Resources for debtors: Frequently asked questions
Does "Find a Trustee" contain a complete list of all the trustees in Canada that administer bankruptcies and consumer proposals?
No. All of Canada's Licensed Insolvency Trustees obtain their licensing through Canada's Office of the Superintendent of Bankruptcy. A complete listing of all licenced trustees regardless whether they focus their practice on assisting corporate enterprises or individuals, whether they hold their licence as an individual or as a corporation, and regardless whether they are part of a multi-national organization or a a smaller boutique can be sourced from the OSB's website at http://www.ic.gc.ca/app/osb/tds/list.html. That listing will include, whereas ours does not, larger trustee firms. Our listing of Canada's Licensed Insolvency Trustees focuses on those trustees who own and manage their smaller insolvency practice and provide assistance to financially distressed individuals - the very trustee you may prefer.
Formerly, Licensed Insolvency Trustees were called trustees in bankruptcy but are no longer referred to as such.
- When can I get a credit card again?
This is sometimes the first question a trustees receives. Well, you might be able to get one right away - a secured credit card, a supplemental card approved by a friend or relative, or a prepaid credit card. A trustee can tell you how.
How will bankruptcy affect my credit rating?
The credit bureau will give you a low credit rating which is removes after a stipulated time, usually six years which is the same time any creditors' comments - positive and negative - are normally in the credit bureau.
Will my creditors stop bothering me?
Under Canadian bankruptcy law, collection and contact by unsecured creditors must stop upon the filing of a bankruptcy or a consumer proposal. This stay of proceedings does not apply secured creditors - to any creditor that has a valid lien on an asset you own such as a mortgage on a home or a lease of a vehicle.
- Will anyone come to my house?
Legal actions and collection activities actually stop when a bankruptcy or consumer proposal is filed. Creditors stop bothering you. Garnishments stop. Although the Bankruptcy and Insolvency Act laws include incredible powers of investigation, going to your home would be a first time for almost every trustee.
A Licensed Insolvency Trustee would go to your home if it was necessary to review or ascertain the value of assets or to pick up assets or books and records.
- Do I need a new bank account?
If you are operating from an overdrawn account, if you owe monies to the bank / credit union on a line of credit, if you owe monies to the bank's credit card arm, or if you have a debt to payroll loan companies that will keep hitting at your account and create NSF fees, then absolutely you should start with a fresh bank account.
- Is it easy to get a new bank account?
Yes. Banks cannot refuse to give you a new account, but they can refuse to give you privileges associated with bank accounts such as a debit card, overdraft protection, and cheques. Ask your trustee for their recommendation regarding which friendly banker you should go to.
- Will my tax debts be included?
Absolutely. Your income tax debts, GST, and HST are part of the debts included in your consumer proposal to creditors or in your bankruptcy. If you have debts for source deductions - where you were an employer - sometimes these debts linger throughout your bankruptcy or proposal.
Canada Revenue Agency has broad powers and can actually become a secured creditor by obtaining a certificate from Tax Court and registering it against your property. Your trustee can check if htis has happened by performing a search of the land titles registry or the personal property registry in the province where you live.
- How will my bankruptcy affect my spouse?
It's actually the other way around. If you are bankrupt, then the amount of your spouse's income can affect the amount you must pay to get through the bankruptcy process.
If your spouse or anyone else guaranteed or co-signed one of your debts, they are liable for the debt until it is fully paid. Bankruptcy doesn't change that.