dealing with debt a consumer's guide

8/14/2019 Dealing With Debt a Consumer's Guide

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Dealing

with DebtA Consumers Guide

osb.ic.gc.ca


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For additiona copies o this pubication or to request this pubicationin accessibe ormats, pease contact:

Oce o the Superintendent o BankruptcyHeritae Pace155 Queen Street, 4th FoorOttawa ON K1A 0H5

Te.: 613-941-1000Fax: 613-941-2862Emai: [email protected]: osb.ic.c.ca

This pubication is aso avaiabe onine at osb.ic.c.ca.

Permission to Reproduce

Except as otherwise specicay noted, the inormation in thispubication may be reproduced, in part or in whoe and by anymeans, without chare or urther permission rom Industry Canada,provided that due diience is exercised in ensurin the accuracyo the inormation reproduced; that Industry Canada is identied asthe source institution; and that the reproduction is not representedas an ocia version o the inormation reproduced, nor as havin beenmade in aiation with, or with the endorsement o, Industry Canada.

For permission to reproduce the inormation in this pubication orcommercia redistribution, pease emai [email protected].

Cat. No. Iu76-7/2009EISBN 978-1-100-13639-4

Aussi oert en ranais sous e titre Se sortir de lendettement :guide pour les consommateurs.

Printed on recyced paper:Cover: 100%Inside paes: 100%

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Reconize the daner sinas . . . . . . . . . . . . . . . . . 6

Possibe soutions . . . . . . . . . . . . . . . . . . . . . . . . . . 7

What you shoud know . . . . . . . . . . . . . . . . . . . . . . 9

Where to o or hep . . . . . . . . . . . . . . . . . . . . . . . 17

Assessment and counsein. . . . . . . . . . . . . . . . . 18

Consumer proposa. . . . . . . . . . . . . . . . . . . . . . . . 19

Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Appendix I Excerpts rom the Bankruptcyand Insolvency Act

concernin bankruptcies. . . . . . . . . . . . . . . . . . . . 29

Appendix II

Division Oces othe Superintendent o Bankruptcy . . . . . . . . . . . . 35


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4 DEAlINg WITH DEBT 5

IntroduCtIon

Many Canadians ace a nancia crisis at some time.Most debt probems are easy to sove. Others needproessiona assistance. The best way to dea withyour nancia probems is to admit to them and takecontro beore they et out o hand.

This booket can hep you decide whether you have aserious debt probem. It aso ives some suestionsor sovin your dicuties and avoidin them in theuture. The inormation in this booket is meant orindividuas ony and does not appy to corporations.

Readers are reminded that this booket is not meant tobe used or ea purposes. Its ony aim is to ive inor-mation to individuas who are havin nancia dicuties.

Mandate

and MIssIonof the office ofthe Superintendent

of Bankruptcy

The Superintendent o Bankruptcy is mandated tosupervise the administration o a estates and mattersunder insovency eisation.

To u its eisative mandate, the Oce o theSuperintendent o Bankruptcy (OSB) has undertakenthe mission to contribute to a air and ecient market-pace by protectin the interity o the Bankruptcy andInsovency system or the benet o investors, enders,consumers and pubic interest.

The OSB intends to achieve this mission by concen-tratin its eorts on the oowin our strateicobjectives:

maintain an ecient and eective reuatory1. ramework;

promote awareness o the rihts and responsibiities2.o the stakehoders in the insovency system;

ensure trustee and debtor compiance with the3.eisative and reuatory ramework; and

be an intera source o inormation on Canadian4.insovency matters.


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reCognIzethe danger SignalS

You have a debt probem, or are oin to have one, i:

you continuay o over your spendin imit or you-use your credit cards as a necessity rather than aconvenience;

you are aways borrowin money to make it rom-one payday to the next;

your waes have been arnisheed to pay or-outstandin debts;

you pay ony interest or service chares monthy-and do not reduce your tota debt over many months;

creditors pressure you or payment, threaten to-sue or repossess your car, urniture or teevision,or hire a coection aency to recover the moneyor them; or

utiity companies cut o service because your bis-have one unpaid.

poSSiBle

solutIonsContact your creditors

Expain why you cant make your payments and suestmakin ower payments over a oner period o time.You may be surprised by how many creditors are wiinto accept such arranements.

