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FAQ
Frequently Asked Questions
Contents
Please - Stop the Garnishee!
In order to garnishee someone, a creditor such as a bank or charge card company must have a judgment against that person. Judgments are a court order to repay a debt. Judgments are not granted without you being given an opportunity to defend yourself. If receive a Notice of Claim and you do not file a defense and the court will grant a judgment and it is difficult to reverse the process. Exercise your rights before you lose them!
Creditors such as Canada Revenue Agency (income tax, GST, payroll remittances) can garnishee without a court order, they can attach bank accounts, wages, accounts receivable and some assets. Other government agencies that can garnishee without a court order such as medical service plan, student loans and employment insurance.
The registering of proposal or bankruptcy will stop your garnishee. We are here to help you get the garnishee stopped.
We cannot assist with a garnishee for Family Maintenance Enforcement Program as that debt must be paid whether you file a proposal or a bankruptcy.
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The bank can take your money.
If you have a bank account with a bank of which you hold loan, charge card or line of credit and you are in arrears, the bank can cease all your funds in your bank account without your permission. Please ask us questions if you are concerned about this topic.
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Student Loan.
Interest rates for student loans have dropped significantly in past years. If you are currently paying back student loans, you have probably received several phone calls, letters or emails about consolidating those loans under one lender or servicer. We are here to provide you with the information you need to understand consolidation and make the best choice for you. Because we are not a lender, we can be impartial.
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Your responsibilities while bankrupt:
- Disclose all assets and liabilities
- Destroy all credit cards
- Attend 2 mandatory credit counselling meetings
- Attend first meeting of creditors, if requested
- File monthly income and expense reports
- Make monthly payments and surplus income payments, in accordance with standards established by the Superintendent of Bankruptcy
- Provide income tax information and refunds for outstanding prior years and year of bankruptcy.
- Advise the Trustee of material changes in your situation while in bankruptcy
In rare cases, the creditors may request a formal meeting for questions. The meeting is conducted in a professional manner and the purpose is to review material and information relative to the bankruptcy.
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Budgeting and Counselling sessions
Every bankrupt must attend two counselling sessions with a qualified counselor. The sessions are one-on-one and focus on the reasons for your insolvency and the road to rehabilitation to who will assist you to regain control over your financial situation.
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My Money- My Pay Cheque - Then What?
You may be required to make a payment of surplus income to the trustee. Each individual's situation is different and we will advise you prior to the bankruptcy as to the payments required.
Some assets may need to be sold by the trustee for the benefit of your creditors or as an elective to pay the trustee. We have the details - just call.
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What is the process?
Call our Kelowna office at (250) 717-0222 or 1-866-717-0222 or our Kamloops office at (250) 377-3255 or 1-866-900-4740 to arrange for an interview to discuss your options and have your rights and asset entitlement explained.
Costs:
- The fee to register a 1st bankruptcy with the Office of the Superintendent of Bankruptcy is $75
- The disbursement for photocopying and postage is $100, plus applicable GST
- The two mandatory counselling sessions are $85 each plus applicable GST
- The Trustee cost is $1,156 plus applicable GST
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Please stop the creditors!
Creditors must stop all legal action and all telephone calls against a person who has filed for protection under a proposal or bankruptcy. You will receive peace of mind!
If this is your first bankruptcy, you are eligible for an automatic discharge in nine months if you have completed all your responsibilities and there is no objection by the Trustee, Creditors or Superintendent of Bankruptcy. The Court will review objections if any are filed, give you and your creditors an opportunity to defend your position and decide the terms of your discharge.
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In BC, what assets can I keep?
In British Columbia , by Provincial Legislation a bankrupt person can retain:
- Household Goods up to $4,000 (based on a quick sale, prices do not reflect replacement costs)
- Occupied residence equity (up to $9,000 outside of Victoria/Vancouver)
- Clothing
- Tools and equipment for self employment to $10,000
- A vehicle valued up to $5,000 (less if FMEP debt)
- Certain life insurance policies and RRSP's
Bankruptcy does not prevent the actions of a secured creditor. If you want to keep an asset pledged as security for a debt, you must make payment arrangements with the secured creditor.
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Creditors that are not affected by your bankruptcy:
- Secured creditors - you may continue making payments
- Court fines, penalties and restitution orders
- Alimony and maintenance payments
- Student loans if you ceased to be a student less than 10 years ago
- Debts from intended bodily harm
- Debts resulting from fraud, embezzlement or misrepresentation
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Credit Bureau Reports
The two major credit reporting agencies are EQUIFAX and TRANS UNION. Most credit granters use both.
These agencies do not give you a "Credit Rating" They only report your credit history and your creditor's assessment of your record with them.
Since lenders use your credit file as a decision making tool, it is important that your file is accurate and complete. You can review your file at any time. If you notice errors on your file you should advise the Bureau in writing so they can be corrected.
Trustees do not report to or have access to Credit Bureau information.
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How does the credit bureau obtain their information?
Information is received from four major sources:
- Information you supply on a credit application or when you open a new bank account
- Public records relating to Court Judgments, Foreclosures, Bankruptcies, Chattel Mortgages and Conditional Sales Agreements that are registered with the Provincial Government
- Major credit grantors and collection agencies
- Credit applications that are refused
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What does your credit rating mean?
Your credit rating is based on how you pay your debts.
- - To new to rate
- - Pays account as agreed
- - Pays over 30 days, but less than 60, only one payment past due
- - Pays over 60 days but less than 90, only 2 payments past due
- - Pays over 90 days, but less than 120, three or more payments past due
- - Account is at least 12 days overdue, but is not yet rated as bad debt.
- - This code is not used
- - Making regular payments under a consolidation order (Orderly Payment of Debts), consumer proposal or similar arrangement, dealing with a credit counselling agency. Note that a consumer proposal and the arrangements with a credit counselling agency have the same rating BUT the consumer proposal has more protection for the individuals such as stopping garnishees.
- - Repossession, foreclosure or voluntary return of asset by the consumer
- - BAD DEBT - placed with a collection agency; unable to locate; or sought protection under the Bankruptcy and Insolvency Act
In most cases negative information on your credit file will remain for seven years. But you can start to rebuild your credit rating long before the seven years are up.
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