Tag: licensed insolvency trustee

RECEIVERSHIP MEANING: OUR NURTURING 8 POINT CHEAT-SHEET ANSWERS WHAT IS RECEIVERSHIP

Post author By Brandon Smith
Post date October 21, 2020

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

Receivership meaning introduction

My last Brandon’s blog was about bankruptcy meaning; the duties, rights and responsibilities of the different stakeholders in a bankruptcy administration. So I thought it would be fitting to follow that up with a blog on the topic of receivership meaning.

In this Brandon’s Blog, I answer the 14 most often asked questions about the meaning of receivership.

Receivership meaning: What’s the meaning of “receivership” in simple words

The receivership meaning in English, according to the Merriam-Webster dictionary is:

“Definition of receivership

1: the office or function of a receiver

2: the state of being in the hands of a receiver”

Those are the simplest words I can think of. Unfortunately, it does not tell you much. I doubt that it aids in your understanding. Simple words don’t help. Let’s get a little more complex.

Receivership meaning: What does it mean when a receiver is appointed?

First, a receivership is a remedy for secured creditors, such as a chartered bank or another lender who lent money to a company and took back valid security. One of the terms of the security agreement will be that upon one or more events of default, the secured creditor has the right to appoint a receiver.

When a secured creditor wishes to realize upon the assets of the borrower company that is subject to its security, they employ the services of a Licensed Insolvency Trustee (Trustee) to be the receiver. A receivership is performed under the authority of the Bankruptcy and Insolvency Act (Canada) (BIA).

In Canada, only a Trustee can be a receiver. The secured creditor appoints the receiver to take possession of the collateral covered by the lender’s security. The receiver then conducts a receivership.

Receivership meaning: How is a receiver appointed?

There are two kinds of receiver appointments: (i) private appointment; or (ii) court appointment. The type of appointment depends upon the circumstances facing the putative receiver. The main question to answer is are there practical or legal reasons why the court is required to make decisions and oversee this proposed receivership. If no, then a private appointment can take place. If yes, then an application to court needs to be made to have a receiver appointed.

Before being able to either make a private appointment or seek the assistance of the court, the secured creditor must give the borrower company adequate notice. It must provide the borrower with written notice of the events of default and demand full repayment of the loan. The lender must give the company at least 10 days’ notice before being able to appoint the receiver. The company that borrowed the money can waive the 10 day notice period, but the lender cannot.

Receivership meaning: What happens when the receiver is called in?

When the receiver is appointed, there are certain steps that the receiver must take. The receiver is charged with the responsibility of taking possession of the assets of the company in receivership. The receiver must get possession and control of the assets to safeguard them, wherever they are located. The receiver must make sure that an inventory of all the assets is quickly taken and that the assets are adequately insured.

Keep in mind that the assets belong to a company that was carrying on an active business. Therefore, one of the first things the appointed receiver must decide is whether or not to carry on the business of the company. The receiver must answer many questions, including:

Was the business already shut down when the receiver was appointed?
Are experienced employees available and willing to work for the receiver?
Will the assets of the company be worth more if sold on an operating business basis than on a shutdown liquidation basis?
Can the receiver operate the business in a cash-flow positive way?
If the receiver is estimating that the business being run in receivership will produce negative cash flow, is the secured creditor willing to fund the losses to take the chance that the assets will sell for a higher price than if the business is shut down right away?
Are there any legal, regulatory, or environmental issues that would preclude the receiver from operating the business?
Can the business be run safely?
Is there property located on the company’s premises that belong to third parties and therefore are not assets of the company covered by the lender’s security? This includes any assets, normally inventory, that might be subject to the right of revindication.

These are just some of the considerations for the receiver. The receiver must be able to make decisions rather quickly. The receiver must also be able to support the decisions with facts and evidence. So as you can see, the receivership meaning, in the beginning, means that there is a lot of hectic activity and decisions.

Receivership meaning: Under receivership meaning

So when the company is placed in receivership, it is under receivership. Once the receiver makes the various decisions I talked about above, with facts backing them up, the receiver then needs to get approval.

In a private appointment, the receiver only needs the approval of the secured creditor that appointed the receiver in an attempt to recover its secured loan. In a court appointment, the receivership meaning is that the receiver needs to take several steps.

First, the appointed receiver should make sure that the secured creditor who applied to the court for the receivership appointment order is onside with the receiver’s recommendations. Once that is the case, the receiver needs to prepare its report to court to advise the court of the receiver’s activities up to that date and the receiver’s recommendations for going forward in the receivership administration. The receiver is asking the court for its approval of the actions and activities of the receiver to date and for its go-forward recommendations.

Receivership meaning: What does a receiver do in business

Once the receiver receives the appropriate approval from the holder of the secured debt in a private appointment, or the court order approving the receiver’s recommendations, it then proceeds with implementing its recommendations in the receivership administration. If the receiver is continuing to run the business while advertising the business assets for sale, that is called a going-concern sale.

If the receiver is not operating the business and is just selling the assets of the closed-down business, that is called a liquidation sale. That is what happens in a liquidation.

Receivership meaning: What is the difference between receivership, liquidation, and insolvency?

When trying to figure out the receivership meaning, I have been asked the following questions many times:

What is the difference between receivership and liquidation?
What’s the difference between liquidation and insolvency?
What happens when a company goes into receivership in Canada?

I hope that based on what you have read so far, you now understand that receivership is an enforcement action started by the holder of secured debt or a secured loan. Liquidation can have two meanings. The first one is when the receiver (or bankruptcy trustee) sells the assets while NOT operating the company’s business. The second meaning of the word is in the phrase “statutory liquidation”. This happens when the shareholders decide to close down the business, but the value of all the assets is enough to provide funds to not only pay off all the debts. It also provides funds for the shareholders. A statutory liquidation happens when the company is solvent.

Insolvency, or insolvent, is a financial state. It means that the company cannot pay its debts as they come due. It also means that if the company’s assets are liquidated, there would not be sufficient funds to pay off all of the liabilities.

Finally, my whole discussion above is meant to explain in a receivership meaning sense, what happens when a company goes into receivership in Canada.

Receivership meaning: How do receivers get paid

The financial institution or other secured creditor who is responsible for the appointment of the receiver is liable to pay for the cost of the receivership. The receiver has a first charge against the assets of the company secured by the lender. That first charge is subject only to any valid trust claim against those same assets.

If the assets are insufficient to pay for the cost of the receivership and fully repay the outstanding debt of the secured creditor, then that creditor will suffer a shortfall.

Receivership meaning summary

I hope you have enjoyed this bankruptcy meaning Brandon’s Blog. Hopefully, you have better insight now into the fact that a sick insolvent company’s business can be saved by doing a sale of its assets to a healthy organization.

Do you or your company have too much debt? Are you or your company in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt.

You are worried because you are facing significant financial challenges. It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team.

That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

Tags bankruptcy trustee, court appointed, How do receivers get paid, How is a receiver appointed, Ira Smith Trustee, licensed insolvency trustee, meaning of receivership, private appointment, receivership, receivership meaning, under receivership meaning, What does a receiver do in business, What does it mean when a receiver is appointed, What happens in a liquidation, what happens when a company goes into receivership in canada, What happens when the receiver are called in, What is the difference between receivership and liquidation, What's the difference between liquidation and insolvency, What's the meaning of receivership in simple words

Brandon Blog Post

BANKRUPTCY MEANING: OUR POWER LIST OF DUTIES OF THE BANKRUPT AND OTHERS

Post author By Brandon Smith
Post date October 19, 2020

If you would prefer to listen to an audio version of this bankruptcy meaning Brandon’s Blog, please scroll down to the bottom and click on the podcast.

Bankruptcy meaning introduction

I recently read a decision of the Supreme Court of Nova Scotia in Bankruptcy and Insolvency. It was an interesting decision about a bankrupt who essentially absented himself and became AWOL after filing for bankruptcy. I will describe the case below. However, it did get me thinking that perhaps Brandon’s Blog about the duties of the various stakeholders in the bankruptcy process would be of interest. Put another way, if everyone does not do their part, what is the bankruptcy meaning?

The Merriam-Webster dictionary provides a bankruptcy meaning definition as:

“1a: a debtor (such as an individual or an organization) whose property is subject to voluntary or involuntary administration under the bankruptcy laws for the benefit of the debtor’s creditors

b: a person who becomes insolvent

2: a person who is completely lacking in a particular desirable quality or attribute

a moral bankrupt”

In this bankruptcy meaning Brandon’s Blog, I will focus on the first definition, as that is the one I am qualified to answer.

Bankruptcy meaning: The stakeholders

There are various players in the bankruptcy process. The primary ones are:

The person or company, the debtor, who is now bankrupt.
The licensed insolvency trustee (formerly called a trustee in bankruptcy) (Trustee) who administers the bankruptcy process.
The creditors who are owed money.
The Office of the Superintendent of Bankruptcy (Canada) (OSB) who regulates and supervises all administrations under the Bankruptcy and Insolvency Act (Canada) (BIA) in Canada.

I will leave the duties of the bankrupt until the end. That description in the bankruptcy meaning list will flow nicely into my description of the Nova Scotia bankruptcy court case.

Bankruptcy meaning: Duties of the Trustee

There are of course various statutory steps that a Trustee must take in any bankruptcy administration. It is also obvious that the Trustee must perform those steps properly.

In addition, the OSB has established a Code of Ethics for Trustees. The Code of Ethics for Trustees is an integral part of the BIA General Rules.

The Code establishes a standard for services to be provided by Trustees. It addresses:

the information that Trustees must provide to creditors;
the treatment of funds entrusted to Trustees;
conflicts of interest; and
the sale and purchase of the property of a business or individual who has filed for bankruptcy.

It also contains standards for advertising by Trustees and for maintaining the good reputation of the Trustee community.

Rules 34 through 53 inclusive of the BIA General Rules contain what the bankruptcy meaning of the Code of Ethics for Trustees is. You can read them by clicking on this Code of Ethics for Trustees link.

There are also various Directives issued by the OSB that guide the statutory steps that a Trustee must take. Examples of these Directives are:

Directive No. 1R2 Counselling in Insolvency Matters – This Directive deals with how the Trustee should conduct the required financial counselling sessions.
Directive No. 4R Delegation of Tasks – A Directive about when certain Trustee or administrator tasks can be delegated to others.
Directive No. 5R4 – Estate Funds and Banking – How a Trustee must handle estate trust funds.
Directive No. 6R3 – Assessment of an Individual Debtor – The steps to be taken in assessing the financial situation of the debtor, explaining the various options available and what bankruptcy duties are.
Directive No. 11R – Surplus Income – When assessing the financial situation of the debtor who becomes bankrupt, how to calculate the surplus income payments obligation of the bankrupt person.
Directive No. 17 – Retention of Documents by the Trustee – This one is self-explanatory.

These are but a handful of the Directives issued by the OSB that Trustees must follow.

Bankruptcy meaning: Duties of creditors

In the bankruptcy meaning context, creditors have certain duties which can better be described as rights. Creditors are always invited and welcome to participate in the bankruptcy process. It begins with filing a Form 31 Proof of Claim as evidence of the debt owed to them by the bankrupt.

Once they file their claim in the bankruptcy estate, the creditor now has the status to fully participate in the administration of the bankruptcy estate. The filing of the proof of claim allows the creditor to vote, either in person or by proxy. They now have the authority to participate and vote at the First Meeting of Creditors. They can vote for the appointment of Inspectors.

A creditor may notify the Trustee of any kind of inappropriate activities or transactions on the part of the bankrupt that hurt the interests of the creditors. For instance, a creditor may have knowledge of assets or deals that the bankrupt failed to declare. In many cases, creditors who have dealt with the debtor over many years will have better information than the Trustee initially can gain. A Trustee always welcomes this kind of assistance from creditors. If a creditor thinks there is misconduct or illegal activities on the part of the insolvent the creditor should advise the Trustee and the OSB.

A creditor can oppose a personal bankrupt’s discharge from bankruptcy. The grounds for opposing are set out in section 173 of the BIA. The creditor must inform the Trustee and the bankrupt of the opposition and the reasons in the proper form.

By filing the opposition, the bankrupt’s discharge hearing must now go to court to be adjudicated. The Trustee cannot provide the bankrupt with an automatic discharge, even if they have fulfilled all of their duties. The creditor will provide its evidence to the court to support the opposition. The Trustee must file a report on the conduct of the bankrupt both before and during the bankruptcy administration.

Based on all the evidence, the court will then decide what kind of discharge the personal bankrupt is entitled to; absolute discharge, conditional, and/or a suspended discharge. In certain cases, the court may issue a refusal to the bankrupt. That is what happened in the Nova Scotia case I will shortly describe.

This is what the bankruptcy meaning for the rights and duties of creditors are.

bankruptcy meaning

Bankruptcy meaning: Advising the bankrupt or the officer of the bankrupt corporation of duties

The Trustee must explain to the bankrupt or the officer of a bankrupt company, his/her responsibilities. The responsibilities are found in sections 158 and 159 of the BIA. The Trustee must also explain the bankruptcy offences. Those are outlined in sections 198, 199, 200, and 204 of the BIA.