Credit counselling

Credit counsein services are avaiabe, but may bedierent rom province to province. Contact a ocaamiy or community counsein oce or a creditcounsein association to nd out how to et in touchwith such a service. I you have dicuty makin abudet and stickin to it, counsein may hep you.

Debt consolidation loan

You can ask a bank or nancia institution about com-binin or consoidatin your debts into one oan.In such a case, the bank or nancia institution wipay o a your debts and, in return, you make sinemonthy payments to the bank or nancia institution.Make sure to shop around because interest rates aredierent. It is important to stop buyin on credit.Continuin to use credit coud make your debt oadtoo reat or you to hande.

Consolidation order

I you ive in Aberta, Saskatchewan or Nova Scotia,you may appy or a consoidation order. A consoidationorder sets out the amount and the times when payments


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are due to the court. The court wi distribute yourpayments to your creditors. This part o the Bankruptcyand Insolvency Act(Part X: Ordery Payment o Debts)ets you pay o your debts over three years and reesyou rom creditor harassment and wae arnishment.Unike bankruptcy, you do not ose your assets.

Voluntary Deposit scheme

For residents o Quebec, the Vountary Deposit scheme(better known as the lacombe law) is simiar to aconsoidation order. You must make a monthy paymentbased on your income and number o dependants, tothe court. This service is usuay avaiabe at the ocacourthouse.

Consumer proposal

Under the Bankruptcy and Insolvency Actyou may makea consumer proposa to your creditors to reduce theamount o your debts, extend the time you have to pay othe debt, or provide some combination o both. Consumerproposas are expained in more detai on pae 19.

Bankruptcy

I none o the above methods soves your debt probem,you may choose to decare bankruptcy. Bankruptcyshoud be a ast resort i you cannot meet your nan-cia obiations throuh aordabe payments over aspecic period o time.

Bankruptcy is a ea process perormed under theBankruptcy and Insolvency Act. Because o yourinabiity to pay your debts, you assin a o your assets,except those exempt by aw, to a icensed trustee inbankruptcy. This process reieves you o most debts,

and ea proceedins aainst you by creditors shoudstop. Bankruptcy is expained in more detai on pae 23.

What you

should knowAdministrator of consumer proposals

An administrator o consumer proposas is atrustee in bankruptcy or a person appointed by theSuperintendent o Bankruptcy. British Coumbia(1-800-663-7867), Saskatchewan (1-306-933-6520),Nova Scotia (1-902-424-7020) and Prince EdwardIsand (1-902-368-4580) provide administration oconsumer proposas. You may wish to contact the

appropriate provincia department. With reard totrustees in bankruptcy, their names may usuay beound in the Yeow Paes under the headins oBankruptcy or Trustees in Bankruptcy.

Assets acquired during bankruptcy

You must assin to your trustee a assets acquireddurin your bankruptcy, incudin ottery winninsand inheritances, so they can be divided amonyour creditors.

Assets and property

In a bankruptcy, you must assin a your assets tothe trustee, except or exempt property, such as basicurniture and toos-o-trade needed to make your ivin.Exempt property can vary rom province to province.Your trustee can te you what these are.

Bankrupt

This is the ea status o a person who decaresbankruptcy.


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Bankruptcy and Insolvency Act(the Act)

This is the edera aw that reuates bankruptcy andinsovency in Canada.

Bankruptcy Court

This is a court in which a jude or reistrar wi decideon a bankrupts appication or dischare and otherinsovency matters. Dischares are expained in moredetai on pae 26.

Co-signers

Your bankruptcy does not cance the responsibiity oanyone who has uaranteed or co-sined a oan on

your beha. For exampe, i your parent co-sined aoan or you, that parent woud be iabe to pay theoan in u even i you decide to e or bankruptcy.

Creditor

A creditor is a person, institution or business to whomyou owe money. Secured creditors are creditors thathave taken certain measures to protect themsevesand hod a mortae, pede, ien or simiar instrumenton, or aainst, your assets. I secured creditors are not

repaid, they can enorce their caims by recoverin theassets on which they hod security.

Unsecured creditors are creditors that do not have anysecurity or the debt owin to them.

