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I thank God everyday for making that first phone call. We will always be thankful and very grateful. We both learned a valuable lesson from all of this. Thank you so much.

- individual we've assisted

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Effect of filing bankruptcy in Thunder Bay and NW Ontario

If I declare bankruptcy in Thunder Bay, will my wages be garnished?

No. In fact, if you live in Thunder Bay or anywhere in Ontario, bankruptcy prevents your creditors from garnishing your wages and protects your income to ensure a reasonable standard of living.

If my wages were garnished by a creditor before my bankruptcy, will my employer be informed of my bankruptcy?

Your employer was already contacted by your creditors so they could garnish your wages. In order to stop this wage garnishment, we will have no choice but to inform your employer of your bankruptcy. To avoid this, you should consider declaring bankruptcy before one of your creditors garnishes your wages.

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When are payments from my income required during bankruptcy?

When a person files an Assignment in Bankruptcy in Thunder Bay, a portion of their take-home pay may be payable to the Trustee for the benefit of all creditors. The actual amount payable depends on several factors, including: the take-home pay of the family unit, the number of people in the family and whether the family has non-discretionary expenses such as child care or child support. Any questions you have with respect to surplus income can be addressed with the Trustee when you first meet with us.

Surplus Income

Under the Canadian bankruptcy surplus rules, if you have surplus income greater than, on average, $200 per month, your bankruptcy is automatically extended for a further 12 months. A first time bankrupt with surplus income is bankrupt for 21 months, and they are required to make surplus income payments for the entire 21 months.

The surplus income rules in Canada are very complicated. There are countless possible outcomes depending on your personal situation.

Before you decide to file bankruptcy, you need to have a detailed consultation with a Grant Thornton professional, and ask them to explain, in detail, how your surplus income payment will be calculated in your case. Spending ten minutes with us and a calculator will help you prepare for your bankruptcy. The rules are complicated, but with proper research you can understand how the rules will affect you, and you can be prepared for all possible situations. For more details on income during bankruptcy see Directive 11R2-2012 from the Office of the Superintendent of Bankruptcy Canada.

How would bankruptcy affect my HST refunds and my tax refund?

Tax refunds for the bankruptcy year will be seized by the Thunder Bay Trustee. HST refunds will continue to be sent to you during your bankruptcy.

Federal tax credits will be sent directly to the Trustee. Provincial tax credits for the year of your bankruptcy will have to be transferred to the Trustee.

If I declare bankruptcy in Thunder Bay or NW Ontario, will the money I receive for my children from the federal and provincial government be seized?

No, family allowances will not be seized.

Can my retirement pension and/or my RRSPs be seized if I declare bankruptcy?

In Ontario, only contributions made to RRSPs during the 12 month period prior to the date of bankruptcy will be seized. Pensions are exempt from seizure.

If I declare bankruptcy, do I have to continue paying off my student loan?

If you finished school more than seven years ago, you will not have to pay off your student loan because it becomes a dischargeable debt in the event of bankruptcy.

Otherwise you will have to continue paying off your loan.

Do I have to pay my income tax debt if I declare bankruptcy?

Income taxes owed before the date of bankruptcy are almost always dischargeable, therefore you will not have to pay them.

What property can I keep if I declare bankruptcy?

Assets you can keep if you declare bankruptcy varies by Province.

Here are the complete details on what assets you can keep in bankruptcy.

Will my share of an inheritance be seized in the event of bankruptcy?

Your share of an inheritance may be seized in the event of bankruptcy.

How long will it take for me to get a bankruptcy discharge?

For a first bankruptcy, you are eligible for an automatic discharge after nine months or 21 months if you have income exceeding the standard amount deemed to be reasonable by the Government of Canada. For a second bankruptcy, it may take 24 to 36 months. In any case, if you are an individual with tax debt of over $200,000 that totals more than 75% of your total debt, you cannot receive an automatic discharge. The Licensed Insolvency Trustee will have to file an application with the court. Company debt obligations are not included in the $200,000 calculation for directors.

After a bankruptcy, how long will my credit score be affected?

It varies by credit agency. In general, your credit score will be affected for 6 years after discharge for a first bankruptcy and for 14 years for a second bankruptcy. You may be able to rebuild your credit earlier, though. Our experts can show you how to fix your credit.

However, if you make a consumer proposal your credit score will be affected for 3 years after you have paid the full amount promised to your creditors in your proposal.

How many times can I declare bankruptcy?

The law sets no limit. However, if you have declared bankruptcy repeatedly (3 or more times) the application for discharge must be filed with the court. The bankruptcy court may then issue a discharge judgment extending the bankruptcy period or a conditional discharge judgment ordering the payment of an additional amount.

Can I annul my bankruptcy by paying back my creditors?

To annul your bankruptcy, you have to pay your creditors back in full and file a petition with the court. It could also be annulled if you make a proposal to creditors while in bankruptcy and the proposal is accepted by creditors.

Can I start my own business if I have declared bankruptcy?

When you are in bankruptcy, you cannot be the director of an incorporated company. You may continue to be self-employed, however. During your bankruptcy, you may also run an unincorporated sole proprietorship.

Can I continue to manage my company if I have declared personal bankruptcy?

A person who has declared bankruptcy cannot be the director of an incorporated company. However, if the company is not incorporated, the bankrupt person may continue to manage it. If the bankrupt person is self-employed, he or she may continue to run the business.

These answers to frequently asked questions are provided as general information only. Each individual's situation is unique. To speak to someone now in Thunder Bay or Northwestern Ontario call us at 310-8888 for a free, no obligation, confidential consultation.

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Thunder Bay, Ontario   P7B 5Z8

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