The minimum level of information a Trustee can give to the bankrupt or the officer of a bankrupt corporation is (as applicable):

information on bankruptcy for consumer debtors;

the above essential passages from the Act;

responsibilities of a bankrupt or the officer of the bankrupt company; and

debtor financial information (type and guide).

In all cases, the bankrupt or the officer of the bankrupt company has to be served with a copy of the relevant sections of the BIA. The Trustee must also get an acknowledgment from the bankrupt, or officer of the bankrupt corporation, that she or he has actually been provided with, and understands his/her obligations. The signoff by the bankrupt/the company’s officer needs to be kept on file by the Trustee.

If a bankrupt or officer of the bankrupt company declines to sign, regardless of being offered, Trustees have to keep in their file details of the refusal (i.e. evidence of service as well as details as to the refusal).

Bankruptcy meaning: The duties of the bankrupt or the officer of the bankrupt corporation

The focus of the BIA is for personal bankrupt, to return the honest but unfortunate debtor back to society free of his or her debts. The premise is that the bankrupt, or the officer of the bankrupt corporation, will fulfill their duties with integrity and honesty. The duties are outlined in the OSB’s Directive No. 26. If you are interested, you can read them HERE.

But what if they don’t? What if the individual bankrupt does not fulfill all of their duties and essentially absents themself from the process once they have filed their assignment in bankruptcy. In that case, the Trustee has an obligation to oppose the bankrupt’s application for discharge and bring the matter to court. What is the bankruptcy meaning in such a case?

That is what happened in the Nova Scotia case that I will tell you about now. I believe it is very instructive.

Bankruptcy meaning: Why a bankrupt’s discharge hearing may come to court

The substantial majority of bankrupts execute their obligations under the BIA. As a result, only a minority of bankruptcies end up in court. Mr. Jewkes’ case is one of them.

The usual factors for a bankruptcy case needing to involve the court include:

outstanding financial disclosure; and/or
surplus income payment obligations.

Discharges for third or more bankruptcy filings also need to come to court for a discharge hearing. Occasionally, a creditor objects to the bankrupt’s discharge. All matters are listened to on their merits and a decision is rendered as appropriate for the particular bankruptcy meaning.

Sometimes, there has actually been a lack of action in a bankruptcy file due to a bankrupt’s own difficulties. She or he may have a mental or physical illness. They may have not have been able to communicate with the Trustee for completely valid reasons. They might have genuinely misunderstood the obligations incumbent upon them. It is the responsibility of the Trustee and, that falling short, the court, to set things straight.

And then there is Mr. Jewkes. None of the factors where the Trustee or the court could excuse him for a simple oversight or mistake which can easily be corrected were present.

Bankruptcy meaning: The Nova Scotia case

Mr. Jewkes filed an assignment in bankruptcy in 2019. He cited “relationship breakdown” as the reason for his bankruptcy. This was his first bankruptcy. He showed income on filing to put him just below the OSB’s guidelines for paying surplus income. His assets were minimal, although he did identify the sale of his old vehicle and a mobile home with little or no equity just prior to his bankruptcy.

His creditors were the normal run of the mill kind of creditors in consumer files:

credit cards;
an unsecured line of credit;
a collection agency was after him, possibly for another credit card debt;
two mobile phone accounts; and
a utility company.

And that is where it ended. He has actually not provided the required income and expense information. He has not offered the Trustee with details required to prepare and file his pre-bankruptcy or post-bankruptcy income tax returns. He has not gone to his two mandatory credit counselling sessions. He has not complied with his payment arrangement for the Trustee’s fee. He has not given corroboration or accounting for his pre-bankruptcy vehicle and mobile home sales. His discharge hearing was held in August 2020. He did not show up for his own discharge hearing either by video or telephone.

The Trustee requested that the hearing be adjourned. The Registrar in bankruptcy court was not prepared to use more court resources and he denied the Trustee’s request.

Rather, he had enough and let his feelings be known. The bankrupt got his stay of proceedings. Notice of the bankruptcy was mailed out to the creditors. The collection calls from creditors or collection agencies stopped.

Garnishments, if such existed, ended. After that, this bankrupt went on with life and took the attitude that everyone else can take a hike.

Bankruptcy meaning: The Registrar’s decision

The Registrar wanted to send a bankruptcy meaning message that this kind of behaviour will not be tolerated. The Registrar decided that this bankruptcy meaning message will be sent by the:

bankrupt’s application for discharge being refused;
bankrupt having leave to apply on his own for discharge once he has fulfilled all of his duties;
Trustee finishing the administration and applying for its discharge forthwith;
Trustee being directed, upon its discharge, to write to all known creditors advising of the Trustee’s discharge and that the effect under the BIA is that the stay of proceedings protecting the bankrupt has ended and all creditors are free to begin or resume collection action against him.

This fourth point is not normal. It is obvious that the Registrar was fed up with this bankrupt and others who feel they can avoid performing their duties. The Registrar wanted to send a strong bankruptcy meaning message.

bankruptcy meaning

Bankruptcy meaning summary

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team.

Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

Tags assignment in bankruptcy, bankrptcy, bankrptcy and insolvency act, bankruptcy meaning, bankruptcy process, BIA, code of ethics for trustees, duties of the bankrupt, financial counselling, Ira Smith Trustee, licensed insolvency trustee, Office of the Superintendent of Bankruptcy, officer of the bankrupt corporation, OSB, trustee, trustee in bankruptcy

Brandon Blog Post

BANKRUPTCY TRUSTEE: OUR COMPLETE GUIDE TO WHAT IS A LICENSED INSOLVENCY TRUSTEE

Post author By Brandon Smith
Post date October 14, 2020

Licensed Insolvency Trustees, licensed by the Canadian Government

A bankruptcy trustee (now called a Licensed Insolvency Trustee) is a person or company licensed to administer receiverships, bankruptcies, and proposals in Canada. We are licensed by the Office of the Superintendent of Bankruptcy Canada (OSB).

The role of the bankruptcy trustee is to help people and companies look at their financial situation and explore the various debt relief options. The Trustee can help with many possible debt solutions; much more than just filing bankruptcy. The Trustee looks at various ways the person or business can avoid bankruptcy first. Bankruptcy, which is the legal process for debtors to deal with their unsecured creditors, by discharging away their unsecured debt, including credit card debt and income tax debts, is the last resort.

In this Brandon’s blog, I provide my complete guide on how a bankruptcy trustee helps people and companies who are in a precarious financial situation because they have too much debt by providing insolvency services and helping people and companies through the Canadian insolvency process.

About Bankruptcy Trustees: what is a licensed insolvency trustee?

A Licensed Insolvency Trustee (LIT) is federally certified by the OSB. A trustee in bankruptcy is the old name for a LIT. LITs are the only debt professionals who are federally regulated and supervised professional that offers recommendations and solutions to individuals and businesses with financial problems.

LITs help people make informed choices to manage their debt difficulties. A bankruptcy trustee is the only expert licensed to carry out government-regulated insolvency proceedings such as:

privately-appointed or court-appointed receiver or receiver and manager to administer receiverships Bankruptcy and Insolvency Act Canada (BIA).
assisting people to restructure through consumer insolvency using a consumer proposal.
helping people who owe more than $250,000 (not including debts registered against their principal residence) and companies by making a proposal to creditors as alternatives to bankruptcy.
bankruptcy trustee/licensed insolvency trustee in a bankruptcy administration when a person or company is filing for bankruptcy.

As licensed insolvency trustees, we’re here to help: How do I become an insolvency trustee?

A person who wishes to acquire an individual licence may complete and file an application with the OSB. The following are required for the issuance of a personal licence under the BIA:

successfully passed the following, which is administered by the Canadian Association of Insolvency and Restructuring Professionals (CAIRP):
the Canadian Insolvency and Restructuring Professional (CIRP) Qualification Program (CQP) unless otherwise exempted;
the CIRP National Insolvency Exam; and
the insolvency counselling course;
paid the required fee;
the applicant shall be solvent;
the applicant must be of good character and reputation; and
passed the oral board of examination run by the OSB.

You need to pass the educational program run by CAIRP. In order to register, you need to be sponsored by a bankruptcy trustee. That LIT will most certainly be your employer. When you pass the final CQP exam, you are awarded the CIRP designation and then able to apply to sit before the OSB’s oral board of examiners.

bankruptcy trustee

***Trustees in Bankruptcy near you: How to find a bankruptcy trustee* in Canada**

If you are looking for a trustee in bankruptcy near you, there are three good ways to find one.

The best way to find a bankruptcy trustee is a referral from friends or family members. Although they themselves may have never filed for bankruptcy, perhaps they know someone who did. Or, maybe they know a lawyer they trust who can provide them with a name or two that could be passed on to you. A personal reference is the best way to go.

The second way is through the OSB. They maintain a searchable database of all LITs in Canada. You can look for a bankruptcy trustee located near you. The directory includes the office locations of all LITs. You can browse either by name, city or province.

The third way is to look for bankruptcy information online. Type into your favourite search engine a phrase like “ bankruptcy trustee”, “bankruptcy trustee near me”, bankruptcy trustee Vaughan ” or “ trustee in bankruptcy Toronto ” and start searching websites. Then call the one whose website seems to speak to you. You can make an appointment for a no-cost consultation to get all your questions answered. You may even want to try two or three so that you can compare approaches. Then you can select the bankruptcy trustee that you feel you could work best with.

The fee of a bankruptcy trustee in a summary administration bankruptcy – The Bankruptcy & Insolvency Act

A personal bankruptcy administration is called a “summary” bankruptcy administration when the realizable assets are estimated at $15,000 or less. This kind of filing for bankruptcy is many times referred to as “no assets, no income”.

Rule 128 of the BIA General Rules dictates the fee and disbursements of a bankruptcy trustee in a summary administration personal bankruptcy. The fee is fixed and is called a tariff. It is calculated as follows:

“128 (1) The fees of the trustee for services performed in a summary administration are calculated on the total receipts remaining after deducting necessary disbursements relating directly to the realization of the property of the bankrupt, and the payments to secured creditors, according to the following percentages:

(a) 100 percent on the first $975 or less of receipts;

(b) 35 percent on the portion of the receipts exceeding $975 but not exceeding $2,000; and (c) 50 percent on the portion of the receipts exceeding $2,000.

(2) A trustee in a summary administration may claim, in addition to the amount set out in subsection (1), (a) the costs of counselling referred to in subsection 131(2);

(b) the fee for filing an assignment referred to in paragraph 132(a);

(d) the amount of applicable federal and provincial taxes for goods and services; and (e) a lump sum of $100 in respect of administrative disbursements.” If there are no assets or surplus income that will provide cash in the bankruptcy administration, then the debtor, in order to retain the services of the bankruptcy trustee, needs someone to either guarantee the fee and disbursements or post a cash retainer with the LIT in order to file for bankruptcy.

The fees of the bankruptcy trustee in an ordinary bankruptcy

A bankruptcy is called an “ordinary” bankruptcy when the realizable assets are estimated at $15,000 or greater in personal bankruptcy. Every corporate bankruptcy is an ordinary administration.

In an ordinary administration, the trustee is entitled to the remuneration voted by the inspectors in the bankruptcy case. The inspectors are representatives of the creditors who were voted in at the First Meeting of Creditors. The fee must also be approved by the court.

The fee will be affected by the complexity of the bankruptcy case, how much work the LIT had to do to preserve and sell the assets and did the LIT obtain verifiable results that can be described as extraordinary. The time spent and the hourly rates of the bankruptcy trustee staff involved are the basis for calculating the fee in an ordinary administration.

The disbursements incurred are to be added to the fee and must also be taxed. If the bankruptcy trustee is unsure at the outset if there will be any realizable assets, the LIT will ask a third party to provide either a guarantee or cash retainer.

bankruptcy trustee

The consumer proposal fee for a bankruptcy trustee acting as administrator of a consumer proposal – The Bankruptcy & Insolvency Act

Rule 129 sets out how to calculate the tariff fee in a consumer proposal. As I stated above, one of the roles a bankruptcy trustee is licensed for is to act as the administrator of a consumer proposal This rule states:

“129 (1) For the purposes of paragraph 66.12(6)(b) of the Act, the fees and expenses of the administrator of a consumer proposal that must be provided for in a consumer proposal are as follows:

(a) $750, payable on filing a copy of the consumer proposal with the official receiver;

(b) $750, payable on the approval or deemed approval of the consumer proposal by the court;

(c) 20 percent of the moneys distributed to creditors under the consumer proposal, payable on the distribution of the moneys;

(d) the costs of counselling referred to in subsection 131(1);

(e) the fee for filing a consumer proposal referred to in paragraph 132(c);

(f) the fee payable to the registrar under paragraph 3(b) of Part II of the schedule; and (g) the amount of applicable federal and provincial taxes for goods and services.

