Answer: The Courts in Alberta generally have held that a motorhome or recreational trailer can be considered a residence if the arrangement is legitimate. The questions of relevance are; How long? Why don’t you have a typical home? Who owns it? What is it worth? Does it have a lien on it? How much equity do you have? etc.

Without further detail, it is difficult to give you absolute assurance that it will qualify as a residence and be exempt in a bankruptcy? Some may argue that a residence has to be stationary in order to qualify and residence exemptions vary by province. In Alberta every residence has an equity limit of $40,000.

Answer: The Bankruptcy Act provides each Province with the opportunity to set its own exemptions. The food exemption in Alberta comtemplates stored foods and I believe it dates back to when it was commonplace to grow a garden and can vegetables at the end of the growing season or to buy half a cow and freeze it.

There is no provision in the Bankruptcy Act or elsewhere to allow for a cash equivalent to fund future food purchases. Cash on hand would represent funds available to your creditors for distribution in your bankruptcy.

Answer: For many people, insolvency is a process whereby a persons finances get worse and worse over time. For most this involves a period of years. The test is not wether you knew you were going to go bankrupt but wether you ought to have know you were or would be unable to pay your bills.

Depending on the timing of the gift and your date of bankruptcy gifts to friends or relatives are presumed to be an attempt to compromise your creditors interests and spirit money away. Gifts to children months prior to a bankruptcy fall into this category of presumption. The rules were put into place because people were gifting money to family members that they couldn’t afford to gift and then going bankrupt. The fairness of the legislation, as do most rules depend on your perspective.

As well, I have been told that declaring bankruptcy prior to having a Separation Agreement in place is similar to dying intestate (where the province determines division and distribution of the deceased\’s assets according to set guidelines – regardless of whether this might have been the deceased\’s wishes). I have been given the impression that we would no longer have the opportunity to decide who amongst the spouses gets what assets, the Public Trustee now has that power(ie: who gets house vs RRSP assets vs non-registered assets, vs personal assets, etc). Is that correct?
Thank you.

Answer: A husband and wife are entitled to seperate exemptions i.e. a $5,000 car each, and furniture and personal effects X 2 or $8,000 for each category. The exemption in a residence is however different and limited to $40,000 divided amongst the owners of that residence i.e. 4 owners $10,000 each.

The exemption in a residence is determined by who owns it at the date of bankruptcy and wether you reside in it. A couple can be seperated and living apart without having an agreement in place. It all relates to ownership and wether you live in it at the date of bankruptcy. If you each own a home and you live apart in those homes, you each get an exemption for $40,000 in equity. That of course presumes that you are truly living apart and that you didn’t take or borrow money from your creditors to put the down payment on the homes when you knew you or ought to have know you were insolvent.

Your entitlement to an exemption is determined at the date of bankruptcy. Once bankrupt you are free to divide up your exempt property as you see fit. Many of our clients are in the process of getting seperated when they come to file bankruptcy with us and they finalize it after they file.

The Bankruptcy Trustee does not deal with your exempt property other than to give it back to you. With most, if not all, of your unsecured debts dischargeable in a bankruptcy the division of your exempt property gets much easier. If you cash in RRSP’s or change the status of your accounts prior to filing bankruptcy you may negate or compromise an exemption.

There are probably going to be some negatives either way, but the lack of specifics makes it difficult to speak to every scenario. We would be happy to sit down with you on a no obligation basis and discuss the details of your specific situation with you.

Answer: The Wage Earners Protection Act may protect you for a portion of your wages, if your employer goes bankrupt. Your provincial labour standards board can help you with the collection of unpaid salary or renumeration and or severance. It is important to retain copies of your letters, emails and NSF cheques and provide them with copies as support for your claim.

We have had clients in your exact situation. The debate is wether you go with the status quo, have a roof over your head and hope for the best or pack up and leave. If, as we suspect the lack of real wages has put you behind the eight ball and you don’t have the cash to put down a security deposit or pay your first months rent you have fewer options. There is a real risk that this will happen regardless. Doing nothing, is usualy not the right course of action. Contacting labour standards should be your first step, where you can seek confirmation of your rights in B.C.

Answer: In considering the timing, it is important to note that any agreement you arrive at with your spouse will not be binding on your creditors, and is binding only upon the two of you. If one or both of you go bankrupt after you sign the agreement, much of the agreement will be null and void as a bankruptcy assignment will negate that contract too. The portion that does survive relates primarily to maintenance and support.

If you transfer assets to each other, or others, for less than fair market value or for no consideration, and you are insolvent or facing a judgement that will make you insolvent, the division of property could be attacked by your creditors and overturned. In the majority of cases it is best to sort out your finances through a bankruptcy so that you know what debts will remain after a bankruptcy and which assets are not subject to claims by your creditors. This will allow you to deal with the real issues and avoid any speculation as to what your creditors may or may not do. We have seen a lot of people fight over assets, or the split of liabilities, only to find out that it was all irrelevant in the context of a bankruptcy. We would be happy to walk you through the do’s and don’ts.

As this answer has been given absent specific details from you, it is important to note that our answer may be different depending on the specifics of your situaion.

Answer: No, we have a number of clients who have relocated or moved after filing bankruptcy. We keep in touch with them and they complete most of their bankruptcy duties via mail and over the phone. If you relocate to a location where there are no local bankruptcy trustees we request approval from the Superintendent of Bankruptcy to do your counselling over the phone or make arrangements for you attend counselling sessions with a Trustee close to you.

It is important to note that the federal government lets each province regulate what their residents can keep if they go bankrupt. Alberta exemption legislation allows you to keep more property. You definitely want to consider filing bankruptcy before you relocate. Please do not hesitate to speak to us and we can provide you with more details.

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.

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.

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.