Credit rating and re-establishment of credit

Credit bureaus coect inormation about consumersnancia aairs and se the inormation to their cients,such as credit enders, empoyers and insurance

companies. These aencies obtain inormation romvarious sources, or exampe:

rom the consumer who provides inormation when-in out an appication or credit or a oan;

rom pubic records that provide inormation reated-

to such matters as bankruptcy, court judmentsand conditiona saes contracts that are reisteredwith provincia authorities;

rom credit enders and coection aencies that-provide credit es on a monthy basis. These escontain inormation such as the account number,the outstandin baance and a nine-point ratinscae, indicatin, or exampe: R1 that paymentwas made on time; R2 that payment was made3060 days ate; and R9 a bad debt or one

that has been paced or coection (aso appies tobankruptcy).

It shoud be noted that your credit ratin is set by yourcreditors. Credit bureaus ony pass that inormation onto their cients.

generay, inormation concernin your bankruptcycoud show up on your e or a period o 6 to 7 yearsater your dischare. I you have been bankrupt beore,this period coud be extended to as much as 14 years.

This period coud vary rom one province to another.The decision as to whether or not to rant credit to anappicant is made by the credit ender, not the creditbureau. It is the enders individua credit scorin systemthat determines access to credit.

Shoud you wish to improve your credit ratin aterobtainin your dischare rom bankruptcy, you coud,or instance, contact your banker and request a meetin.For this meetin, you coud brin your paychequestubs, your budet and your dischare papers. You

coud expain that you have obtained your dischareand ask the banker how you can earn your way backto a ood credit ratin.


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Debtor

A debtor is a person who receives a oan or an advanceo oods and services in exchane or a promise to pay

at a ater date.

Income tax returns

You must compete two income tax returns or thecaendar year in which you become bankrupt. Thepre-bankruptcy return covers the period rom thebeinnin o the year to the date o your bankruptcy.You wi be required to provide your trustee with detaisand documentation to support this return. The post-bankruptcy return covers the period rom the date o

bankruptcy to the end o the caendar year.Income tax reunds or both the pre- and post-bankruptcy periods become part o your bankruptcy.

Inspector

Inspectors are appointed by creditors to representthem beore the trustee durin the administration oproposas and bankruptcies. They are expected toassist the trustee by virtue o their experience and arerequired to supervise certain aspects o the trustees

administration.

Insolvent person

An insovent person has a debt o $1000 or more and isunabe to meet nancia obiations when they becomedue, or has ceased to do so, or whose tota assets, ithey were sod, woud not be enouh to pay or a othat persons nancia obiations.

Legal action

Athouh ea actions or most arnishments aainstyou stop on the date you decare bankruptcy or e

a consumer proposa, crimina actions and some civimatters, such as actions in matrimonia matters, arenot aected by a bankruptcy or proposa. You mustive the trustee or administrator copies o a eadocuments that you have received beore and aterthe date you became bankrupt or ed a proposa. Ina proposa, no creditor can, without permission o thecourt, start or continue any ea action unti the pro-posa is either withdrawn, reused or annued, or untithe administrator has been dischared. In the case o

a bankruptcy, no creditor can, without permission othe court, start or continue any ea action unti thetrustee has been dischared.

Mediation

Mediation is a way o resovin confict between twoor more individuas. In the context o a bankruptcy, animpartia and independent person the mediator wi hep the individuas invoved in a dispute tosette their disareement instead o oin to court.

generay, the mediator is an empoyee rom one othe Superintendent o Bankruptcys Division oces.Mediation is more fexibe, speedier and ess costythan orma court proceedins. It aows peope aectedby the bankruptcy to be directy invoved in decidinhow their disareement wi be setted.

In bankruptcy, mediation is avaiabe to resove twotypes o disputes:

when the trustee and the bankrupt are not ini.areement with the amount that the bankrupt, who

has surpus income, is required to pay creditors; and


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when opposition to the dischare is based on theii.act that the bankrupt has aied to compy with therequirement to make surpus income payments, ori the bankrupt coud have made a viabe proposaand has chosen bankruptcy rather than a proposaas a soution to debt.

When mediation takes pace, the bankrupt and thetrustee (or trustees representative) must be present. Ia creditor requests mediation, that creditor must asobe present.

For more inormation on mediation, you may ask yourtrustee to provide you with a ree copy o the brochureentited A About Bankruptcy Mediation prepared by

the Oce o the Superintendent o Bankruptcy or youmay consut the OSBs website at: osb.ic.c.ca.

