Frequently Asked Questions
Transparency when you need it most
Not likely. If you have a car loan against it, most of the time you keep the car as long as you can afford the loan. In most cases the creditor is willing to continue the loan with you. If you have no loan on your car, the value of the vehicle becomes very important. If your vehicle value (based on black book) is more than the current exemption amount you may have to pay for the difference in the value. This can be factored in to your proposal payment and allow you to keep your vehicle. Keep in mind that the current exemption amount only applies to one vehicle. Any additional ones you may have are considered at full black book value.
There is a formula that is published by the Government of Canada. The payments are based on the
family size and the family income. For Example, for a family of two, the current guideline amount is $2,799. So if you and your spouse have a combined take-home (after tax) income of $3,200 per month, your family surplus is $3,200 – $2,799 = $401. Half of this amount ($200.50) would be payable each month. Keep in mind that only portion of this amount would be payable. If you want to calculate your own family’s surplus, click here.
There are many factors that will be taken into consideration. Call us at 519-300-HELP and we will help you calculate your amount accurately.
There are two main credit reporting agencies in Canada. Equifax and Trans Union. Keep in mind that your credit report is just one tool that is used to calculate your credit score. Your credit score is what lenders will consider when deciding how much of a credit risk you are. Generally, a higher score is a lower credit risk. Generally, credit scores can be interpreted as follows, but keep in mind that not all agencies use the same scoring methods:
300-629: Bad credit
630-689: Fair/average credit
690-719: Good credit
720 and up: Excellent credit
Credit reports contain information about your history. The following are important things that will have a negative impact on your credit score:
What can I do to fix errors on my credit report?
Equifax, Canada’s largest credit reporting agency, uses a 1 to 9 scale in its reports. A perfect credit rating is an R1, a proposal is an R7 and a bankruptcy is an R9. For proposals, the rating will remain for 3 years after completion. So if your proposal is a 5 year proposal, the total term would be 8 years. If this is your first bankruptcy, your credit rating will be posted as an R9 for six years after you receive your discharge. If this is a second bankruptcy, it will appear for 14 years after your discharge. The length of time to get your discharge depends on your income level and whether you have met all of the required duties.
It is important to check your credit report regularly, at least once a year, to make sure your personal and account information are complete and correct. Click here for a free Equifax report. Click here for a free Trans Union report.
If you make a formal filing, whether it is a proposal or a bankruptcy, there will be a note on your credit report that discloses this information. The federal Government provides the credit reporting agency with all of the information. It is NOT your Licensed Insolvency Trustee that provides this information. Click here for dealing with errors on your Equifax report.
CreditVision Risk Score ranges on a numbered scale from 300 to 900. If there is an error on your Trans Union report, click here.
This is an area that no one wants to experience. But in reality, we are all likely to have to deal with the affairs of a loved one when they pass. If our loved one has debt, the matter becomes complicated. Here is some essential information to follow when a loved one has passed on:
- Read the Will. If they don’t have one, it may not be a problem unless they have assets that have not been designated to a beneficiary. In that case, you will need a lawyer.
- Debts of our loved one have to be paid from the property of their estate. Beneficiaries are entitled to the surplus of the funds available after debts and estate costs are paid.
- Do not assume that the debts of our loved one have to be paid from life insurance proceeds. Life insurance proceeds payable to a third party (spouse, kids, etc.) ARE NOT property of our loved one’s estate. We know this can be complicated and confusing so never hesitate to pick up the phone and call us.
- If you have been appointed an executor of an estate and are not sure how to proceed, call us. We will help you navigate through this difficult process. If the estate is insolvent, we can help you wind it down if that’s what’s needed. If it is solvent, we have a network of professionals that we can refer you to. You are not alone and we will put you in touch with someone who can help. We do not charge for referrals.
Important Laws
Under the Bankruptcy and Insolvency Act
Remember – it is essential to disclose all information regarding your financial situation. When you meet with a Licensed Insolvency Trustee, they will ensure that you are fully educated on the various laws that apply to an insolvent person who files a bankruptcy or a proposal. A summary of some of those laws are found below. If you have any questions, call us at 519-300-HELP and we will be happy to assist you.
