Bankruptcy Alberta

personal income tax

2010-03-08T21:05:00.004-06:00

Question: Can u claim personal income tax owing if you go bankrupt?

Answer: Yes, personal income taxes are in most cases dischargeable or forgiveable in a bankruptcy. It is important that you do not fall behind on your taxes while bankrupt as a failure to pay taxes while in bankruptcy will negatively impact your discharge and your eligibility for forgiveness of the pre bankruptcy balances. As long as you pay your taxes on a go forward basis you should not have a problem.

Selling home

2010-03-08T15:19:00.004-06:00

Question: I have a quetion about selling my home before filling for bankruptcy. My home is currently worth $300000 and my oustanding mortgage is $195000. I have had an offer of $250000 as is and I am considering selling it so I don't have to worry about forclosure. How would this be seen in the eyes of the Trustee? Am I allowed to sell this low and then file for bankruptcy? Is there any law against selling below fair market value.

Answer: Based on the information you have provided you have $105,000 in home equity. In Alberta you can keep equity of up to $40,000 in a principal residence. If you sell the residence for $50,000 below market the portion available to your creditors will be reduced to $15,000 and it will raise a lot of questions as to why you sold so low and wether you compromised your creditors rights.

It would be better to surrender your house to the bankruptcy Trustee who will sell the house and give you your $40,000. This will eliminate any concerns about what you did or did not do and who was affected by the sale.

Spousal Support

2010-02-11T15:52:00.009-06:00

Questions: How does spousal support affect bankruptcy?

Answer: Spousal support is treated differently from most other debts in a bankruptcy. Amounts for spousal arrears, if any are a debt that survives a bankruptcy discharge and must be paid.

Payments to one's bankruptcy estate are based on a person's net income and spousal support paid while in bankruptcy is an allowable deduction from your net income. Spousal support payments will reduce the amount you have to pay into your bankruptcy. Similarily if you are receiving spousal support you will have to add these amounts to your income for bankruptcy purposes.

Vacations while Bankrupt

2010-02-11T15:50:00.007-06:00

Questions: Can you still book and take vacations while filing for bankruptcy?

Answer: A bankruptcy does not preclude you from undertaking your regular activities. You can continue to take vacations subject to your own budget constraints. As you are not suppoed to use credit while bankrupt it may be difficult to book flights, rental cars or hotels without a credit card.

Depending on your income you may also be required to share some of it with your creditors and make payments to your bankruptcy estate. Be sure to meet those requirements before you spend funds on a vacation and get caught on your bankruptcy obligations.

U S debts

2010-02-09T18:11:00.005-06:00

Question: I am a U.S. citizen and moved to Red Deer with my husband who got a transfer back to Canada. The company I worked for in Texas went bankrupt seven months ago and I can't work in Canada until I apply with imigration and get approved.

This is going to take several months and we are majorly behind on our credit cards. Does a bankruptcy in Canada help us? If so can we file bankruptcy here in Red Deer?

Answer: A bankruptcy in Canada relieves you of any obligation to pay while you are in Canada and U.S. creditors are prevented from enforcing these debts in Canada.

Depending on when you return to the U.S. the rights of the U.S. creditors are not affected by your Canadian bankruptcy and they may resume collection. There may be statute of limitation laws however and these vary by state.

Our Red Deer Trustees would be happy to discuss your situation in more detail and provide you with further feedback. Our bankruptcy services are available in Red Deer.

Bankruptcy in Grande Prairie

2010-02-08T16:57:00.004-06:00

Question: We recently moved to Grande Prairie from Nova Scotia to find work after being unempolyed for almost a year. We are so far behind and the moving expenses killed us.

Our friends say we can't file bankruptcy in Grande Prairie until we have been here a year. Do we have to wait? My husband has a new job and the creditors are threatening to serve papers and garnish wages. They have spoken to his Grande Prairie boss and we don't want it to affect his new job.

Answer: In order to file bankruptcy in Grande Prairie you must reside in Alberta or have carried on business in, or your assets must be located in Alberta. Assuming you have completed your move and have established a residence in Alberta there is no probition against filing in Grande Prairie. One of our Bankruptcy Trustees in Grande Prairie would be happy to meet with you on a no obligation basis and review your options with you free of charge.

Co-signer on a Loan

2010-02-08T12:25:00.005-06:00

Question: If I have a co-signer on a loan. and we both agree on bankruptcy, how will this effect the other person. the co signer

Answer: If both the co-signer and you are going bankrupt then the debt will be covered by the bankruptcy. However, if the co-signer is not filing a bankruptcy they will be responsible for payment of the entire debt in your place.

Revenue Canada Debt

2010-01-23T22:51:00.005-06:00

Question: If I owe revenue canada penalties and interest and/or back income tax, can I claim in bankruptcy

Answer: Generaly in Canada income tax debts including penalties and interest, unless they originate as a result of filing false tax returns are debts discharged or forgiven in a bankruptcy.

