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Q:
Will it be possible to regain credit?
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A:
Many Credit Bureaus have a record
of bankruptcies for past years, and they will not offer credit
to previous bankrupts. However there are numerous strategies
available to help you rebuild your credit after you have been
discharged from bankruptcy. For example, a credit card
provider may allow you to provide a cash deposit. They will
hold this deposit to ensure purchase transactions are secure.
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Q:
Will my Husband/Wife take responsibility for my debts if I
become bankrupt? |
A:
Yes - if your spouse has signed a
guarantee or acknowledgement of responsibility form (with the
lending institute to whom you owe money) for use of credit in
your name.
No - if your
spouse has not signed a guarantee or acknowledgement of
responsibility form (with the lending institute to whom you
owe money) for use of credit in your name.
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| Q:
My legal guardian co-signed for my car loan. Will my legal
guardian be responsible for my debt if I become bankrupt? |
A:
Yes, unless there is a security
behind the loan that will pay off the loan when liquidated, or
if you continue to pay, for example a secured auto loan.
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| Q:
Are any of my assets safe from my creditors? |
A:
Yes, the chart below shows the
exemption amounts for British Columbia.
Equity in a home
in Greater Vancouver or Victoria: $12,000
Equity in a home not in Greater Vancouver or Victoria: $9,000
Equity in Household Items: $4,000
Equity in a Vehicle: $5,000
Equity in a Vehicle if the debtor is behind on Child Care
Payments: $2,000
Equity in work tools: $10,000
Equity in essential clothing and medical aids: Unlimited
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| Q:
When I am bankrupt can I still operate my business? |
A:
Yes, but you cannot be a director
of a corporation while you are bankrupt. You must remit
quarterly installments to Canada Customs and Revenue Agency if
you are self employed. You must disclose to any prospective
creditor that you are a bankrupt before you request credit in
your personal capacity while you are bankrupt.
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Q:
Is my RRSP affected when I
file an assignment?
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A:
If your RRSP is accessible by
yourself then it is accessible to your creditors. If it is
possible to be cashed in then the Trustee will do so. However,
some RRSP's that are administrated by a life insurance company
are not available to the Trustee. The Trustee will most likely
request that you make a contribution to the creditors. On the
other hand the Trustee may seek to obtain a conditional
discharge order requiring that you make a contribution.
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| Q:
Are student loans covered by
bankruptcy? |
A:
If the student loans are more
than ten years old from the date of the bankruptcy then they
are discharged. If they are not more than ten years old then
the student loan will not be discharged. After ten years has
passed since being a student, and if the bankruptcy has been
discharged, a Court can order the discharge of a student loan
at any time.
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| Q:
Which debts are not
discharged by bankruptcy? |
A:
Additional debts that are not
released are those resulting from:
•Damages from
civil proceedings related to bodily harm intentionally
inflicted, sexual assault or wrongful death.
•Court
imposed fines, penalties and restitution orders
•Any debt or
liability for alimony or support for children or a spouse
living separate from you.
•Any debt or
liability arising from fraud, embezzlement or misappropriation
or defalcation while acting in a fiduciary capacity.
•Any debt or
liability for obtaining property by false pretences or
fraudulent misrepresentation.
•The dividend
a creditor would be entitled to as a result of a bankrupt not
disclosing a debt to the trustee.
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| Q:
Can Canada Customs and
Revenue Agency (CCRA), (formerly Revenue Canada), claim a
security interest over you that effectively requires you to pay
them, even if it is for a pre-bankruptcy debt, including
director's liability for source deductions? |
A:
Yes, they can. Canada Customs and
Revenue Agency (formerly Revenue Canada) are now arguing that
they may assert such a priority for any personal bankruptcy
from June 18, 1998, for any debt due including for director's
liability for source deductions, under certain conditions.
Before doing so, CCRA must obtain a judgment and register it
against you. This is a contentious area and may be subject to
challenge in the courts.
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