- (a) the assets of the bankrupt are not of a value equal to fifty cents on the dollar on the amount of the bankrupt’s unsecured liabilities, unless the bankrupt satisfies the court that the fact that the assets are not of a value equal to fifty cents on the dollar on the amount of the bankrupt’s unsecured liabilities has arisen from circumstances for which the bankrupt cannot justly be held responsible;
- (b) the bankrupt has omitted to keep such books of account as are usual and proper in the business carried on by the bankrupt and as sufficiently disclose the business transactions and financial position of the bankrupt within the period beginning on the day that is three years before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included;
- (c) the bankrupt has continued to trade after becoming aware of being insolvent;
- (d) the bankrupt has failed to account satisfactorily for any loss of assets or for any deficiency of assets to meet the bankrupt’s liabilities;
- (e) the bankrupt has brought on, or contributed to, the bankruptcy by rash and hazardous speculations, by unjustifiable extravagance in living, by gambling or by culpable neglect of the bankrupt’s business affairs;
- (f) the bankrupt has put any of the bankrupt’s creditors to unnecessary expense by a frivolous or vexatious defence to any action properly brought against the bankrupt;
- (g) the bankrupt has, within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included, incurred unjustifiable expense by bringing a frivolous or vexatious action;
- (h) the bankrupt has, within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included, when unable to pay debts as they became due, given an undue preference to any of the bankrupt’s creditors;
- (i) the bankrupt has, within the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included, incurred liabilities in order to make the bankrupt’s assets equal to fifty cents on the dollar on the amount of the bankrupt’s unsecured liabilities;
- (j) the bankrupt has on any previous occasion been bankrupt or made a proposal to creditors;
- (k) the bankrupt has been guilty of any fraud or fraudulent breach of trust;
- (l) the bankrupt has committed any offence under this Act or any other statute in connection with the bankrupt’s property, the bankruptcy or the proceedings thereunder;
- (m) the bankrupt has failed to comply with a requirement to pay imposed under section 68;
- (n) the bankrupt, if the bankrupt could have made a viable proposal, chose bankruptcy rather than a proposal to creditors as the means to resolve the indebtedness; and
- (o) the bankrupt has failed to perform the duties imposed on the bankrupt under this Act or to comply with any order of the court.
Application to farmers
(2) Paragraphs (1)(b) and (c) do not apply in the case of an application for discharge by a bankrupt whose principal occupation and means of livelihood on the date of the initial bankruptcy event was farming or the tillage of the soil.
- An order of discharge does not release the bankrupt from
- (a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;
- (a.1) any award of damages by a court in civil proceedings in respect of
- (i) bodily harm intentionally inflicted, or sexual assault, or
- (ii) wrongful death resulting therefrom;
- (b) any debt or liability for alimony or alimentary pension;
- (c) any debt or liability arising under a judicial decision establishing affiliation or respecting support or maintenance, or under an agreement for maintenance and support of a spouse, former spouse, former common-law partner or child living apart from the bankrupt;
- (d) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others;
- (e) any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim;
- (f) liability for the dividend that a creditor would have been entitled to receive on any provable claim not disclosed to the trustee, unless the creditor had notice or knowledge of the bankruptcy and failed to take reasonable action to prove his claim;
- (g) any debt or obligation in respect of a loan made under the Canada Student Loans Act, the Canada Student Financial Assistance Act or any enactment of a province that provides for loans or guarantees of loans to students where the date of bankruptcy of the bankrupt occurred
- (i) before the date on which the bankrupt ceased to be a full- or part-time student, as the case may be, under the applicable Act or enactment, or
- (ii) within seven years after the date on which the bankrupt ceased to be a full- or part-time student;
- (g.1) any debt or obligation in respect of a loan made under the Apprentice Loans Act where the date of bankruptcy of the bankrupt occurred
- (i) before the date on which the bankrupt ceased, under that Act, to be an eligible apprentice within the meaning of that Act, or
- (ii) within seven years after the date on which the bankrupt ceased to be an eligible apprentice; or
- (h) any debt for interest owed in relation to an amount referred to in any of paragraphs (a) to (g.1).
- (a.1) any award of damages by a court in civil proceedings in respect of
Special provision for Student Loans
(1.1) At any time after five years after the day on which a bankrupt who has a debt referred to in paragraph (1)(g) or (g.1) ceases to be a full- or part-time student or an eligible apprentice, as the case may be, under the applicable Act or enactment, the court may, on application, order that subsection (1) does not apply to the debt if the court is satisfied that
- (a) the bankrupt has acted in good faith in connection with the bankrupt’s liabilities under the debt; and
- (b) the bankrupt has and will continue to experience financial difficulty to such an extent that the bankrupt will be unable to pay the debt.