Ofcial Receiver

The Ocia Receiver is a edera overnment empoyeein the Oce o the Superintendent o Bankruptcy andan ocer o the court with specic duties under theBankruptcy and Insolvency Act. The Ocia Receiver,amon other thins, accepts the documents that areed in proposas and bankruptcies, examines bank-

rupts under oath, and chairs meetins o creditors.

Payments and surplus income

Immediatey ater becomin bankrupt, you shoud nooner be required to make payments to your creditors.However, you have a duty to inorm your trustee o anymateria chane in your nancia situation, such as anincome tax reund, a new job or the birth o a newamiy member.

The trustee determines whether you have any sur-pus income, takin into consideration the standardsissued by the Superintendent o Bankruptcy, yourtota income, and your persona and amiy situation.Surpus income is the amount o tota income a bankruptreceives that exceeds the amount needed to maintaina reasonabe standard o ivin. I the trustee concudesthat you have surpus income, the trustee wi set theamount you must pay into the bankruptcy estate. Thisamount may be adjusted durin the administration oyour bankruptcy i there is a chane in either your totaincome or persona or amiy situation.

The Superintendent o Bankruptcys standards are setout in Directive No. 11, which is avaiabe on the OSBswebsite at: osb.ic.c.ca.

I you do not aree with the amount set by the trustee,the trustee must request mediation. Simiary, a creditormay request mediation i that creditor does not areewith the amount o the surpus income payment set bythe trustee. I mediation does not resove the dispute,the trustee, under certain circumstances, wi have toappy to court to have the matter decided.

Faiure to make the required payments may aect

your dischare (that is, the date o your reease rombankruptcy).

Pressure from creditors

One o the objectives o the Act is to reieve you opressure rom your creditors. I you receive phonecas or etters rom creditors, te them that you arebankrupt, or have made a proposa, and reer them toyour trustee or administrator o consumer proposas.


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Superintendent of Bankruptcy

The Superintendent o Bankruptcy is a ederay appointedocia by the governor in Counci who oversees the

administration o estates under the Bankruptcy andInsolvency Actin Canada.

Trustee in bankruptcy

A trustee in bankruptcy is a person icensed by theSuperintendent o Bankruptcy to administer proposasand bankruptcies. The trustee represents your creditorsand is an ocer o the court. However, the trusteecan ive you inormation and advice about boththe proposa and bankruptcy processes and make

sure that your rihts, as we as those o the creditors,are respected.

Where to go

for helpI you want more inormation on makin a consumerproposa to your creditors, contact an administrator oconsumer proposas usuay a trustee in bankruptcy.I you wish more inormation on decarin bankruptcy,you shoud contact a trustee in bankruptcy. The nameso trustees and administrators o consumer proposasin your area are usuay isted in the Yeow Paes underBankruptcy or Trustee in Bankruptcy, or provincia

overnment services. I you cannot secure the ser-vices o a trustee, contact the nearest Oce o theSuperintendent o Bankruptcy at Industry Canada (seeAppendix II, on pae 35).


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assessMentand counSelling

Beore you decide whether to make a consumer proposaor decare bankruptcy, the administrator o consumerproposas or the trustee, as the case may be, wi perorman assessment. The purposes o this assessment are toevauate your nancia situation, to expain the optionsavaiabe to you, and to discuss with you the merits andthe consequences o your choice.

Shoud you decide to make a consumer proposa ordecare bankruptcy, the Bankruptcy and Insolvency Act

requires that counsein be provided to you. Counse-in must be iven by a counseor reistered with theOce o the Superintendent o Bankruptcy. Counseinconsists o two sessions. Durin the rst counseinsession, you wi be provided with inormation concerninmoney manaement, spendin and shoppin habits,warnin sins o nancia dicuties, and obtainin andusin credit. In the second session, the counseor wihep you to discover and understand the causes oyour insovency or bankruptcy, and wi assist you in

estabishin a rehabiitation pan by hepin you todeveop recommendations and aternatives or a nan-cia action pan. You must attend these two sessions.Counsein may aso be provided to someone who isreated to you or has a nancia reationship with you.I you ee that you need additiona hep or assistance,you may ask or a third counsein session.

I you made a proposa and reuse or neect to use thisservice, the administrator o consumer proposas cannotissue a certicate o u perormance o consumer

proposa. I you decared bankruptcy and reuse orneect to use this service, you wi not be eiibe oran automatic dischare.

conSumer

proposal

What is a consumer proposal?

