a co-signor is to protect the bank in the event the loan is not paid.  If Fred doesn’t pay his loan, the bank will expect payment from the co signors, in this example, his parents.  If Fred files for bankruptcy or files a consumer proposal, it does not relieve his parents of their responsibility for payment.

If you have been turned down for a consolidation loan, call us at 310-PLAN to review your options first.

I received an email a couple of day ago from someone who was being garnisheed and wanted to know what he could do.  In his email he told me that a credit card company took him to court and now his wages have been garnisheed 20%.  He wanted to know what he could do about this.  There are only 3 ways to stop a garnishment 1 – pay the debt in full, 2 – file bankruptcy and 3 – file a consumer proposal.

Once he files a bankruptcy or consumer proposal we will send a “stay of proceedings” to his employer.  This lets his employer know that the bankruptcy or consumer proposal has been filed and the garnishment is no longer in force.  Any money already deducted from his paycheque but still with the court will be sent to the trustee.  Any money already sent to the creditor will not be returned.

If you are being garnisheed and want to know if bankruptcy or a consumer proposal is the right option for you, call me at 310-PLAN or email me.

As a trustee in Windsor, Ontario everyday I meet with men and women who have had their hours cut back at work.  For years they had been working 6 days a week, 48 hours a week and they became used to this income and the lifestyle. 

Recently, many companies in Windsor have faced tough times and they are no longer offering the overtime they have in the past.  As are result, many employees are finding they are no longer able to pay their debts.  I met with someone a few months ago who was still working but was having difficulty managing his expenses with the lower income. He is married and has a nice house and 2 cars.  He was concerned that he would lose his house and cars.  He and I reviewed his budget and determined that he has the income to still be able to pay his mortgage and car loans.   However, he didn’t have enough money left over to afford even the minimum payments on his line of credit and credit cards.

He filed a consumer proposal, offering a payment plan over the next 48 months of 40 cents on the dollar to his unsecured creditors.  His unsecured creditors have accepted the consumer proposal and he is grateful for his fresh start.

If you find your income has been reduced and you would like to review your options, call me at 310-PLAN or email me for free no obligation consultation.

I spoke with a new caller this morning and she wanted to know what she could do about her student loans.  She graduated from school 6 years ago and has been unable to keep up the payments on her loan.  She called me to find out if bankruptcy is an option for her.

In our discussion, I found out that her student loan is $7,000, and she also has a line of credit in the amount of $5,000 and credit cards totaling $3,000.  She does not have any assets, other than an old car.  She is currently working and brings home around $1,800 per month.

She knew there was a 10 year rule and wanted to know more about it.  I explained that the Bankruptcy and Insolvency Act states that if a student loan is less than 10 years old, it is not discharged (released) upon filing bankruptcy (or a consumer proposal).  If she were to file for bankruptcy now, she would still be responsible for the student loan once she was discharged from bankruptcy.  In 4 years, if she finds she is still having difficulty paying, she can ask the bankruptcy court to discharge the debt.  She will probably need a lawyer to help her with this.  The bankruptcy court will then decide the outcome of the student loan.

If she filed for bankruptcy, she would not longer be paying her line of credit or credit cards.  As a result, it will give her some extra money each month to set aside to repay her student loan.

Another option might be to file a consumer proposal.  If the creditors, including student loan, accept the consumer proposal, it will put her on a payment plan for the term of the consumer proposal.  Once it is done, she can work out a repayment plan with student loans for the balance.

This website http://www.student-loan-bankruptcy.ca/ has a blog which discusses bankruptcy, student loans, and proposed amendments to the Bankruptcy and Insolvency Act.

If you are having difficulty with student loans, give me a call at 310-PLAN and we can talk about your situation.

I spoke with Troy (not his real name) today and he wanted to know how to deal with a secured creditor.  In this case, he pledged his furniture to a secured creditor and was hoping he could just file for bankruptcy to get rid of the debt, but be able to keep his furniture.

I explained to Troy that it is not as simple as that.  Pledging furniture for a loan is very similar to pledging your car for a loan.  If he doesn’t pay, the secured creditor has the right to seize the furniture he pledged as security.  If he files for bankruptcy, this right does not go away.  He mentioned that he heard that the law allows you to keep your furniture, but I explained that in a case like this the pledging of the security overrides the other law which would allow him to keep the furniture.

I suggested that if he wants to file for bankruptcy, he might be able to negotiate a new payment plan with the secured creditor after the bankruptcy is filed.  For example, if the loan is for $10,000 but the furniture is only worth $2,000, he could offer to pay the secured creditor $2,000 to allow him to keep the asset.  The theory behind this is that if the secured creditor seized the furniture that had been pledged, they would only get $2,000 for it.  The balance of $8,000 is part of the bankruptcy.

Troy asked if the same negotiation can be done with a car loan and mortgage.  It is up to each creditor, but my experience has shown that these debts cannot be easily re-negotiated.

If you would like to review your options with your secured creditors, call me at 310-PLAN or email me your question.

I received an email from someone asking about getting more information about personal bankruptcy.  For starters, he came to a good website.  This website lists some answers to some of the most common questions I get asked.

The emailer can also visit www.hoyes.com.  That website lists a lot of information about bankruptcy in easy to understand terms.  There are various pages on our website outlining the bankruptcy process.  He can also read about what assets he can keep, how his income will affect the bankruptcy process and what debts survive bankruptcy. 

I also suggested that he visit the website of the Office of the Superintendent of Bankruptcy at http://strategis.ic.gc.ca/epic/site/bsf-osb.nsf/en/h_br01223e.html  The Office of the Superintendent of Bankruptcy is a federal is government agency that overseas the bankruptcy process in Canada. 

I told him that if he wants to discuss personal bankruptcy specifically about his situation, he should call me or email me his specific question. 

I met with a gentleman the other day and in discussing if a consumer proposal was right for him, he wanted to know if filing the consumer proposal would cause him to lose his house.

My first question to him was to find out if he was overdue on his mortgage.  In his case he was 3 months late.  The bank had also sent him a notice demanding payment by a certain date.  In his case, since he is already late and he cannot get caught up the proposal will not cause him to lose his house, the fact that he was 3 months behind will cause him to lose the house.

Let’s compare this now with a married couple I met with.  They are not in arrears on their mortgage. They filed their consumer proposal, it was accepted and they have made all of their consumer proposal payments on time.  They have continued to make the mortgage payments and are still living the same house.  The mortgagor (the person who they make payments to) is not allowed to cancel the mortgage simply because they filed a consumer proposal, the law doesn’t allow it.  As a courtesy, the day before they filed the consumer proposal, they called the mortgagor just to let them know what they were doing and that they planned to keep paying their mortgage payments.

When meeting with the married couple, I warned them to make sure that all of their future mortgage payments are made on time. Mortgage renewal is not an automatic right.  If they are late on any payments, the mortgagor could refuse to renew the mortgage.  If you have been good with your payments, it is unlikely the mortgagor will be concerned.

If you would like to review your situation, call me or send me an email.