- (a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence, or any debt arising out of a recognizance or bail;
- The property of a bankrupt divisible among his creditors shall not comprise
- (a) property held by the bankrupt in trust for any other person;
- (b) any property that as against the bankrupt is exempt from execution or seizure under any laws applicable in the province within which the property is situated and within which the bankrupt resides;
- (b.1) goods and services tax credit payments that are made in prescribed circumstances to the bankrupt and that are not property referred to in paragraph (a) or (b);
- (b.2) prescribed payments relating to the essential needs of an individual that are made in prescribed circumstances to the bankrupt and that are not property referred to in paragraph (a) or (b); or
- (b.3) without restricting the generality of paragraph (b), property in a registered retirement savings plan or a registered retirement income fund, as those expressions are defined in the Income Tax Act, or in any prescribed plan, other than property contributed to any such plan or fund in the 12 months before the date of bankruptcy,
but it shall comprise
- (c) all property wherever situated of the bankrupt at the date of the bankruptcy or that may be acquired by or devolve on the bankrupt before their discharge, including any refund owing to the bankrupt under the Income Tax Act in respect of the calendar year — or the fiscal year of the bankrupt if it is different from the calendar year — in which the bankrupt became a bankrupt, except the portion that
- (i) is not subject to the operation of this Act, or
- (ii) in the case of a bankrupt who is the judgment debtor named in a garnishee summons served on Her Majesty under the Family Orders and Agreements Enforcement Assistance Act, is garnishable money that is payable to the bankrupt and is to be paid under the garnishee summons, and
- (d) such powers in or over or in respect of the property as might have been exercised by the bankrupt for his own benefit.
- (a) property held by the bankrupt in trust for any other person;
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- (a) make discovery of and deliver all his property that is under his possession or control to the trustee or to any person authorized by the trustee to take possession of it or any part thereof;
- (a.1) in such circumstances as are specified in directives of the Superintendent, deliver to the trustee, for cancellation, all credit cards issued to and in the possession or control of the bankrupt;
- (b) deliver to the trustee all books, records, documents, writings and papers including, without restricting the generality of the foregoing, title papers, insurance policies and tax records and returns and copies thereof in any way relating to his property or affairs;
- (c) at such time and place as may be fixed by the official receiver, attend before the official receiver or before any other official receiver delegated by the official receiver for examination under oath with respect to his conduct, the causes of his bankruptcy and the disposition of his property;
- (d) within five days following the bankruptcy, unless the time is extended by the official receiver, prepare and submit to the trustee in quadruplicate a statement of the bankrupt’s affairs in the prescribed form verified by affidavit and showing the particulars of the bankrupt’s assets and liabilities, the names and addresses of the bankrupt’s creditors, the securities held by them respectively, the dates when the securities were respectively given and such further or other information as may be required, but where the affairs of the bankrupt are so involved or complicated that the bankrupt alone cannot reasonably prepare a proper statement of affairs, the official receiver may, as an expense of the administration of the estate, authorize the employment of a qualified person to assist in the preparation of the statement;
- (e) make or give all the assistance within his power to the trustee in making an inventory of his assets;
- (f) make disclosure to the trustee of all property disposed of within the period beginning on the day that is one year before the date of the initial bankruptcy event or beginning on such other antecedent date as the court may direct, and ending on the date of the bankruptcy, both dates included, and how and to whom and for what consideration any part thereof was disposed of except such part as had been disposed of in the ordinary manner of trade or used for reasonable personal expenses;
- (g) make disclosure to the trustee of all property disposed of by transfer at undervalue within the period beginning on the day that is five years before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included;
- (h) attend the first meeting of his creditors unless prevented by sickness or other sufficient cause and submit thereat to examination;
- (i) when required, attend other meetings of his creditors or of the inspectors, or attend on the trustee;
- (j) submit to such other examinations under oath with respect to his property or affairs as required;
- (k) aid to the utmost of his power in the realization of his property and the distribution of the proceeds among his creditors;
- (l) execute any powers of attorney, transfers, deeds and instruments or acts that may be required;
- (m) examine the correctness of all proofs of claims filed, if required by the trustee;
- (n) in case any person has to his knowledge filed a false claim, disclose the fact immediately to the trustee;
- (n.1) inform the trustee of any material change in the bankrupt’s financial situation;
- (o) generally do all such acts and things in relation to his property and the distribution of the proceeds among his creditors as may be reasonably required by the trustee, or may be prescribed by the General Rules, or may be directed by the court by any special order made with reference to any particular case or made on the occasion of any special application by the trustee, or any creditor or person interested; and
- (p) until his application for discharge has been disposed of and the administration of the estate completed, keep the trustee advised at all times of his place of residence or address.
Any bankrupt who
- (a) makes any fraudulent disposition of the bankrupt’s property before or after the date of the initial bankruptcy event,
- (b) refuses or neglects to answer fully and truthfully all proper questions put to the bankrupt at any examination held pursuant to this Act,
- (c) makes a false entry or knowingly makes a material omission in a statement or accounting,
- (d) after or within one year immediately preceding the date of the initial bankruptcy event, conceals, destroys, mutilates, falsifies, makes an omission in or disposes of, or is privy to the concealment, destruction, mutilation, falsification, omission from or disposition of, a book or document affecting or relating to the bankrupt’s property or affairs, unless the bankrupt had no intent to conceal the state of the bankrupt’s affairs,
- (e) after or within one year immediately preceding the date of the initial bankruptcy event, obtains any credit or any property by false representations made by the bankrupt or made by any other person to the bankrupt’s knowledge,
- (f) after or within one year immediately preceding the date of the initial bankruptcy event, fraudulently conceals or removes any property of a value of fifty dollars or more or any debt due to or from the bankrupt, or
- (g) after or within one year immediately preceding the date of the initial bankruptcy event, hypothecates, pawns, pledges or disposes of any property that the bankrupt has obtained on credit and has not paid for, unless in the case of a trader the hypothecation, pawning, pledging or disposing is in the ordinary way of trade and unless the bankrupt had no intent to defraud,
is guilty of an offence and is liable, on summary conviction, to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year or to both, or on conviction on indictment, to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding three years, or to both.