A consumer proposa is an oer made by a debtor to hisor her creditors to modiy his or her obiations to them.For exampe, you may propose to your creditors that youwi pay a ower amount each month, but over a onerperiod o time. Or you may propose that your creditorsaccept bein paid a percentae o what you owe.

How does a consumer proposalbenet you?

Your unsecured creditors wi not be abe to take easteps to recover their debts rom you (such as seizinassets or arnisheein waes) uness the proposa iswithdrawn, rejected or annued, or i the administratoris dischared beore the proposa was uy perormed.However, creditors may continue to pursue recoveryo debts that woud not be reeased by an order odischare in a bankruptcy (except i the proposaexpicity provides or the compromise o such caimsand the creditor votes in avour o the proposa).

Who can make a consumer proposal?

Any natura person who is insovent, incudin a bank-rupt, whose debts do not exceed $250 000, excudina mortae or the persons principa residence, canmake a consumer proposa. When a bankruptwishes to make a proposa, the proposa must rst beapproved by the inspectors and the bankrupt musthave obtained the assistance o a trustee who wibe the administrator o the consumer proposa. I thepersons debts exceed $250 000, the proposa wi bemade under Division I o Part III o the Act.


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It is aso possibe to make a joint consumer proposa.Two or more consumer proposas may be joinedwhere they coud reasonaby be deat with as oneproposa because o the nancia reationship o theconsumer debtors invoved. It must be emphasizedthat joint consumer proposas can be made ony ithe tota debt o a the consumer debtors does notexceed $500 000.

How does someone make a proposal?What is the procedure?

The procedure beins when you seek the hep o anadministrator who miht be a trustee in bankruptcy or aperson appointed by the Superintendent o Bankruptcy.This individua wi assess your nancia situation andive you advice about what kind o a proposa may bebest or you and your creditors. The administrator wiask you to sin the required orms, which wi then beed with the Ocia Receiver.

What happens after a proposal is ledwith the Ofcial Receiver?

Within 10 days ater in your proposa with the OciaReceiver, the administrator is required to send the

Ocia Receiver a report. The report contains theadministrators opinion about whether the proposa isair and reasonabe, and whether he or she beievesyou wi be abe to perorm it. It aso contains a ist oyour creditors.

At the same time, the administrator must send to eacho your creditors a copy o your proposa, o your state-ment o aairs (which contains the ist o your assetsand iabiities; ist o your creditors; inormation reated

to your persona aairs; and budet inormation) ando the administrators report on your proposa. I thereis a meetin o the creditors, the administrator wi askthe creditors to accept or reject the proposa.

How does a proposal get accepted?

Your creditors wi have up to 45 days to considerwhether to accept or reject your proposa. A creditormay send a notice to the administrator acceptin orrejectin the proposa. I creditors do not respond,they wi be considered to have accepted the proposa.I a sucient number o creditors accept the proposa,then it wi become bindin on you and your creditors,and you wi have to meet its terms.

What happens if the proposal is rejected?

I the proposa is rejected, you wi no oner be pro-tected by the Act. The administrator wi, within 5 days,notiy you, a your creditors and the Ocia Receivero the rejection. Your creditors wi now be abe to takeea steps to recover their debts rom you. I you werebankrupt when you made this proposa, the adminis-tration o your bankruptcy wi continue.

What if my proposal is accepted, andI fully meet the terms?

When the proposa is uy perormed, the administratormust ive a certicate o u perormance to you andthe Ocia Receiver, and you wi be reieved o thedebts that were in the proposa.


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What if I stop making the payments anddefault on the performance of the proposal?

I you ai to keep the terms o your proposa, it may be

annued or deemed annued. I you were insoventprior to makin the proposa, you return to the samesituation and your creditors woud have a caim aainstyou or the amount owed to them beore the proposa,minus any amount you paid them durin the proposa.I you were bankrupt when the proposa was madeand then your proposa is subsequenty annued ordeemed annued, you wi be considered bankrupt onthe date o the annument.

Administrators o consumer proposas are iven

discretion to revive a consumer proposa that woudotherwise be deemed annulled. In act, administratorscan rectiy the deaut by providin notice to thecreditors. It is especiay benecia in situationswhere the debtor aces a temprary probem meetinpayments, or exampe, due to iness or temporaryunempoyment, but otherwise is makin ood aitheorts to compy with the terms o the proposa.Aso, courts have the power to make an order revivina consumer proposa on any terms the court considers

appropriate.