Our regular readers of Brandon’s Blog will recall that in previous blogs that I wrote, I described what the BIA minimum requirements are for calculating how much a debtor should offer its creditors as a proposal fund in a consumer proposal. That calculation has nothing to do with what fee the licensed trustee acting as the administrator may be entitled to.

That is why any debtor thinking about filing a consumer proposal in order to avoid bankruptcy need not be concerned with how much they have to pay as a fee. The calculation as to what a reasonable proposal fund will be has zero relation to what the administrator’s fee will be. In this way, the fee of the bankruptcy trustee acting as administrator is no-cost!

The fee of the bankruptcy trustee for the administration of a Division I proposal

Readers of the Brandon Blog will remember that a consumer proposal is available for any individual who has $250,000 of debt or less, not including any debts secured against their personal residence. A Part III Divison I of the BIA proposal is available to all companies and to any person whose debts are too large to do a consumer proposal. Both are alternatives to bankruptcy Under either administration, a proposal is a debt relief plan sanctioned by the BIA. It is the only debt settlement plan authorized by the Government of Canada. Above I described how the fee and disbursements of a bankruptcy trustee in an ordinary bankruptcy administration must be approved by the inspectors and the court.

The same is true for the fee of the bankruptcy trustee acting as the licensed trustee in a Divison I proposal. The calculation of the fee will be very similar to an ordinary bankruptcy administration also. The only difference will be as required by the difference between a proposal and bankruptcy.

A proposal is a great alternative to bankruptcy.

Only a bankruptcy trustee can act as a receiver

Section 243(4) of the BIA states that only a bankruptcy trustee can be appointed as a receiver. It does not matter whether the receiver will be privately or court-appointed. The calculation of the receiver’s fee is based on the hours worked and the hourly rate charged by the respected staff working on the file.

In a private appointment, the fee must be approved by the appointing secured creditor. In a court appointment, the fee must be approved by the court.

bankruptcy trustee

Bankruptcy trustee summary

I hope you have enjoyed this bankruptcy trustee Brandon’s Blog. Hopefully, you have better insight now into the many roles played by a LIT. As part of any bankruptcy or proposal administration, there are two mandatory credit counselling sessions also. So, the LIT also acts as a credit counsellor.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team That is why we can develop a restructuring process as unique as the financial problems and pain you are facing.

If any of this sounds familiar to you and you are serious about finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

Tags Bankruptcy, Bankruptcy and Insolvency Act (BIA), bankruptcy trustee, bankruptcy trustee near me, bankruptcy trustee toronto, Consumer Proposal, Division I Part III proposal, how do i become an insolvency trustee, Ira Smith Trustee, licensed insolvency trustee, LIT, Office of the Superintendent of Bankruptcy, ordinary administration, ordinary bankruptcy, OSB, receiver, receivership, Summary Administration, what is a licensed insolvency trustee

Brandon Blog Post

INSOLVENCY AND BANKRUPTCY ACT: ANTI-DEPRIVATION RULE COMPLETELY VALID IN INSOLVENCY

Post author By Brandon Smith
Post date October 12, 2020

If you would prefer to listen to an audio version of this Brandon’s Blog, please scroll to the very bottom and click on the podcast.

Insolvency and bankruptcy act introduction

On October 2, 2020, the Supreme Court of Canada (SCC) rendered its decision in Chandos Construction Ltd. v. Deloitte Restructuring Inc., 2020 SCC 25 (Chandos decision). This decision upheld the idea that the anti-deprivation rule is completely valid when it pertains to both personal and business insolvency and bankruptcy act cases.

In this Brandon’s Blog, I describe the Chandos case and what it stands for.

**The definition of the word deprive and the insolvency and bankruptcy act context**

The Merriam-Webster dictionary states the definition of the word deprive is:

1: to take something away from; and
: to withhold something from.

In the Chandos Construction Ltd. (Chandos) insolvency and bankruptcy act case, the SCC was asked to rule on contract clauses that if upheld, would deprive the bankruptcy estate and therefore the unsecured creditors of money that would otherwise be available. This deprivation of funds, which may make total sense as between contracting parties, is not enforceable in bankruptcy.

**The anti-deprivation rule in the Canadian insolvency and bankruptcy act matters**

Neither the Bankruptcy and Insolvency Act (Canada) (BIA) nor the Companies’ Creditors Arrangement Act (CCAA) stops non-defaulting parties to a contract, from relying upon agreement provisions that create an inevitable result when a debtor declares bankruptcy. The common law becomes pertinent in these situations.

Canadian courts still refer to these anti-deprivation provisions as “ipso facto” provisions and also this idea as the fraud upon the bankruptcy law concept. In more current times, this has been described as the anti-deprivation rule.

The SCC has recognized the anti-deprivation rule since the 1890s. However, the contemporary application of this principle in Canadian law greatly originates from an Ontario court decision in 1995 – Canadian Imperial Bank of Commerce v. Bramalea Inc., 1995 CanLII 7262 (ON SC) (Bramalea decision).

This is a decision from the Ontario Court of Justice (General Division). Canadian courts have thought about and decided upon the anti-deprivation rule in many insolvency and bankruptcy act cases since then.

**The Bramalea case and its relevance of insolvency and bankruptcy act matters**

Luckily for me, Ira Smith was the receiver responsible for the file that involved the Bramalea decision. So, I have a bird’s-eye view of that case which started it all leading to the SCC Chandos decision.

In the Bramalea insolvency and bankruptcy act case, a group of companies, including Bramalea Inc. (Bramalea) was in a partnership agreement to develop and operate a shopping mall in Markham, Ontario called Shoppes on Steeles. In 1995, Bramalea was placed into receivership and bankruptcy. Bramalea’s partners included Sears Canada and a private real estate development company.

Amongst the different provisions of the partnership agreement was a specific provision in the contract which considers insolvency. It said that, in case of the insolvency of any of the partners, the non-insolvent partner(s) (given it does not waive the event of insolvency) can buy the interest of the financially troubled partner at the lesser of book value or fair market value.

The paradox of this case was that the large company partners at the time of the drafting of the partnership contract were concerned about what happens if the private property developer one day became insolvent? None of the partners ever believed that it would be that private company that would be the only one that was not insolvent. We all know what happened to Sears Canada!

The moving parties sought to exercise that right by serving a notification to buy the Bramalea passion at book value, approximated to be around $200,000. This was opposed by the receiver and also other stakeholders.

The receiver gave evidence that the fair market price surpassed book value by as much as $2 million to $3 million. The moving parties acknowledged that the fair market value of Bramalea’s stake in the partnership was more than book value. They did not agree with the receiver’s evidence regarding the amount of that difference. They additionally did not submit their own fair market valuation.

**The Bramalea insolvency and bankruptcy act decision**

Based on the evidence, the court took the view that the specific spread between book value and fair market value was not trivial. The court was satisfied that the distinction is greater than marginal, and enough to properly draw the interest of the receiver and the creditors.

The receiver’s position was that there is a higher principle in play and that the concern is not one of hindering the freedom of contract. Rather it was just one of whether or not that part of the partnership contract is void as being contrary to the public interest.

The receiver submitted that while the arrangement might quite possibly stand as between the contracting parties, it is void as against the receiver and also the bankruptcy trustee in the Bramalea insolvency and bankruptcy act proceedings.

The court agreed with the receiver’s position in this insolvency and bankruptcy act case. The court decided that it was clear from the provisions of the partnership agreement itself that the parties contemplated a transfer to one of the partners of the other partner’s partnership interest, only in case of insolvency, at a price less than what could be acquired for that interest on the open market.

The court specified that this stipulation made perfect sense, as between the contracting parties. It made total sense in regards to maintaining their partnership and their respective interests. Nevertheless, the court likewise specified that the clause cannot survive through the scrutiny of the “fraud on the bankruptcy law” principle.

The receiver ended up selling Bramalea’s partnership interest to the other partners for fair market value.

insolvency and bankruptcy act

**The Chandos Alberta court case and the anti-deprivation rule for insolvency and bankruptcy act matters**

Chandos was the general contractor for a condo project contracted with Capital Steel to give $1.3 million worth of steelwork. In the subcontract, Capital Steel agreed that if it became insolvent, Chandos was entitled to all costs arising from the suspension of the contract and it would forfeit 10% of the total subcontract price as an inconvenience fee. Capital Steel performed the majority of its commitments, nevertheless, it filed an assignment in bankruptcy before completing full performance.

As a result, Chandos was forced to finish the contract at an estimated expense of $22,800. Up until that point, Chandos owed Capital Steel $149,618 in outstanding invoices for the job it had performed.

Chandos relied upon the agreement and said that it was qualified to deduct its cost of finishing the job plus 10% of the total contract cost from the amount owing. Given the price of the subcontract, the 10% deduction eliminated Chandos’ balance owing plus an extra amount of $10,511. Chandos declared that gave them a provable claim in the Capital Steel insolvency and bankruptcy act case.

The Trustee’s application to the Alberta Court of Queen’s Bench

On March 6, 2017, the Trustee applied to the Alberta Court of Queen’s Bench seeking advice and directions on whether Chandos was entitled to rely on the provision in the contract or was it void pursuant to the anti-deprivation rule in common-law.

The chambers judge acknowledged that the common law anti-deprivation rule stops parties from contracting out of insolvency and bankruptcy act regulations. The judge stated that if that provision was a liquidating damages provision as opposed to a penalty, it would not violate the rule.

The chambers judge ruled that the condition was an authentic pre-estimate of costs, which imposed liquidated damages and not a penalty. He additionally held that the provision represented a bona fide commercial arrangement that did not have as its predominant objective the deprivation of Capital Steel’s property. Consequently, the chambers judge decided that Chandos can implement the clause against the Trustee.

**Trustee appeals the Chandos insolvency and bankruptcy act decision to the Court of Appeal for Alberta**

The Trustee appealed the Chandos decision to the Court of Appeal for Alberta. The appellate court reviewed the lower court decision in this insolvency and bankruptcy act case and decided that:

The chambers court properly determined the presence and application of the fraud on the bankruptcy law principle in Canada.
In describing the scope of the anti-deprivation rule, however, the chambers judge erred.
The lower court embraced the purpose-based technique set out by the Supreme Court of the United Kingdom
The appropriate technique is to check out the impact of the provision. Its purpose is a different analysis.
Chandos certainly had a genuine commercial interest it was looking to protect.
However, the clause conflicts with the BIA‘s scheme of distribution. The common law anti-deprivation rule revokes the clause and Chandos cannot count on it to defend its claim against the Trustee.

**Chandos appeals to the SCC in this insolvency and bankruptcy act anti-deprivation rule case**

One of the key goals of the insolvency and bankruptcy act law is to make certain there is a fair distribution among creditors. In order to fulfill the objective, the legislation restricts specific contractual stipulations that trigger when one of the parties goes into insolvency proceedings (ipso facto clauses).

As seen in the Bramalea situation, one of these limitations is the anti-deprivation rule. It holds that ipso facto conditions that rob the debtor’s creditors of assets they are qualified to receive in insolvency and bankruptcy act matters are void. This is likewise what the Court of Appeal for Alberta decided. Chandos appealed that decision to the SCC.

The Chandos appeal was heard on January 20, 2020. The SCC split decision was released on October 2, 2020. On the facts of Chandos, the SCC dismissed the Chandos appeal. The SCC refused to promote a contractual stipulation that the subcontractor Capital Steel waive 10 percent of the agreed price if Capital Steel became insolvent or bankrupt.

The SCC majority maintained that the test for application of the contractual provision is effects-based and not purpose-based. The SCC majority confirmed that the anti-deprivation rule stands under Canadian common law and it has not been eliminated in dismissing the appeal in this corporate insolvency and bankruptcy act case.

insolvency and bankruptcy act

Insolvency and bankruptcy act summary

I hope you have enjoyed this insolvency and bankruptcy act Brandon’s Blog. Hopefully, you have better insight now into the fact that a sick insolvent company’s business can be saved by doing a sale of its assets to a healthy organization.

We know that people facing financial problems need realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team.

Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

Tags anti-deprivation rule, Bankruptcy, bankruptcy estate, bankruptcy trustee, bramalea, Canadian Imperial Bank of Commerce v. Bramalea Inc., capital steel, chandos construction, Chandos Construction Ltd. v. Deloitte Restructuring Inc., fraud on the bankruptcy law, insolvency, insolvency and bankruptcy act, ipso-facto, ira smith team, Ira Smith Trustee, licensed insolvency trustee, receiver, trustee, unsecured creditors

Brandon Blog Post

BANKRUPTCY SURPLUS INCOME: OUR ESSENTIAL GUIDE 4 YOU

Post author By Brandon Smith
Post date October 7, 2020

Bankruptcy surplus income introduction

I have written many blogs about personal bankruptcy and consumer proposal insolvency matters over the recent past. I notice though that it has been many years since I have written about bankruptcy surplus income. I refer to it in many of my Brandon’s Blogs but have not described it in detail in quite a while.

In order to correct that situation, here I discuss the concept and application of bankruptcy surplus income in personal bankruptcy filings.