Failure to comply with duties
(2) A bankrupt who, without reasonable cause, fails to comply with an order of the court made under section 68 or to do any of the things required of the bankrupt under section 158 is guilty of an offence and is liable
- (a) on summary conviction, to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year, or to both; or
- (b) on conviction on indictment, to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding three years, or to both.
199 An undischarged bankrupt who
- (a) engages in any trade or business without disclosing to all persons with whom the undischarged bankrupt enters into any business transaction that the undischarged bankrupt is an undischarged bankrupt, or
- (b) obtains credit to a total of $1,000 or more from any person or persons without informing them that the undischarged bankrupt is an undischarged bankrupt,
is guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year, or to both.
Any person becoming bankrupt or making a proposal who has on any previous occasion been bankrupt or made a proposal to the person’s creditors is guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding one year, or to both, if
- (a) being engaged in any trade or business, at any time within the period beginning on the day that is two years before the date of the initial bankruptcy event and ending on the date of the bankruptcy, both dates included, that person has not kept and preserved proper books of account; or
- (b) within the period mentioned in paragraph (a), that person conceals, destroys, mutilates, falsifies or disposes of, or is privy to the concealment, destruction, mutilation, falsification or disposition of, any book or document affecting or relating to the person’s property or affairs, unless the person had no intent to conceal the state of the person’s affairs.
Proper books of account defined
(2) For the purposes of this section, a debtor shall be deemed not to have kept proper books of account if he has not kept such books or accounts as are necessary to exhibit or explain his transactions and financial position in his trade or business, including a book or books containing entries from day to day in sufficient detail of all cash received and cash paid, and, where the trade or business has involved dealings in goods, also accounts of all goods sold and purchased, and statements of annual and other stock-takings.
Help with Student Loans
What do I do when I can’t pay it back?
Step one – Register your account online. The following link will take you to the sign in area:
The time period for repayment is normally 9.5 years – this can be extended to 14.5 years. Your repayment of the student loan will start 6 months after you leave school full time. Interest on the loan will start on the day you finish, and is calculated as follows:
- Federal Loans: Prime rate
- Ontario Loans: Prime rate + 1%
IF you start a business or volunteer/work for a non-profit entity, you can extend the time period for an additional 6 months.
A reduced or eliminated payment is available in some circumstances. An application can be made every 6 months for this assistance. The granting of relief depends on the size and income of the family. Payments should not exceed 20% of family income – in some situations, no payment will be required for the 6 month period. The government pays the amount that you are not able to pay – as long as the application is made every 6 months.
The following is a link to the Repayment Assistance Estimator: Click Here
If you did not apply for, or did not receive relief, you are expected to make the payment as determined by your repayment schedule. If you do not make a payment for 9 months, your account will be turned over to a collection agency who will take action to collect the amount due.
You should contact a Licensed Insolvency Trustee and explore the option of either a bankruptcy or a proposal.
The whole area of Student Loans in a bankruptcy/proposal can be very confusing. If you were to ask a group of Debtors, some will tell you their loan was included and others will say they still had to pay.
The first thing to know is that EVERY SITUATION IS DIFFERENT. The answer FOR YOU depends on the date that you last attended school. To get the exact date, call the National Student Loans Service Centre at 1-888-815-4514 and ASK – What is the date that they have on file as the day that you last attended?
If it has been at least 7 years since you last attended school:
You qualify for automatic relief under the Bankruptcy and Insolvency Act. If you go bankrupt or make a formal proposal, the student loan debt will be included in the filing. You will not have to repay the student loan.
If the date is less than 7 years but more than 5 years:
For Debtors who do not qualify for automatic relief, but have been out of school for at least 5 years, there is a hardship application that can be done to have the loan included in your bankruptcy/proposal. It is important to note that the 5 year anniversary of your leaving school does not have to occur before you file. To be successful in this application, you must generally demonstrate that you acted in good faith, did not benefit economically from the loan and you are unable to make the payments. A professional can assist you in formulating the application for a reasonable fee. For a direct referral, please contact our office and we will put you in touch with a trusted professional.