Does it cost anything to make a proposal?

Yes. There is a in ee to be paid to the Superintendento Bankruptcy. In addition, the administrator is entitedto be paid. These ees are prescribed by the Bankruptcyand Insolvency Rules, which may be consuted on theOSBs website at: osb.ic.c.ca.

BankruptCy

What is bankruptcy and what are thebenets to the debtor?

Bankruptcy is a ea process, reuated by the Act,by which you may be dischared rom most o yourdebts. The purpose o the Act is to permit an honest,but unortunate, debtor to obtain a dischare rom hisor her debts, subject to reasonabe conditions.

When you decare bankruptcy, your assets are ivento a trustee in bankruptcy who then ses them and

distributes the money amon your creditors. Once youdecare bankruptcy, your unsecured creditors wi notbe abe to take ea steps to recover their debts romyou (such as seizin assets or arnisheein waes).

It is aso possibe to e a joint assinment. A jointassinment aows two bankrupts, invoved in a cosenancia reationship, to e or bankruptcy toetherand to see their assets combined and their es deatwith as one e. This is avaiabe to debtors i their debtsare substantiay the same and the trustee beieves it is

in the best interest o the debtors and creditors.

What are the duties of a bankrupt?

Once you are eay a bankrupt, you are required toperorm the duties o bankrupts as outined in Appendix I,which beins on pae 29. The trustee wi inorm youo these duties.


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How does one declare bankruptcy?

First, you meet with a trustee in bankruptcy who wiassess your nancia situation and expain the options

avaiabe to you as described earier. I you decide todecare bankruptcy, the trustee wi hep you competesevera orms that you wi have to sin. You areconsidered a bankrupt ony when the trustee esthese orms with the Ocia Receiver.

What kind of forms will I have to sign?

You wi have to sin at east two orms. One is anAssinment and the other is your Statement o Aairs. In the assinment you state that you are

handin over a o your assets to the trustee or thebenet o your creditors. In the statement o aairsyou ist your assets, iabiities, income and expenses. As we, you wi have to answer severa questionsabout your amiy, your empoyment and the dispos-ition o your assets.

Beore you sin the orms, make sure you understandthese ea documents that become part o your bank-ruptcy e. Athouh the trustee prepares them romthe inormation you provide, they are your statements.

You are responsibe or the accuracy o their contents.Review them careuy beore you sin. Once thesedocuments have been ed with and accepted by theOcia Receiver, you become eay bankrupt and, atthis point, the process cannot be reversed without acourt order. Keep copies o notices and a other docu-ments the trustee sends you.

What happens after the forms areled with and accepted by the OfcialReceiver and I become bankrupt?

generay, a meetin o creditors is not necessary butthere may be instances where such a meetin wi behed. Creditors or the Ocia Receiver may requestone. I a meetin o creditors is caed, you must attendthis meetin. You may aso be required to o to theOcia Receivers oce to answer severa questionsunder oath about your nancia aairs.

What happens at the rst meetingof creditors?

I a meetin is caed, the trustee wi ive a reportabout your assets and iabiities and the creditors mayask you questions reated to your nancia e. Thecreditors wi then vote to either conrm the trusteesappointment, or substitute a trustee o their choice.The creditors wi then have an opportunity to vote orthe appointment o inspectors. They may aso ivedirections to the trustee reated to the administrationo the estate.

What does the examination with theOfcial Receiver involve?

The Ocia Receiver may send you a notice instructinyou to appear beore him or her or an examinationunder oath. The Ocia Receiver wi then ask you anumber o questions about the causes o your bank-ruptcy, your conduct, the disposition o your assetsand the nature o your debts.


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How does bankruptcy affect employment?

For the most part, bankruptcy shoud not aect yourempoyment. However, there are some specia cases.

For exampe, you may have dicuty bein bonded.Your trustee wi be abe to ive you more inormationon other possibe restrictions or prohibitions.

Does it cost anything to go bankrupt?