**What is bankruptcy surplus income?**

Surplus income is perhaps an inadequately worded expression. Very few individuals would certainly really feel that they have surplus income, especially when dealing with financial debt. Nonetheless, in the bankruptcy context, surplus income describes a calculation that figures out just how much cash monthly an individual must be paying into their bankruptcy estate for the benefit of their creditors.

When you file for personal bankruptcy in Canada you are able to retain most of the income that you make monthly. In order to have a practical level of living during the bankruptcy period, the Office of the Superintendent of Bankruptcy Canada (OSB) establishes a net month-to-month earnings standard.

These earnings criteria take into consideration annual inflation and are derived from information collected by Statistics Canada annually. What you pay to your licensed insolvency trustee (Trustee) into your bankruptcy estate every month is determined by these standards. They are used to decide if a bankrupt has any bankruptcy surplus income.

I have to warn you though. The practical standard of living that the OSB permits is actually the Canadian poverty line. It matters not if you reside in one of Canada’s most pricey cities or in a rural area. There are no regional modifications made. The OSB lays out the meaning and calculation in its Directive No. 11R2. Every year the OSB updates the exemption limitations.

Click on this link for the up to date bankruptcy surplus income 2020 Directive No. 11R2-2020.

What happens to a person’s wages during bankruptcy?

You are still allowed to earn money and collect your wage or salary when you apply for bankruptcy under the Bankruptcy & Insolvency Act (Canada) (BIA). As a matter of fact, lots of people apply for bankruptcy because their wages, salary, or bank account are being garnisheed or frozen either by Canada Revenue Agency (CRA) or a judgment creditor. As I have written in several Brandon’s Blogs, the filing of an assignment in bankruptcy knocks out the garnishee against your wages or salary and/or the freeze on your bank account.

Now that there is no longer a garnishee, your earnings on an after-tax basis are readily available to you. The Canadian bankruptcy process, which strives for fairness, states that your after-tax income is now available for contribution to bankruptcy surplus income. To provide you a feel for the personal exemptions permitted, on an after-tax basis, as established by the OSB, here is the 2020 table the Trustee needs to work off of:

Superintendent’s Standards – 2020

bankruptcy surplus income

How it works is that you look at the table and pick first how many persons are in your household. The next column marked “S” and “N”, is the exemption that the OSB standard that it gives your family. You can then do one of two things: (1) go across the top of the table that resembles the closest your household after-tax income (the household’s, not just yours); or (2) if you know the calculation, do the exact calculation.

bankruptcy surplus income

Bankruptcy surplus income limits for 2020 Canada

To have bankruptcy surplus income payable, your after-tax regular monthly earnings need to be $200 or greater than the limit established by the OSB. The exact computation is to add the bankrupt’s after-tax monthly earnings to the bankrupt spouse’s after-tax month-to-month revenue, and the same for anyone else in the family that is contributing their income for household expenditures.

Take that sum and deduct your allowed exemption. Then subtract the reasonably few unique extra exemptions, if appropriate:

medical expenses;
support payments
child care expenses
court-imposed fines or penalties
expenses as a condition of employment.

After that take the bankrupt’s percent of the complete household income bankruptcy surplus income which you just computed. Split that number in half which is the month-to-month surplus income that the bankrupt must pay.

So for example, take a look at the calculation below for an imaginary family of two where both spouses work and there are no extra special deductions:

Family Situation (Family unit of two)

Bankrupt’s available monthly income	$2,800
Add: Other family unit member’s available monthly income	1,000
Family unit’s available monthly income	$3,800
Minus: Superintendent’s standard for a family unit of two	2,793
Total monthly surplus income	$1,007
Family Situation Adjustment (2800 ÷ 3,800 = 73.68% $1007 × 73.68% = $741.96)	$741.96
Payment required from bankrupt ($741.95 × 50% = $370.98)	$370.98

Bankruptcy surplus income calculator

To help you better understand everything that goes into the calculation, I want to share with you a tool I use to calculate bankruptcy surplus income. I am providing you with the link to the same spreadsheet that I use to do the calculation.

Here is the link:

Bankruptcy surplus income calculator

Your income is checked by the Trustee on a month-to-month basis and is balanced out over the entire period of your bankruptcy. If you have a short-term boost in earnings, such as from a bonus or commissions, or a short-term reduction, such as a temporary layoff, this will be factored in.

**When do bankruptcy surplus income payments end?**

For a 1st time bankrupt, without surplus income, you are entitled to get an automatic discharge after 9 months. This requires that neither the Trustee nor a creditor has opposed your bankruptcy discharge. If you are a 1st time bankrupt yet you do have surplus income, then you need to make monthly bankruptcy surplus income payments for 21 months. You are then entitled to an automatic discharge if all your surplus income payments are made and there is no opposition to your discharge.

If you have actually been bankrupt before and this is your 2nd (or more) bankruptcy, you will not have the ability to obtain a discharge in 9 months. Your bankruptcy will certainly be lengthened. A 2nd + bankruptcy lasts for a minimum of 24 months. If you have surplus income, a second-time bankrupt will certainly not have the capacity to obtain a bankruptcy discharge for 36 months. The monthly bankruptcy surplus income payments must be made for the very same 36 months.

Can I file bankruptcy if I make too much money?

The test to file for bankruptcy is not how much money do you make. The test is:

are you insolvent; and
have you committed one or more acts of bankruptcy within the six months preceding the filing of an assignment in bankruptcy or the launching of an application for a bankruptcy order.

But if you do make a lot of money, and go into bankruptcy, then no doubt you will have a large bankruptcy surplus income obligation to pay to the Trustee every month. That large amount may not fit into your monthly budget. You may not be able to afford that monthly bankruptcy surplus income payment.

So what can you do? You should speak to a Trustee about filing either a consumer proposal or a Division I Part III proposal. Both are filed under the BIA. Why? Depending on your assets, a proposal may work better for you. Although your proposal would have to be a better alternative for your creditors than your bankruptcy, it gives you the advantage of terming out the monthly payments.

It may work out that for a little more, you can get up to 60 months to pay. So rather than having only 24 or 36 months to make your total payment, as the case may be, you could get 60 months to pay only a bit more. Obviously, the proposal is more gentle on your budget than a bankruptcy. It is also easier on your credit score and credit report.

Bankruptcy surplus income summary – Are you in financial trouble?

To declare personal bankruptcy is a major life event. However, it is a necessary thing to rid yourself of crippling debt. Most people who declare bankruptcy have been faced with a major life event. The main examples are illness, pay cuts, job loss, or divorce. It is not your fault. I hope this bankruptcy surplus income Brandon’s Blog has given you helpful information.

You are worried because you are facing significant financial challenges.
It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

We know that people facing financial problems need realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious about finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.
Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

Tags assignment in bankruptcy, automatic discharge, Bankruptcy & Insolvency Act (Canada) (BIA), bankruptcy order, bankruptcy surplus income, bankruptcy surplus income calculator, can i file bankruptcy if i make too much money, Consumer Proposal, Directive No. 11R2, Division I Part III proposal, Ira Smith Trustee, licensed insolvency trustee, Office of the Superintendent of Bankruptcy Canada (OSB), personal bankruptcy, Superintendent's Standards – 2020, surplus income, trustee, when do bankruptcy surplus income payments end

Brandon Blog Post

BANKRUPTCY DISCHARGE CERTIFICATE CANADA: THE COMPLETE HAPPY STORY OF YOUR BANKRUPTCY DISCHARGE

Post author By Brandon Smith
Post date October 5, 2020

If you would like to listen to the audio version of this Brandon’s Blog, please scroll to the bottom and click on the podcast

Bankruptcy discharge certificate Canada introduction

What is a bankruptcy discharge? When a bankrupt is discharged from bankruptcy, he/she gets a bankruptcy discharge certificate Canada. The individual is launched from the legal responsibility to repay financial debts that existed on the day that the bankruptcy was filed. This is true other than for certain financial debts that are not discharged when the insolvent receives his/her discharge which I will go over listed below.

Usually, only personal bankrupts are discharged from bankruptcy. Companies that are bankrupt remain that way. The only method a company can exit from bankruptcy is if the claims of creditors are paid off with interest. This never occurs. If it could, the company would have submitted a restructuring strategy under either the Bankruptcy and Insolvency Act (Canada) (BIA) or the Companies’ Creditors Arrangement Act (Canada) (CCAA).

Therefore, the balance of this Brandon’s blog will talk about an individual person who receives a bankruptcy discharge certificate Canada.

**Who can issue a bankruptcy discharge certificate Canada?**

Only a Canadian licensed insolvency trustee (Trustee) can carry out the bankruptcy administration and then provide the bankruptcy discharge certificate Canada. If neither the Trustee nor a creditor opposed the discharge and the Trustee issued the certificate, that means the bankrupt individual satisfied all of their obligations without the need for a court hearing.

If either the Trustee or a creditor opposes the discharge of the bankrupt individual, by issuing a notice of opposition to discharge, that indicates:

In the case of a Trustee opposition, that means the bankrupt did not fulfill all of their duties as an undischarged bankrupt when the time came for the Trustee to make that determination if the bankrupt is entitled to a discharge.
One or more creditors believe there is information that needs to be evaluated by the court to determine what kind of discharge from bankruptcy the person should get if any.

The court would then determine what type of bankruptcy discharge the bankrupt should receive:

absolute – entitled to an immediate discharge;
conditional – can obtain a discharge after fulfilling one or more conditions;
suspended – the bankrupt’s discharge will occur at a later date and is combined with either an absolute bankruptcy discharge or conditional bankruptcy discharge;
refused – the bankrupt’s discharge is such that the court refuses to hear the application; or
“no order” – the Trustee advises the court that notwithstanding the time period has elapsed, the bankrupt has not properly fulfilled all of his or her duties and the bankrupt has failed to respond to the Trustee’s requests. In this case, once the “no order” order is issued, the Trustee is at liberty to seek its discharge (more on this below).

Once the bankrupt person has fulfilled the conditions set by the court and/or the suspension period has ended, the Trustee can then issue the bankruptcy discharge certificate Canada.

Bankruptcy discharge certificate Canada: How long will I be bankrupt?

For a 1st time bankrupt person, many will certainly qualify for an automatic discharge after 9 months.

If you have been bankrupt before a second bankruptcy discharge will not be able to get a discharge in 9 months. Your bankruptcy will be prolonged. A 2nd bankruptcy lasts for a minimum of 24 months. If you have surplus income, a second-time bankrupt will not have the ability to get a bankruptcy discharge certificate Canada for 36 months.

For a 3rd time bankrupt, the timeline is the same as the 2nd time bankrupt. Nonetheless, it is more probable that there will be resistance to that bankrupt’s discharge by the Trustee or one or more creditors. The court can prolong the time in whichever means it believes is most suitable.

Bankruptcy discharge certificate Canada: Who tells my creditors that I am discharged from bankruptcy

The Trustee will notify the Office of the Superintendent of Bankruptcy (OSB) that the individual has been released from bankruptcy. The Trustee advises the OSB by filing a copy of the bankruptcy discharge certificate Canada. The Trustee advised the creditors that the insolvent is qualified to a discharge unless an opposition is filed in the bankruptcy notification sent out to all creditors.

The Canadian credit bureaus, Equifax Canada and TransUnion Canada are notified because they pay the OSB to get Canadian bankruptcy information. The credit bureaus then update all credit files with the corresponding bankruptcy info, including discharges.

Bankruptcy discharge certificate Canada: What debts are not forgiven and will survive my bankruptcy?

What debts cannot be discharged? A bankruptcy discharge certificate Canada provides the discharge of all unsecured debts, except for:

matrimonial or children support payments;
fines or penalties mandated by the court;
claims arising from fraud or fraudulent breach of trust;
student loan debt if less than 7 years have actually passed since the bankrupt stopped being a part-time or full-time student.

These kinds of debts survive bankruptcy and are not released. The person will need to continue paying those financial obligations according to their terms. All other debts are discharged and do not have to be paid.

Also, any debts that are properly secured by one of your assets, such as a house mortgage or car financing, are not released as a result of your bankruptcy or your bankruptcy discharge certificate Canada.

Bankruptcy discharge certificate Canada: What if my creditors still contact me and try to get me to pay them?

If the creditors are consistently calling you and demanding settlement, supply them with a duplicate of your bankruptcy discharge certificate Canada. If the creditor states they were not aware of your bankruptcy, also offer them a duplicate of your sworn statement of affairs revealing them listed as a creditor.

If they are listed, then the Trustee sent them a notice of bankruptcy including a form 31 proof of claim to complete and return to the Trustee.

Bankruptcy discharge certificate Canada: What does trustee discharge mean?

After the Trustee has fully completed the administration of the bankruptcy estate, the Trustee is entitled to its discharge. The Trustee must prove to the OSB that it has completed the administration. This includes providing the OSB with a copy of the Final Statement of Receipts and Disbursements to get the Superintendent’s comment letter.