In the case of second or subsequent bankruptcies the Courts will want to know how big a factor Revenue Canada played in the prior bankruptcies. If a person is going bankrupt for a second time and amounts owed to Revenue Canada are significant both times, they will want to ensure you are tax compliant and are paying all taxes on a current basis. In cases such as these the Courts will want proof from Revenue Canada that all tax filings and tax payments are up to date before they will consider a bankruptcy discharge.

Unemployed

2009-11-26T10:13:00.002-06:00

If you lose your job and are unable to pat any amount due to no income does a person lose pay when they obtain work again after bankruptcy?

rrsps

2009-11-12T17:23:00.003-06:00

Are RRSP's protected if I go bankrupt??

JR

2009-10-28T10:18:00.002-05:00

We have a vehicle loan with the maker of our car and it is secured by the vehicle. If we stop payments and offer to return the car, will the loan still be payable?

Cost for business bankrupcy

2009-10-26T13:53:00.002-05:00

I have been trying to do an orderly shutdown of my business, however my landlord is not willing to negotiate a settlement of any type.

What is the cost to file corporate bankrupcy in Alberta? (or the cost-range).

Income of 4 and bankruptcy in Canada

2009-10-21T16:00:00.004-05:00

Question: How much can a family of 4 make with going bankrupt in Canada? 2 adults 2 kids

Answer: In Alberta, or anywhere in Canada, a family of four is permitted to have net income each month of $3,474. If your family income exceeds that amount, you have surplus income, and you are required to pay half of your surplus income into your bankruptcy estate.

For example, if the net family income was $3,874, you are $400 over the limit, so that month you would be required to make a surplus income payment of $200.

Your Alberta bankruptcy trustee can provide you with more details.

disability pensions as monthly income

2009-09-26T10:49:00.002-05:00

Thanks to the economic meltdown our retirement investments are in bankruptcy. Trustees tell us we should only count on 5% (so that would be $19,000 instead of our savings of $400,000) AND we shouldn\'t think about receiving it for at least 2 years.

My wife and I are on disability pensions. This is our sole income at $4000 per month. Neither of us can take on a simple job. Together we can help each other. Our house and lot has substantial equity but over the past 15 years we spent over $120,000 to equip it for our disabilities. A realtor said the lot has substantial value ($125,000) but the house is ONLY of value to the disabled ... Demolish the house and sell the lot! We would be homeless. We are financially tight but can live independently if we can stay in the house.

The monthly revenue stream from the investments is gone. We owe about $37,000 - payments were covered by the revenue stream - & that\'s gone!

If we go bankrupt, is any part of our disability pension taken by the trustee? You can have the 5% promise from the investments, but the pensions allow us to stay in our home. The pensions could never support us outside of this property - the $ from the land sale alone could never equip another place for us.
Thanks!

income

2009-09-24T18:40:00.002-05:00

How much is a family of three allowed to make a month while in bankruptcy?

How does bankruptcy effect my LIRA?

2009-09-22T15:41:00.002-05:00

Will I lose the money in my Locked in Retirement account if I declare bankruptcy? and if not can I transfer it from one bank to another bank while in bankruptcy?

Leasing a Vehicle

2009-09-10T21:38:00.003-05:00

If I file a consumer proposal or bankruptcy, does this mean I lose access to my vehicle too? I currently lease my vehicle.

house

2009-09-08T16:48:00.002-05:00

Can they take your house? Why and how?

Garnishments without bankruptcy

2009-08-30T10:40:00.003-05:00

Does the law in AB require that the employee be notified prior to a Garnishment being placed on his/her wages? what if no bankruptcy has been filed by the employee? Must a Garnishment Order be submitted for each separate pay period or can a \"blanket\" Garnishment be filed? How can an employee avoid having his/her wages garnished, other than quitting work?

Home after bank ruptcy

2009-08-24T00:58:00.002-05:00

Can I buy the home after discharge from bankruptcy...I saw on home that is Condo and very small near to my rent...

bankruptcy on debts

2009-07-30T12:30:00.002-05:00

If you declare bankruptcy do you still have to pay the debts off,or not. Are you free and clear.

Bankruptcy

2009-07-22T14:22:00.002-05:00

If you file for bankreuptcy, do you lose your old age, cpp and past employment pension. Also, if you have a term life insurance policy, can you keep it.

BMO assumable policy change.

2009-07-22T00:11:00.003-05:00

when did BMO change their policy on assumables. When was the last date that it was still legal to assume a mortgage?

Bankruptsy

2009-07-20T21:05:00.003-05:00

Do you still get your old age and CPP pensions if you go bankrupt.

GST Credit

2009-07-14T02:29:00.003-05:00

I am quite confused. The GST credit is not considered property of the bankruptcy estate, and it is listed as federally exempt property as essential to the living needs of individuals, yet our trustee tells us that we will not recieve it. Please explain this for me.