Yes. There is a in ee to be paid to the Superintendento Bankruptcy. In addition, the trustee is entited to bepaid. These ees are prescribed by the Bankruptcyand Insolvency Rules, which may be consuted on theOSBs website at: osb.ic.c.ca.

appendIx I

Excerpts from the Bankruptcy andInsolvency Actconcerning bankruptcies

DUTIES OF BANKRUPTSection 158

A bankrupt sha

(a) make discovery o and deiver a his property thatis under his possession or contro to the trusteeor to any person authorized by the trustee to takepossession o it or any part thereo;

(a.1) in such circumstances as are specied indirectives o the Superintendent, deiver tothe trustee, or canceation, a credit cardsissued to and in the possession or contro othe bankrupt;

(b) deiver to the trustee a books, records, docu-ments, writins and papers incudin, withoutrestrictin the eneraity o the oreoin, titepapers, insurance poicies and tax records andreturns and copies thereo in any way reatin to

his property or aairs;(c) at such time and pace as may be xed by the

ocia receiver, attend beore the ocia receiveror beore any other ocia receiver deeated bythe ocia receiver or examination under oathwith respect to his conduct, the causes o hisbankruptcy and the disposition o his property;


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(d) within ve days oowin the bankruptcy, unessthe time is extended by the ocia receiver,prepare and submit to the trustee in quadrupi-cate a statement o the bankrupts aairs in theprescribed orm veried by adavit and showinthe particuars o the bankrupts assets andiabiities, the names and addresses o the bank-rupts creditors, the securities hed by themrespectivey, the dates when the securities wererespectivey iven and such urther or other inor-mation as may be required, but where the aairso the bankrupt are so invoved or compicatedthat the bankrupt aone cannot reasonaby preparea proper statement o aairs, the ocia receiver

may, as an expense o the administration o theestate, authorize the empoyment o a quaiedperson to assist in the preparation o the statement;

(e) make or ive a the assistance within his power tothe trustee in makin an inventory o his assets;

() make discosure to the trustee o a propertydisposed o within the period beinnin on theday that is one year beore the date o the initiabankruptcy event or beinnin on such otherantecedent date as the court may direct, and

endin on the date o the bankruptcy, both datesincuded, and how and to whom and or whatconsideration any part thereo was disposed oexcept such part as had been disposed o in theordinary manner o trade or used or reasonabepersona expenses;

() make discosure to the trustee o a propertydisposed o by it or settement without adequatevauabe consideration within the period beinninon the day that is ve years beore the date o the

initia bankruptcy event and endin on the date obankruptcy, both dates incuded;

(h) attend the rst meetin o his creditors unessprevented by sickness or other sucient causeand submit thereat to examination;

(i) when required, attend other meetins o his credit-ors or o the inspectors, or attend on the trustee;

(j) submit to such other examinations under oathwith respect to his property or aairs as required;

(k) aid to the utmost o his power in the reaization ohis property and the distribution o the proceedsamon his creditors;

() execute such powers o attorney, conveyances,deeds and instruments as may be required;

(m) examine the correctness o a proos o caimsed, i required by the trustee;

(n) in case any person has to his knowede ed a asecaim, discose the act immediatey to the trustee;

(n.1) inorm the trustee o any materia chane inthe bankrupts nancia situation;

(o) eneray do a such acts and thins in reationto his property and the distribution o the pro-ceeds amon his creditors as may be reasonabyrequired by the trustee, or may be prescribed

by the genera Rues, or may be directed by thecourt by any specia order made with reerenceto any particuar case or made on the occasiono any specia appication by the trustee, or anycreditor or person interested; and

(p) unti his appication or dischare has beendisposed o and the administration o the estatecompeted, keep the trustee advised at a timeso his pace o residence or address.


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BANKRUPTCY OFFENCESSection 198

1. Any bankrupt who

(a) makes any rauduent disposition o the bankruptsproperty beore or ater the date o the initiabankruptcy event,

(b) reuses or neects to answer uy and truthuya proper questions put to the bankrupt at anyexamination hed pursuant to this Act,

(c) makes a ase entry or knowiny makes a materiaomission in a statement or accountin,

(d) ater or within one year immediatey precedinthe date o the initia bankruptcy event, conceas,destroys, mutiates, asies, makes an omissionin or disposes o, or is privy to the conceament,destruction, mutiation, asication, omission romor disposition o, a book or document aectinor reatin to the bankrupts property or aairs,uness the bankrupt had no intent to concea thestate o the bankrupts aairs,