Then the Trustee must provide the final statement, the comment letter, and other documents to the court to prove that the administration is complete, get the final statement approved, and taxed. When that happens, the court issues the Trustee’s discharge order. The Trustee then files that order with the OSB and closes its file.

It is possible for the Trustee to receive its discharge while the bankrupt remains undischarged. This happens either when the result of the bankrupt’s discharge hearing results in a “no order” (see definition above) or sufficient time has elapsed showing the bankrupt is not going to fulfill the conditions to get a discharge. In this case, the Trustee is at liberty to get its discharge.

Once the Trustee gets its discharge, an undischarged bankrupt loses the protection of the automatic stay of proceedings that were invoked upon the bankruptcy occurring. Once this protection is lost, the creditors are at liberty to once again pursue the bankrupt person for collection on the debts owing.

Bankruptcy discharge certificate Canada: what if I fail to include one of my creditors in my bankruptcy?

If I failed to remember to include one of my creditors in my bankruptcy do I need to pay them? If your Trustee hasn’t been discharged yet, simply tell the creditor to call your Trustee to participate in your bankruptcy.

If your Trustee has actually been discharged then the creditor is qualified to be paid the same returns (% of the debt) your other creditors obtained from your bankruptcy. You will need to pay this amount.

If you intentionally omitted the lender from your bankruptcy (the obligation is on the lender to verify this) after that the lender can ask the court to enable their financial obligation to survive, and if successful, you will need to pay the full amount.

Bankruptcy discharge certificate Canada: What are the benefits of keeping my bankruptcy discharge papers?

As reviewed above, after you have actually successfully finished every one of your bankruptcy responsibilities and any kind of conditions of discharge, you will receive your discharge from bankruptcy. When you get your bankruptcy discharge your Trustee will give you a bankruptcy discharge certificate Canada.

That paper is proof that you have actually formally been launched from your financial debts that were included in your bankruptcy. As already stated, particular financial obligations can’t be discharged in bankruptcy. Also, any type of debts that you sustain after the day of your bankruptcy are your responsibility as well as are not eliminated by your bankruptcy discharge.

Bankruptcy discharge certificate Canada: How long does my credit score take to recover from bankruptcy?

Your bankruptcy will stay on your credit report for 6 years from the date your bankruptcy discharge certificate Canada is issued. If you have actually been bankrupt more than once, then it might be reported for approximately 14 years from the date of your discharge.

Having actually removed your financial obligation problems by getting your bankruptcy discharge certificate Canada, most individuals see they now have the ability to construct a more powerful financial future. Unless you urgently need to purchase a house for the very first time or buy an auto, you need not also bother with getting approved credit to take on debt right away. Many find they have the ability to live without credit considering that they have a more powerful cash flow than prior to bankruptcy. They are now able to start saving.

While you remain in bankruptcy, you are learning to live your life without credit. You are living essentially on a cash basis. You are not spending more than you make. Your Trustee is advising you to do so on an after-tax basis so that you will not have a nasty surprise when tax time comes.

Bankruptcy discharge certificate Canada: 2 simple steps to improve your credit score after your discharge from bankruptcy

This remains for the first 2 or three years after you have actually completed the bankruptcy process. Throughout this time access to credit will be restricted.

We encourage all our bankrupts, once discharged, to immediately start rebuilding their credit. You can slowly start rebuilding your credit through 2 simple steps:

Apply for a secured credit card. This kind of credit card works on the basis that you deposit money against the card with the secured credit card issuer. You then use the credit card like any other. If you pay it off each month, this gets reported to the credit bureaus. This proper use of this credit helps to improve your credit score. If you do not pay the card off when due, the issuer takes the money from your deposit to pay it off.
Take out a small RRSP or TFSA loan. The funds are deposited into your RRSP or TFSA. Make monthly payments against the loan so that the principal and interest are all fully repaid within 1 year. Start small. The important thing is that you do what your cash flow allows. The fact that you are current on your loan is reported monthly to the credit bureaus. This helps to improve your credit score.

Keep in mind that if you do not stay current in paying off your secured credit card balance or your loan, this will further hurt your credit score. The idea is that you have saved this money each month so that you are able to make the monthly payment.

Bankruptcy discharge certificate Canada summary

To declare personal bankruptcy is a major life event. However, it is a necessary thing to rid yourself of crippling debt. Most people who declare bankruptcy have been faced with a major life event. The main examples are illness, pay cuts, job loss, or divorce. It is not your fault. I hope this bankruptcy discharge certificate Canada Brandon’s Blog has given you helpful information.

You are worried because you are facing significant financial challenges.
It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

We know that people facing financial problems need realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.
Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

Tags Bankruptcy, bankruptcy and insolvency act canada, bankruptcy discharge, bankruptcy discharge certificate, bankruptcy discharge certificate canada, Companies’ Creditors Arrangement Act, discharged from bankruptcy, form 31 proof of claim, how long does my credit score take to recover from bankruptcy, licensed insolvency trustee, Office of the Superintendent of Bankruptcy, OSB, trustee, undischarged bankrupt, what debts cannot be discharged, what if I forgot to include one of my creditors in my bankruptcy

Brandon Blog Post

DECLARE BANKRUPTCY: A COMPLETE GUIDE ON WHAT IS IT LIKE TO DECLARE BANKRUPTCY

Post author By Brandon Smith
Post date September 30, 2020

What is it like to declare bankruptcy?

What is it like to declare bankruptcy? It is a scary life event, but filing bankruptcy is not as bad or terrifying as the majority of people think. Actually, you have already been through the worst of it before you declare bankruptcy.

If it’s the right option for you, it will get rid of the tension, stress, and anxiety from your life that you have been lugging with you for a very long time. It does not require that much of your time. You will usually have 3 to 4 visits with the licensed insolvency trustee (formerly called a bankruptcy trustee) (Trustee). If all works out, you will never ever see the inside of the bankruptcy court and all your debt will be removed.

The purpose of this Brandon’s Blog is to describe what it is like to declare bankruptcy and what the bankruptcy process is all about.

When to declare bankruptcy

Bankruptcy law exists to help people who have handled an unmanageable amount of debt. Most of the time, it is a result of unforeseen expenses or other unexpected life events that are no fault of the person. Two main examples of such life events are job loss and illness.

Before deciding to declare bankruptcy, make sure to explore all your alternatives, and weigh the benefits and negative aspects of each reasonable option. Part of the no-cost examination we give everyone is doing precisely that; going through the alternatives, taking into consideration the pluses and minuses of each, and making our ideal professional recommendation to every person’s unique scenario.

If you determine that bankruptcy is your only viable alternative as lots of other Canadians do each year remember that the blot on your credit score will not be forever. By using credit properly in the future and paying your debts on time, you can begin to reconstruct your credit rating and put bankruptcy behind you.

To declare bankruptcy, either a bankruptcy restructuring or bankruptcy liquidation likewise assists companies that have unrestrained debt levels. We also offer solutions to companies and businesses searching for debt settlement help.

declare bankruptcy

**What are the consequences for a person to declare bankruptcy?**

Everyone assumes that if you declare bankruptcy, it takes a massive emotional toll on you. Our experience in working with people we help is the exact opposite. Their financial debts, the fear of not having the ability to pay it off along with the anxiety of the unknown is what is devastating to everyone.

Once people declare bankruptcy, they tell us that the automatic stay of proceedings and the involvement of the Trustee stopping creditors’ collection calls are great benefits. Individuals that file for bankruptcy have already looked over the cliff and feared the worst. When they figure out that their worst worries never happen, and they currently have peace and quiet from collection phone calls, they feel like a weight has been taken off of them. As we tell people, your creditors will certainly now bother the Trustee, not you!

Your bankruptcy is a matter of public record. The Office of the Superintendent of Bankruptcy (OSB) maintains a public database. The Trustee alerts your creditors, Canada Revenue Agency (CRA) as well as the OSB of your filing. People can look up any name they wish for $8 per search. Although it is public, very few people spend money to browse the OSB database. It is mainly for Equifax and TransUnion to place on your credit history report. It is also for the federal government to keep data concerning people and companies that declare bankruptcy in Canada. There are no billboards or flashing neon lights with your name on it for all the world to see.

The most effective repercussion when you declare bankruptcy is that you have the chance to release either all or most of your financial debts and start life once again hassle-free.

**How do I declare bankruptcy?**

Anybody who is insolvent and owes more than $1,000 qualifies for personal bankruptcy or also known as a consumer bankruptcy filing in Canada. If you are having a problem meeting your financial responsibilities or have actually stopped satisfying them, you remain in financial trouble.

The primary step is to get in touch with a federally licensed Trustee asap to discuss your options. The Trustee will certainly initially collect info from you regarding your assets, liabilities, your household income, and expenses. This allows the Trustee to get a very good understanding of your one-of-a-kind situation.

You and the Trustee will then review your choices. Bankruptcy is just one of the feasible range of options. There are numerous bankruptcy alternatives which include, however, are not restricted to, debt consolidation and consumer proposals.

The Trustee will use the information you gave to prepare the bankruptcy forms. When you declare bankruptcy, of the various bankruptcy files the Trustee prepares, you are signing, and the Trustee is filing what is called an assignment in bankruptcy.

**What should I do before I declare bankruptcy?**

Many people think there are several things they should do before they declare bankruptcy. Common questions include:

Should I transfer my interest in the matrimonial home to my spouse?
When should I transfer the cash in my bank account to my spouse’s bank account?
Should I stop working or not look for work so that I will not have to make any surplus income payments?

The reality is that by the time you are contemplating bankruptcy, it is too late. The time to do your valid creditor proofing is not when you are insolvent, but when you are solvent! When you are not experiencing any financial problems.

Transferring assets most likely will be successfully attacked by the Trustee. That means that the Trustee will go after the person you have transferred assets to for no or little value. You will not only have protected assets, but you will also have caused your loved one to incur legal costs and have to cough up the assets.

Declaring bankruptcy is an emotional as well as a scary thing. There is only one thing you should do before you declare bankruptcy. You must meet with a Trustee for a no-cost initial consultation and be honest with them. Make full disclosure so that the Trustee can provide you with your realistic options. The Trustee will also fully explain to you what the process will look like and what might happen to you if you declare bankruptcy.

When is bankruptcy a good idea? The answer depends on your situation

Bankruptcy is not naturally negative or excellent, but it is vital for the honest but unfortunate debtor who finds themselves in big trouble with financial debt. Bankruptcy is actually for honest people that have come upon tough times. They need to look to bankruptcy due to the fact that they can’t see a way out. Even the Bible calls for debt mercy at the end of every 7 years (Deuteronomy 15:1).

If you find yourself in a hard financial situation and cannot see a way out, meet with a Trustee. Do not let fears or stereotypes stand in the way of getting the relief and your household need. To declare bankruptcy must be considered as taking a positive step in helping you and your family begin again on the right track.

declare bankruptcy

**Is filing bankruptcy bad? Can it be good?**

You’ll listen to a great many people effectively say: “bankruptcy is bad”. Yet why? Why is the general consensus that filing for bankruptcy is a negative thing? While it is true that when you declare bankruptcy or a consumer proposal it is evidence of difficulty with your finances, that’s not the whole story.

A large part of the reason that people state bankruptcy is bad is that they do not understand the procedure. No two bankruptcy instances are alike. People are forced into bankruptcy for a whole host of different factors, most of which are outside their control and for that reason, not their fault.

What Happens to a company when it goes to declare bankruptcy?

The BIA regulates exactly how companies can liquidate or restructure and recover from crippling debt. An insolvent company may make use of Part III Division I of the BIA to reorganize its business and try to end up being profitable again. Management remains in place to run the daily activities of the company. Any significant change in the business organization should need to be approved by the Trustee, the bankruptcy court, or both.

Under a pure liquidation bankruptcy filing, the company stops operations and goes completely dark. The Trustee is assigned to sell the firm’s possessions and the money is used to pay for the bankruptcy administration and to make a distribution to creditors. The priority of payouts is governed by the BIA.

Trust claimants and secured creditors are paid first. For instance, secured creditors take less risk due to the fact that the money that they lend is backed by the firm’s assets. If the lender is concerned that the assets may not at any time be enough to fully cover the loan, it will also require additional backup by way of the personal guarantee of the entrepreneur. That personal guarantee can be either an unsecured promise or additional collateral by the entrepreneur pledging personal assets. They do this to limit their risk of loss if the company declares bankruptcy.

Bondholders have a better potential for recovery than shareholders because bonds are a financial debt of the business. The company promises to pay interest on the money it takes in through the sale of bonds. The company also promises to repay the principal according to the terms of the bond issuance.

Shareholders own the company and also take a higher risk. They might make more if the company does well, yet they could lose money if the company is not successful. The shareholders are last in line to be repaid if the company stops working. Bankruptcy laws establish the order of payment.

**If I declare bankruptcy, what happens with the CRA garnishee?**

If you declare bankruptcy or file a consumer proposal, personal income tax debt is one type of debt in the category of ordinary unsecured debts. When you’ve filed for bankruptcy or a consumer proposal, CRA can’t take any kind of further collection activity against you. This includes wage garnishment or freezing your bank account. Your Trustee will certainly alert CRA once you declare bankruptcy. The Trustee will also advise CRA to quit any type of collection activity against you.

**What is it like to declare bankruptcy summary?**

To declare personal bankruptcy is a major life event. However, it is a necessary thing to rid yourself of crippling debt. Most people who declare bankruptcy have been faced with a major life event. The main examples are illness, pay cuts, job loss, or divorce. It is not your fault. I hope this Brandon’s Blog has given you helpful information.

You are worried because you are facing significant financial challenges.
It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom from one of the alternatives to bankruptcy.

We know that people facing financial problems need realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.
Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

Tags assignment in bankruptcy, Bankruptcy, bankruptcy and insolvency act canada, bankruptcy liquidation, bankruptcy restructuring, Canada Revenue Agency, Consumer Proposal, debt settlement, declare bankruptcy, declaring bankruptcy, filing for bankruptcy, how do i declare bankruptcy, Ira Smith Trustee, licensed insolvency trustee, personal bankruptcy, trustee, what is it like to declare bankruptcy, when is bankruptcy a good idea, when to declare bankruptcy

Brandon Blog Post

CONSUMER PROPOSAL VS BANKRUPTCY ONTARIO: THE BEST INFO YOU REALLY NEED

Post author By Brandon Smith
Post date September 16, 2020

Consumer proposal vs bankruptcy Ontario introduction

What is the difference between a consumer proposal vs bankruptcy Ontario is a question people calling me up these days are asking. No doubt the looming end of the various COVID-19 government support programs is now sparking this interest. People and businesses were given a reprieve with Canada’s COVID-19 Economic Response Plan and the courts being closed. Now fear is creeping back into everyone’s minds about their debts that essentially were put on hold for the last 6 months.

So, since people are asking me the question, I want to answer the consumer proposal vs bankruptcy Ontario question in this Brandon’s Blog.

Consumer proposal vs bankruptcy Ontario: Who qualifies for and what is a consumer proposal?

A consumer proposal is different from bankruptcy. Consumer proposals are available to individuals only whose overall financial obligations do not exceed $250,000, not including debts secured by their principal residence.

Division 1 proposals are offered to both companies with any debt level and people whose debts go beyond $250,000 (omitting the mortgage or any other debts secured by their primary residence).

Consumer proposals are official methods regulated by the Bankruptcy and Insolvency Act (Canada) (BIA) readily available to individuals. Collaborating with a licensed insolvency trustee (Trustee) serving as the consumer proposal administrator, you make a proposal to:

Pay your creditors a percentage of what you owe them over a certain period not exceeding 60 months.
Expand the time you need to settle those debts.
Or a mix of both.

Payments are made via the Trustee, and the Trustee utilizes that cash to pay each of your creditors their pro-rata share. The consumer proposal must be completed within 5 years from the day of filing.

Consumer proposal vs bankruptcy Ontario: Who qualifies for bankruptcy?

You can declare bankruptcy if you:

Live in Canada.
Continue business or have assets in Canada.
Have financial debts totalling a minimum of $1,000.
Are insolvent.

There are different tests for insolvency laid out in the BIA. They are:

for any reason, you are unable to pay your financial debts as they generally come to be due;
you have ceased paying present debts in the regular course as they usually are due; or
the complete worth of your property is not, at a reasonable valuation, enough, or, if sold at a sale under legal process, would not be sufficient to make it possible for repayment of all your financial obligations.

Consumer proposal vs bankruptcy Ontario: What is bankruptcy?

A consumer proposal is an excellent option for you if you can afford to make payments towards your financial debts monthly. If you are entirely unable to make enough payments for a consumer proposal, then bankruptcy is probably your only other alternative.

By statute, the offer you make your creditors via a consumer proposal must be a much better option than what your creditors would certainly get in your bankruptcy. I help people make that analysis during our initial no-cost consultation prior to them selecting the ideal insolvency process for them. We discover the choices readily available, including a consumer proposal vs bankruptcy Ontario. Bankruptcy is an alternative when you cannot afford to fund a consumer proposal to your creditors.

If bankruptcy is the selected alternative, you work with me, as the Trustee, to complete the needed documents. I then submit them with the Office of the Superintendent of Bankruptcy Canada (OSB). When the OSB issues its Certificate, after that you are formally bankrupt.

From that point on, the Trustee will deal directly with your creditors in your place. As soon as you are bankrupt:

you will stop making payments to your unsecured creditors;
any type of garnishments against your wages or bank account will stop; and
any lawsuits for money against you from your creditors will also be stopped.

Consumer proposal vs bankruptcy Ontario: What are the advantages of a consumer proposal?

The benefits of a consumer proposal vs. bankruptcy Ontario are:

You maintain all of your assets.
Actions against you by creditors, such as wage garnishments will quit.
Unlike informal financial debt settlement, the consumer proposal is a legal forum where every one of your creditors has to deal with your restructuring.
You do not have to think any more about the “B” word.

Consumer proposal vs bankruptcy Ontario: What are the differences in credit score?

The person that files for bankruptcy will absolutely get an R9 rating. This is the lowest credit rating possible. It will continue to be on their record for at least 7 years. An individual that submits a consumer proposal will have an R7 credit score which is less extreme. It will certainly remain to be on their record for around 8 years overall, from the moment of filing.

You will absolutely pay less than the total you owe with a consumer proposal. Commonly as much as 70% less. All your unsecured financial obligations will be combined right into a simple regular month-to-month payment. This number will be based upon what you can afford.

Consumer proposal vs bankruptcy Ontario: What are the costs and fees of a consumer proposal versus filing for bankruptcy?

When doing a consumer proposal, the Trustee’s charges are paid for out of the repayment you bargain with your creditors. For example, if your consumer proposal has you paying a total amount of $20,000 over 5 years, the Trustee’s fee and disbursements are drawn from those funds. The cost of the consumer proposal is likewise regulated by the BIA. The expense does not go up or down based upon the amount you are required to pay in your consumer proposal.

However, if you were to file for bankruptcy, the cost is once again controlled by the BIA. The Trustee is paid out of the funds available in your bankruptcy. Examples of sources of funds in personal bankruptcy are any surplus income you might need to pay as well as any assets that are available to the Trustee to sell.

If there are not expected to be any type of funds in your bankruptcy, the regulated cost to be funded either by the debtor or a third party guarantor will be around $2,000. This is one more difference between a consumer proposal vs bankruptcy Ontario.

Consumer proposal vs bankruptcy Ontario: Are assets treated differently between a consumer proposal vs bankruptcy?

If you do a consumer proposal, you can keep your assets whereas in bankruptcy your assets in most cases are affected. This includes the equity in your home if greater than $10,000, an auto or other vehicle worth greater than $6,600 (without liens against it), investments, tax refunds, as well as any RRSP contributions made in the 12 months immediately before filing for bankruptcy.

This distinction between a consumer proposal vs bankruptcy Ontario is huge.

Consumer proposal vs bankruptcy Ontario: What if I default on my consumer proposal vs bankruptcy payments?

If you do not keep up your payments on a consumer proposal, and drop 3 months behind, you have defaulted and the consumer proposal is void. You additionally are unable to submit a brand-new consumer proposal. Collection activity by your creditors will begin again.

In bankruptcy, if you do not complete all your obligations, you will not have the ability to get your discharge from bankruptcy. As soon as the Trustee gets its discharge, your creditors will certainly return to collection activities too.

This is one more consumer proposal vs bankruptcy Ontario difference.

consumer proposal vs bankruptcy Ontario

Consumer proposal vs bankruptcy Ontario: When is a meeting of creditors held in a consumer proposal?

A meeting of creditors in a consumer proposal is held if one is requested by creditors that are owed at least one-quarter of the total amount of proven claims filed.

An ask for a meeting needs to be made by the creditors within 45 days of the declaring of the consumer proposal. The OSB can additionally ask for the Trustee to call a meeting any time within that same duration.

The meeting of creditors must be held within 21 days after being called. At the meeting of creditors, they vote to either accept or reject the proposal.

If no meeting of creditors is requested within 45 days of the declaring of the proposal, the proposal will be considered to have been approved by the creditors no matter any kind of objections made later.

**How long does it take to complete a consumer proposal vs bankruptcy Ontario?**

A consumer proposal is ended when the individual has made the call for payments over the amount of time stated in the proposal itself. In a bankruptcy, the discharge relies on a selection of different aspects, including whether it was the very first time the debtor filed for bankruptcy and if they need to make surplus income payments.

If the borrower has never proclaimed bankruptcy and they do not need to make surplus income payments, then they are entitled to be discharged 9 months. However, if the bankrupt has surplus income, then a first-time bankrupt will need to pay for 21 months before when they can be discharged

If this is not the person’s first bankruptcy, and they do not have surplus income, they cannot get a discharge before the expiry of 24 months. If that person has a surplus income requirement, then they must pay for 36 months before being able to be discharged.

This is another distinction between a consumer proposal vs bankruptcy Ontario.

Consumer proposal vs bankruptcy Ontario: What do consumer proposals and bankruptcy have in common?

Both a consumer proposal and bankruptcy are lawfully binding treatments that are administered by a Trustee. If you are thinking of a consumer proposal vs bankruptcy Ontario, it is vital that you consult with a Trustee to ensure that you completely understand what’s involved, and the costs. You can talk with friends or family that might have applied for one or the other before. It is also important that you get referrals from professionals you trust.

Declaring bankruptcy or doing a consumer proposal are both issues of public record. That means there will be a permanent public record concerning your insolvency that can be accessed by anyone. If your debts are joint or co-signed or guaranteed by someone else, the other person is liable for the debt. That is the case even if you file for either a consumer proposal or personal bankruptcy.

Even these similarities still point out differences between a consumer proposal vs bankruptcy Ontario.

How do I choose between a consumer proposal vs bankruptcy Ontario?

As you can see, when you consider a consumer proposal vs bankruptcy Ontario, there are most definitely differences between the two. But they are both formal insolvency processes to eliminate your debt. What’s essential, though, is that you discover the best method to get yourself back on the right track in such a way that will assist you to achieve your long-term goals.

Consumer proposal vs bankruptcy Ontario: How to file for bankruptcy?

In order to take advantage of either a consumer proposal vs bankruptcy Ontario, you must involve a Trustee. This is a person or company licensed by the OSB to provide the insolvency process. The 10 actions listed below are a guide to the bankruptcy procedure.

Call a qualified Trustee and go to a meeting with him or her to talk about your personal circumstance and your alternatives including if it is possible for you to prevent bankruptcy.
Deal with the Trustee to complete the needed forms. The Trustee will after that submit the bankruptcy with the OSB.
The Trustee notifies your creditors of the bankruptcy.
You participate in a meeting of creditors if one is called.
You participate in 2 counselling sessions.
Based on your personal exemptions, the Trustee markets your available assets; you may additionally need to make surplus income payments to the Trustee.
In certain circumstances, you might need to participate in an examination held by an OSB representative.
The Trustee prepares a report describing your actions throughout the bankruptcy.
You go to the discharge hearing if needed.
You obtain your discharge from your bankruptcy.

Afterward, the Trustee completes the administration, including paying a dividend to your creditors, if offered.

Consumer proposals and bankruptcy Ontario aren’t the only ways of obtaining debt relief and consolidating debt

There are additionally other ways of fixing debt problems that do not include a formal process or paying a fee. If you honestly wish to thoroughly and objectively take a look at all your options, contact a Trustee, and meet with him or her. They’ll pay attention to your scenario and concerns and advise you on what will work best for you even if you do not need to file for either a consumer proposal vs bankruptcy Ontario. Their assistance is normally cost-free and non-judgmental.

At my Firm, declaring bankruptcy is only encouraged until all other potential solutions have investigated. A consumer proposal is the only government-approved financial debt settlement strategy and is always the far better bankruptcy alternative.

Consumer proposal vs bankruptcy Ontario: Move on with your life

I hope you have enjoyed this consumer proposal vs bankruptcy Ontario Brandon’s Blog. Both a successfully completed consumer proposal or obtaining your discharge from bankruptcy lets you get back on the road to financial health, relieve the stress you face, and bring you:

Freedom from lawsuits and garnishments;
The ability to live better than just hanging on one payday to the next;
Improved credit scores; and
Better health and well-being.

You are worried because you are facing significant financial challenges.
It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.
Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

consumer proposal vs bankruptcy ontario — consumer proposal vs bankruptcy Ontario

Tags alternatives to bankruptcy, Bankruptcy, bankruptcy alternative, bankruptcy and insolvency act canada, BIA, Consumer Proposal, consumer proposal vs bankruptcy, consumer proposal vs bankruptcy ontario, consumer proposals, Division I Proposal, insolvent, Ira Smith Trustee, licensed insolvency trustee, Office of the Superintendent of Bankruptcy Canada, OSB, trustee

Brandon Blog Post

WHAT IS A LICENSED INSOLVENCY TRUSTEE? READ OUR BEST AND COMPLETE 12 STEP CHECKLIST

Post author By Brandon Smith
Post date September 14, 2020

If you would prefer to listen to the audio version of this what is a Licensed Insolvency Trustee Brandon’s Blog, please scroll to the very bottom and click on the podcast.