(e) ater or within one year immediatey precedinthe date o initia bankruptcy event, obtains anycredit or any property by ase representationsmade by the bankrupt or made by any other personto the bankrupts knowede,

() ater or within one year immediatey precedin thedate o the initia bankruptcy event, rauduentyconceas or removes any property o a vaue oty doars or more or any debt due to or romthe bankrupt, or

() ater or within one year immediatey precedin thedate o the initia bankruptcy event, hypothecates,pawns, pedes or disposes o any property thatthe bankrupt has obtained on credit and hasnot paid or, uness in the case o a trader thehypothecation, pawnin, pedin or disposinis in the ordinary way o trade and uness thebankrupt had no intent to deraud,

is uity o an oence and is iabe, on summaryconviction, to a ne not exceedin ve thousanddoars or to imprisonment or a term not exceedinone year or to both, or on conviction on indictment,to a ne not exceedin ten thousand doars or toimprisonment or a term not exceedin three years,

or to both.

2. A bankrupt who, without reasonabe cause, aisto compy with an order o the court made undersection 68 or to do any o the thins required othe bankrupt under section 158 is uity o anoence and is iabe

(a) on summary conviction, to a ne not exceedinve thousand doars or to imprisonment or aterm not exceedin one year, or to both; or

(b) on conviction on indictment, to a ne not exceedinten thousand doars or to imprisonment or a termnot exceedin three years, or to both.


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FAIlURE TO DISClOSE FACT OF BEINg UNDISCHARgEDSection 199

An undischared bankrupt who

(a) enaes in any trade or business without discos-in to a persons with whom the undischaredbankrupt enters into any business transaction thatthe undischared bankrupt is an undischaredbankrupt, or

(b) obtains credit to a tota o $1,000 or more romany person or persons without inormin them thatthe undischared bankrupt is an undischaredbankrupt,

is uity o an oence punishabe on summary convic-tion and is iabe to a ne not exceedin ve thousanddoars or to imprisonment or a term not exceedinone year, or to both.

appendIx II

Division Ofces of the Superintendentof Bankruptcy

nova sCotIa

Maritime Centre1505 Barrinton Street, 16th FoorHalifax, Nova Scotia B3J 3K5Te.: 902-426-2900 | Fax: 902-426-7275

QueBeC

1141, Route de ise, 4th FoorQubec, Quebec g1V 3W5Te.: 418-648-4280 | Fax: 418-648-4120

5 Pace Vie-Marie, Suite 800Montral, Quebec H3B 2g2Te.: 514-283-6192 | Fax: 514-283-9795

ontarIo

Pace Be Buidin160 Ein Street, 11th Foor, Suite B-100

Ottawa, Ontario K2P 2P7Te.: 613-995-2994 | Fax: 613-996-0949

25 St. Cair Avenue E, 6th FoorToronto, Ontario M4T 1M2Te.: 416-973-6486 | Fax: 416-973-7440

Federa Buidin55 Bay Street N, 9th FoorHamilton, Ontario l8R 3P7Te.: 905-572-2847 | Fax: 905-572-4066


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Federa Buidin451 Tabot Street, Suite 303London, Ontario N6A 5C9Te.: 519-645-4034 | Fax: 519-645-5139

ManItoBa

400 St. Mary Avenue, 4th FoorWinnipeg, Manitoba R3C 4K5Te.: 204-983-3229 | Fax: 204-983-8904

saskatChewan

1945 Hamiton Street, Suite 600Regina, Saskatchewan S4P 2C7Te.: 306-780-5391 | Fax: 306-780-6947

123 Second Avenue S, 7th FoorSaskatoon, Saskatchewan S7K 7E6Te.: 306-975-4298 | Fax: 306-975-5317

alBerta

Standard lie Tower639 Fith Avenue SW, Suite 510Calgary, Aberta T2P 0M9Te.: 403-292-5607 | Fax: 403-292-5188

Canada Pace Buidin9700 Jasper Avenue, Suite 725Edmonton, Aberta T5J 4C3Te.: 780-495-2476 | Fax: 780-495-2466

BrItIsh ColuMBIa

300 West georia Street, Suite 2000Vancouver, British Coumbia V6B 6E1Te.: 604-666-5007 | Fax: 604-666-4610

notes


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38 DEAlINg WITH DEBT

notes


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dealing with debt a consumer's guide

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