What is a Licensed Insolvency Trustee introduction

What is a Licensed Insolvency Trustee is a question I see asked regularly. Is it the same as a bankruptcy trustee? The answer is yes. A bankruptcy trustee is an old name. Licensed Insolvency Trustee is the new name. The Office of the Superintendent of Bankruptcy (OSB) changed the name in 2015. The change came about partly because of submissions made by the Canadian Association of Insolvency and Restructuring Professionals (CAIRP).

The change came about since the new name more precisely explains the breadth of solutions they offer to consumers and businesses. The purpose of this Brandon’s Blog is to describe for the stressed-out person who is facing financial challenges, or the entrepreneur whose business is in financial trouble, what is a Licensed Insolvency Trustee all about and give a 12 point checklist to help you find the best one for you.

What is a Licensed Insolvency Trustee?

A Licensed Insolvency Trustee is a financial and debt specialist licensed and supervised by the OSB. The OSB released a directive calling for trustees to utilize the classification of Licensed Insolvency Trustee to more precisely show the solutions they offer.

**What is the difference between a Licensed Insolvency Trustee, a credit counsellor, and a debt settlement business?**

Licensed Insolvency Trustees, credit counsellors, and financial debt settlement companies, all provide financial guidance. However, they are extremely different.

A Licensed Insolvency Trustee is the only person who can file a bankruptcy or consumer proposal for you. A trustee can also offer you financial advice and help you plan on how to repay your debt. Credit counsellors and debt settlement businesses can give you financial advice and information. They can help you make a budget and make plans to repay your debt. But they can’t file a bankruptcy or consumer proposal for you.

Unlike the others, a Licensed Insolvency Trustee is an Officer of the Court, and as such, is the only financial debt relief professional in Canada legally allowed to administer insolvency proceedings under the Bankruptcy and Insolvency Act (Canada) (BIA).

What is a Licensed Insolvency Trustee and what can they do for me?

A Licensed Insolvency Trustee will first gather info to comprehend the individual’s or business’s entire circumstance, examine the effects of different choices, discuss them with you and also suggest the one he or she really feels is ideal for you. When filing a restructuring debt settlement proposal or for bankruptcy, Licensed Insolvency Trustees will direct the debtor through the whole procedure, will certainly prepare and submit the needed paperwork, and be the one to deal directly with all of your creditors.

So what is a Licensed Insolvency Trustee? It is the only expert that can offer you a complimentary consultation and advice as well as recommendations. After that, she or he will either direct you what to do if you do not need an insolvency process to repair your financial concerns or administer the insolvency procedure if one is required.

What is a Licensed Insolvency Trustee and what sets them apart?

By now you should realize that a Licensed Insolvency Trustee is licensed and supervised by the OSB. No other professional dealing with consumer or business debt issues is. Licensed Insolvency Trustees also have to go through a rigorous course of study and examinations in order to obtain that license.

So what is a Licensed Insolvency Trustee? It is someone who:

successfully complete the Chartered Insolvency and Restructuring Professional (CIRP) Qualification Program (CQP), the CIRP National Insolvency Exam and the Insolvency Counsellor’s Qualification Course;
passed an Oral Board of Examination;
has been found to be a person of good character and reputation; and
has been cleared through an RCMP investigation.

What is a Licensed Insolvency Trustee and how are their fees calculated?

There are set calculations and rules that all Licensed Insolvency Trustees must strictly follow when administering a bankruptcy or proposal. Trustee fees are calculated and drawn from the funds that have been paid into each individual proceeding. Licensed Insolvency Trustees are not allowed to simply set their own fees and rates.

In most bankruptcies and proposals, the Licensed Insolvency Trustee’s fees are based on a tariff set by the BIA. Unlike other professionals, working with a Licensed Insolvency Trustee is not a “fee for service” – this means that a phone call to discuss any questions you have or get ongoing support throughout the process won’t result in an invoice.

What is a Licensed Insolvency Trustee and how do I find one?

The best way to find one is through a referral from someone that you trust. This could be your lawyer, accountant, a relative or a close friend. Someone you trust, who refers you to someone they trust, is always the best. I take pride that my Firm has many times helped relatives of lawyers and accountants who we work with. If they are willing to refer a family member to us, that is the highest compliment anyone can pay to me as a professional.

You can also contact a local non-profit credit counselling service. There are two benefits to doing this. A local non-profit credit counselling organization is probably one of the most objective places to find out about all your debt relief options. They’re not trying to sell you anything, and they’re not paid on commission. So they can actually help you look at all your options and see if insolvency (a consumer proposal or bankruptcy) is your best option or if there is something else that might make sense.

The OSB maintains a searchable database of all Licensed Insolvency Trustees in Canada. You can search for a trustee located near you. Finding a trustee near you may be convenient, but, it will not give you a sense of whether you feel you can work with that professional.

You can also search for “licensed insolvency trustee” or “bankruptcy trustee” in your favourite search engine. Just be mindful that the companies who appear at the top of your search results with the word “Ad” next to their name have paid for that listing. It has nothing to do with their expertise or rating.

Looking at the online reviews given by people who have worked with them is a great way to start to get a feel for each professional. If they write blogs or have videos posted online, that will also help to get a feel for the personality of the Licensed Insolvency Trustee.

What is a Licensed Insolvency Trustee and have they been recognized by any rating agencies?

I am pleased to report that, for the 5th year in a row, Ira Smith Trustee & Receiver Inc. has been voted as one of the Top 3 Licensed Insolvency Trustees in Vaughan, ON. (Yes, there are more than 3!). It is gratifying to get recognition fo the professional services we provide and our commitment to full service and support for our clients.

So what is a Licensed Insolvency Trustee and how should I go about choosing one? There are many factors that you must consider. Below is our 12 step checklist to make the best choice for you.

What is a Licensed Insolvency Trustee? Our 12 step checklist to help you find the best one for your situation

Do they have the necessary qualifications?
How many cases like yours have they done before?
Do they go to Court also or do you have to hire a lawyer to do so?
Is bankruptcy right for you and is it your only option?
How much will it cost you?
Will you be dealing with the actual licensee ultimately responsible to the OSB for your file?
Will you only be seeing one of many clerks once you enter the insolvency process?
How did you feel after meeting the people at their office after your initial consultation?
Do they practice exclusively in the bankruptcy/insolvency area?
Do they have experience in only personal insolvency matters, only corporate insolvency matters, or both?
Do they have enough experience and the time to handle your matter?
Will they communicate in a timely manner with you throughout?

As you can see, when trying to answer what is a Licensed Insolvency Trustee and who is the right one for me question, there are many things to consider.

What is a Licensed Insolvency Trustee summary

I hope you found this what is a Licensed Insolvency Trustee Brandon’s Blog about helpful. Sometimes things are too far gone and more drastic and immediate triage action is required.

Do you have too much debt? Are you in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt. You are worried because you are facing significant financial challenges.
It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

Tags Bankruptcy, bankruptcy and insolvency act canada, bankruptcy trustee, BIA, Consumer Proposal, credit counsellor, debt restructuring, debt restructuring proposal, debt settlement, debt settlement company, Ira Smith Trustee, licensed insolvency trustee, licensed insolvency trustees, Office of the Superintendent of Bankruptcy, OSB, what is a licensed insolvency trustee

Brandon Blog Post

WHEN ARE 2019 TAXES DUE CANADA: 4 AMAZING WAYS TO CRA PERSONAL DEBT RELIEF

Post author By Brandon Smith
Post date August 26, 2020

The Ira Smith Trustee Team Is Absolutely Operational And Ira, In Addition To Brandon Smith, Is Readily Available For A Telephone Consultation Or Video Meeting.

When are 2019 taxes due Canada introduction

I have noticed recently that Canadians are searching online the question “when are 2019 taxes due Canada“. That leads me to believe that many people are unclear about the changes this year. Some people are searching because they don’t want to miss the payment deadline. Others may be searching because they want to know when the deadline is that they are going to miss because of the COVID-19 pandemic has hit them right in the wallet or purse.

The purpose of this Brandon’s Blog is to go over for individuals:

the important tax filing and payment dates for 2019 taxes;
what needs to happen on those dates and what if you can’t make it on time; and
ways you can deal with Canada Revenue Agency (CRA) to eliminate your tax debt

I remind you that I and my Firm are not personal or corporate tax advisors. We are licensed insolvency trustees. This Brandon’s Blog is not meant to be income tax advice or to replace professional income tax advice. To learn when are 2019 taxes due Canada for your personal situation, contact your own professional income tax advisor.

Is the Tax Deadline Delayed for 2019 Tax Returns?

You may have wondered how COVID-19 influences the filing of your 2019 tax return, repayment of any income tax owing and your tax obligations generally in terms of deadlines, or payments or refunds and tax credits. Apart from those that are self-employed, the income tax return filing date is usually April 30 of every year.

Identifying the turmoil brought on by COVID-19, the CRA provided most Canadians extra time to submit a 2019 tax return. CRA provided us till June 1, 2020, aside from self-employed people operating as a proprietorship or partnership. For those self-employed people, the filing day remained June 15, 2020, for a 2019 tax return.

So since that due date has passed, nevertheless, this year there might be a technicality as I describe below. The government wants every cent they are owed and they want it in a good time. Thus, there are fines for filing a late income tax return if you have an unpaid tax amount. If you are entitled to a refund or your tax balance is nil, there will be no charges for sending in your return after the deadline date.

Charges for filing your income tax return late when you owe the CRA are levied. The CRA will charge you a late-filing penalty if you file your 2019 income tax return after September 30, 2020 (notwithstanding the actual filing date was June 1), and you owe tax obligation that continues to be unpaid. The fine is 5% of your 2019 tax owing, plus 1% of your income tax owing for each complete month your return was filed after September 30, 2020, to a maximum of twelve months.

So without making you any guarantees, there is a real possibility that if you missed out on the June 1 due date, if you submit and pay on or prior to September 30, 2020, and you do not have any kind of prior years’ late-filing penalty, one may not be levied for 2019.

If the CRA charged a late-filing penalty on your return for 2016, 2017, or 2018 your late-filing fine for 2019 may be 10% of your 2019 balance owing, plus 2% of your 2019 balance owing for each and every complete month your return was submitted after September 30, 2020, to a maximum of 20 months.

So it seems the CRA will forgo arrears interest on 2019 tax obligations related to the specific income tax returns from April 1, 2020, to September 30, 2020. This procedure for your 2019 tax obligation does not terminate penalties and interest on a taxpayer’s account prior to April 1, 2020, to September 30, 2020. It does make it less complicated on a taxpayer’s 2019 tax debt that it will certainly not rise via interest charges throughout this challenging coronavirus pandemic time.

Why file by the June 1 deadline if no payment is due until September 30?

Filing your income tax return on time lessen any negative results on your tax credits and benefits payments. If your 2019 return has actually not been assessed by the CRA, details from your 2018 return will be used to compute benefits as well as credits payments up until September 2020. That will guarantee you continue to obtain vital payments. Nevertheless, without filing your 2019 tax return, you may not be getting exactly the correct amounts you are entitled to.

I doubt you desire any kind of disturbance to benefit payments you get for government programs such as the Canada Child Benefit (CCB) and GST/HST tax credits, as well as amounts from provincial programs that are carried out by the CRA.

By filing a return by the due date, you will lessen this impact. Also, if you are owed a refund, the earlier you file, the earlier it will show up in your pocket. By registering for direct payment, you’ll get your refund quicker.

If you are expecting a tax refund for sure you would certainly want to submit on time. CRA may not chase you for it if you don’t owe them for 2019. Submitting your tax return is the only way to get that refund. Remember, a refund means that you gave too much of your money to CRA during the year. For sure you want it back!

However, registering for a direct deposit could lead to other problems. For more information on that, read my Brandon’s Blog CANADA REVENUE AGENCY LOGIN: MASSIVE CREDENTIAL STUFFING CAUSES MANY PROBLEMS.

When are 2019 taxes due Canada: Are there new deadlines for GST/HST returns and payments as well?

Excellent information for the self-employed as well as entrepreneur small-business owners: while the CRA is not changing the filing target dates for GST/HST returns, it is forgoing late filing charges for returns submitted by the end of June. As for payments, any type of GST/HST installments that are due March 27 through June 2020 can be deferred up until June 30, interest-free.

When are 2019 taxes due Canada: What is the payment date?

The target date to pay amounts owed was initially extended to September 1, 2020. On July 27, the CRA revealed that the payment deadline for a person’s 2019 income tax obligation was additionally extended to September 30, 2020.

There are a few other concerns surrounding the declaring of your 2019 income tax return and the payment of any balance owing that you must understand:

Some taxpayers may have received a Notification of Assessment that says the date for settlement is April 30, 2020, or September 1, 2020. If you did get such a notice giving those dates for when are 2019 taxes due Canada, it is now incorrect.
On May 15, it was revealed that qualified Canadians who are currently obtaining the GST/HST credit and/or CCB payments will continue to get them up until the end of September 2020. Benefits starting in July 2020 and those arranged for August and September won’t be disrupted.
If CRA is unable to evaluate your 2019 return by early September 2020, your estimated benefits and/or credits will certainly stop in October 2020 and you’ll have to repay the approximated amounts that were released to you starting in July 2020.
By prolonging the due dates for federal returns and instalments, the CRA is additionally expanding the due dates for provincial/territorial individual returns and instalments. Note that the CRA does not administer the tax system for the province of Quebec.

When are 2019 taxes due Canada: What if I owe CRA and cannot pay it?

If you find yourself to be in a financially challenging situation then you need to take proactive activity. The COVID-19 pandemic has hit Canadians hard. I envision there will be many individuals that do not have the needed cash to pay their 2019 income tax debt by September 30. It is necessary to be proactive and positive since the CRA has special powers.

The CRA does have the capacity to take collection procedures without having to go via the court system. The federal government can garnishee your wages or salary, get the money you have on deposit at a bank as well as freeze your bank accounts. They can also make demand on anyone they think owes you money.

There are 4 ways to CRA personal debt relief:

If you are able to, borrow the money you owe and pay it to CRA on or before September 30. I don’t think this option needs any further explanation.
Contact a CRA collection officer and make a payment arrangement repayment plan. A payment arrangement is an agreement you make with the CRA. This allows you to agree on a monthly amount to pay that you can afford and then provide CRA with a series of post-dated cheques.
Consider filing a consumer proposal to consolidate your income tax and other debts so you can make one manageable monthly payment. Through a consumer proposal, you will pay much less than the total of all your debts.
If you cannot see your way to being able to do any of the three options listed above, the final one is to use personal bankruptcy to eliminate your income tax and other debts.

If you are able to make a settlement arrangement you have to maintain the payment plan by making certain your regular monthly post-dated cheques clear the financial institution every single time. Also, ensure that all your returns are filed promptly. If you fail to do any of these things, they can terminate the payment arrangement and begin collection action to recoup the tax debt.

September 30, the date when are 2019 taxes due Canada is coming up fast. If you know that you will not be able to pay that liability, don’t fret and don’t waste time. Give us a call. We will help you put together the best strategy that meets your overall needs.

When are 2019 taxes due Canada: A consumer proposal

A consumer proposal is a government-regulated debt negotiation program submitted with a Licensed Insolvency Trustee (Trustee). The purpose of submitting one is to eliminate problem financial debts to make sure that you can start the process of resuming life debt-free.

It can just be filed with a Trustee. When you sign your papers, they are filed with the federal government. It is a legal process under the Bankruptcy and Insolvency (Canada) (BIA).

This procedure is a lawful arrangement between you and you’re unsecured creditors to eliminate all of your debt by repaying only a part of the debt that you owe. If a simple majority by dollar amount accept the terms you have offered, then your consumer proposal is binding on all your unsecured creditors.

This court-sanctioned procedure enables you to bargain negotiation with your creditors. When you are carrying out your consumer proposal by making your required payments, you must also file your income tax returns as normal. CRA manages your refunds in the normal course. If you owe tax for any time period after the filing date of your consumer proposal, you additionally pay that amount as regular.

In a consumer proposal, you maintain your assets and as long as you make all the required payments you promised to make, nobody can garnishee your salary or earnings. If you have filed a consumer proposal, personal income tax obligations arising before your filing is an unsecured debt. When you have filed CRA can’t take any type of additional action against you, like wage garnishment, or freezing your bank accounts. As the Trustee, we alert CRA once you file as well as advise it to stop any additional action against you.

For further information on how a consumer proposal could work for you, please get in touch with me. If you know that when are 2019 taxes due Canada you will not be able to pay them, give us a shout so we can help put together a plan of attack for you.

***When are 2019 taxes due Canada: Personal bankruptcy in Canada***

If none of the above ways can work for you, then you will have to consider personal bankruptcy in Canada. Personal bankruptcy should be considered by anyone who:

is insolvent;
has seen a Trustee who has assessed you and determined that you will not be able to complete a consumer proposal; and
owes more than $1,000.

As soon as you become bankrupt you will be required to surrender most assets to the Trustee, other than those that are exempt under provincial law or are fully encumbered. These assets will then be sold and the money gained from the sale of the properties will be dispersed according to the BIA. You may additionally have to pay a part of your earnings to the Trustee for the benefit of your creditors.

Personal tax obligations can be discharged when you receive your discharge from personal bankruptcy. Many various other financial debts will also be released. If you have liability to CRA from being a director of a company, those financial obligations can also be discharged.

If you have actually declared personal bankruptcy, personal income tax debt is an ordinary unsecured financial debt. As soon as you’ve applied for bankruptcy CRA can’t take any kind of additional action versus you, consisting of a wage garnishment or freezing your accounts. We will inform CRA when you file as well as instruct it to quit any additional activity against you to try to collect their debt.

Your spouse will not be affected by your bankruptcy unless your spouse:

co-signed a debt;
owns assets with you jointly; or
has received a transfer of property from you at a time when you owed CRA money.

A creditor can go after your spouse for payment in these circumstances and also he/she will be called to account and pay.

You may also wish to check out our Top 20 personal bankruptcy FAQs. So if you know now that when are 2019 taxes due Canada you will not be able to pay it, consider giving us a call and we can run through your various options and tailor a plan to fit your unique circumstances.

***When are 2019 taxes due Canada: Summary***

I hope you found this is Canada when are 2019 taxes due Canada Brandon’s Blog informative. The Ira Smith Team family hopes that you and your family members are remaining secure, healthy, and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Income, revenue, and cash flow shortages are critical issues facing entrepreneurs, their companies, and individual Canadians. This is especially true these days.

If anyone needs our assistance for debt relief Canada COVID-19, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Tags 2019 tax return, Are there new deadlines for GST/HST returns and payments as well, Bankruptcy, Canada Child Benefit (CCB), Canada Revenue Agency, Consumer Proposal, coronavirus, covid-19, CRA, GST/HST tax credits, Ira Smith Trustee, is the tax deadline delayed for 2019 income tax returns, licensed insolvency trustee, pandemic, Revenue Canada, self employed, tax filing, when are 2019 taxes due canada, Why file by the June 1 deadline if no payment is due until September 30

Receivership meaning introduction

Receivership meaning: What’s the meaning of “receivership” in simple words

Receivership meaning: What does it mean when a receiver is appointed?

Receivership meaning: How is a receiver appointed?

Receivership meaning: What happens when the receiver is called in?

Receivership meaning: Under receivership meaning

Receivership meaning: What does a receiver do in business

Receivership meaning: What is the difference between receivership, liquidation, and insolvency?

Receivership meaning: How do receivers get paid

Receivership meaning summary

Bankruptcy meaning introduction

Bankruptcy meaning: The stakeholders

Bankruptcy meaning: Duties of the Trustee

Bankruptcy meaning: Duties of creditors

Bankruptcy meaning: Advising the bankrupt or the officer of the bankrupt corporation of duties

Bankruptcy meaning: The duties of the bankrupt or the officer of the bankrupt corporation

Bankruptcy meaning: Why a bankrupt’s discharge hearing may come to court

Bankruptcy meaning: The Nova Scotia case

Bankruptcy meaning: The Registrar’s decision

Bankruptcy meaning summary

Licensed Insolvency Trustees, licensed by the Canadian Government

About Bankruptcy Trustees: what is a licensed insolvency trustee?

As licensed insolvency trustees, we’re here to help: How do I become an insolvency trustee?

Trustees in Bankruptcy near you: How to find a bankruptcy trustee in Canada

The fee of a bankruptcy trustee in a summary administration bankruptcy – The Bankruptcy & Insolvency Act

The fees of the bankruptcy trustee in an ordinary bankruptcy

The consumer proposal fee for a bankruptcy trustee acting as administrator of a consumer proposal – The Bankruptcy & Insolvency Act

The fee of the bankruptcy trustee for the administration of a Division I proposal

Only a bankruptcy trustee can act as a receiver

Bankruptcy trustee summary

Insolvency and bankruptcy act introduction

The definition of the word deprive and the insolvency and bankruptcy act context

The anti-deprivation rule in the Canadian insolvency and bankruptcy act matters

The Bramalea case and its relevance of insolvency and bankruptcy act matters

The Bramalea insolvency and bankruptcy act decision

The Chandos Alberta court case and the anti-deprivation rule for insolvency and bankruptcy act matters

The Trustee’s application to the Alberta Court of Queen’s Bench

Trustee appeals the Chandos insolvency and bankruptcy act decision to the Court of Appeal for Alberta

Chandos appeals to the SCC in this insolvency and bankruptcy act anti-deprivation rule case

Insolvency and bankruptcy act summary

Bankruptcy surplus income introduction

What is bankruptcy surplus income?

What happens to a person’s wages during bankruptcy?

Superintendent’s Standards – 2020

Bankruptcy surplus income limits for 2020 Canada

Bankruptcy surplus income calculator

When do bankruptcy surplus income payments end?

Can I file bankruptcy if I make too much money?

Bankruptcy surplus income summary – Are you in financial trouble?

Bankruptcy discharge certificate Canada introduction

Who can issue a bankruptcy discharge certificate Canada?

Bankruptcy discharge certificate Canada: How long will I be bankrupt?

Bankruptcy discharge certificate Canada: Who tells my creditors that I am discharged from bankruptcy

Bankruptcy discharge certificate Canada: What debts are not forgiven and will survive my bankruptcy?

Bankruptcy discharge certificate Canada: What if my creditors still contact me and try to get me to pay them?

Bankruptcy discharge certificate Canada: What does trustee discharge mean?

Bankruptcy discharge certificate Canada: what if I fail to include one of my creditors in my bankruptcy?

Bankruptcy discharge certificate Canada: What are the benefits of keeping my bankruptcy discharge papers?

Bankruptcy discharge certificate Canada: How long does my credit score take to recover from bankruptcy?

Bankruptcy discharge certificate Canada: 2 simple steps to improve your credit score after your discharge from bankruptcy

Bankruptcy discharge certificate Canada summary

What is it like to declare bankruptcy?

When to declare bankruptcy

What are the consequences for a person to declare bankruptcy?

How do I declare bankruptcy?

What should I do before I declare bankruptcy?

When is bankruptcy a good idea? The answer depends on your situation

Is filing bankruptcy bad? Can it be good?

If I declare bankruptcy, what happens with the CRA garnishee?

What is it like to declare bankruptcy summary?

Consumer proposal vs bankruptcy Ontario introduction

Consumer proposal vs bankruptcy Ontario: Who qualifies for and what is a consumer proposal?

Consumer proposal vs bankruptcy Ontario: Who qualifies for bankruptcy?

Consumer proposal vs bankruptcy Ontario: What is bankruptcy?

Consumer proposal vs bankruptcy Ontario: What are the advantages of a consumer proposal?

Consumer proposal vs bankruptcy Ontario: What if I default on my consumer proposal vs bankruptcy payments?

Consumer proposal vs bankruptcy Ontario: When is a meeting of creditors held in a consumer proposal?

How long does it take to complete a consumer proposal vs bankruptcy Ontario?

Consumer proposal vs bankruptcy Ontario: What do consumer proposals and bankruptcy have in common?

How do I choose between a consumer proposal vs bankruptcy Ontario?

***Trustees in Bankruptcy near you: How to find a bankruptcy trustee* in Canada**

**The definition of the word deprive and the insolvency and bankruptcy act context**

**The anti-deprivation rule in the Canadian insolvency and bankruptcy act matters**

**The Bramalea case and its relevance of insolvency and bankruptcy act matters**

**The Bramalea insolvency and bankruptcy act decision**

**The Chandos Alberta court case and the anti-deprivation rule for insolvency and bankruptcy act matters**

**Trustee appeals the Chandos insolvency and bankruptcy act decision to the Court of Appeal for Alberta**

**Chandos appeals to the SCC in this insolvency and bankruptcy act anti-deprivation rule case**

**What is bankruptcy surplus income?**

**When do bankruptcy surplus income payments end?**

**Who can issue a bankruptcy discharge certificate Canada?**

**What are the consequences for a person to declare bankruptcy?**

**How do I declare bankruptcy?**

**What should I do before I declare bankruptcy?**

**Is filing bankruptcy bad? Can it be good?**

**If I declare bankruptcy, what happens with the CRA garnishee?**

**What is it like to declare bankruptcy summary?**

**How long does it take to complete a consumer proposal vs bankruptcy Ontario?**

**What is the difference between a Licensed Insolvency Trustee, a credit counsellor, and a debt settlement business?**

***When are 2019 taxes due Canada: Personal bankruptcy in Canada***

***When are 2019 taxes due Canada: Summary***