Financial resources curated by our team, with clarity and your needs in mind
The Office of the Superintendent of Bankruptcy has developed modules dealing with Budgeting, Goal Setting, Spending Habits and Responsible Use of Credit, that may be of assistance to you in rebuilding your financial future.
The website of Prosper Canada is a good tool to find all the government benefits that you may be entitled to. It provides information on each program, its eligibility requirements, and the application procedure.
Options you can trust to help you with your debt. From the Office of the Superintendent of Bankruptcy Canada:
Find housing, mental health, food support services, recreational services, and education services in Alberta at:
Will I lose my assets, such as a house or vehicle?
You do not have to give up any assets, unless you want to.
If there is equity in excess of the exemption provided for under the Civil Enforcement Act of Alberta, then
arrangements can be made with the Trustee to pay that amount into the Estate for the benefit of your creditors.
If there is a mortgage outstanding on your property or the asset in question is secured by a loan registered in the proper registry, then if you’re going to retain the asset, you must continue to pay for the mortgage and the loan payments.
How does the Trustee get paid?
The Trustee in a bankruptcy is paid based on a tariff established in the Bankruptcy and Insolvency Act.
How much do I pay in a Bankruptcy?
The amount that you will pay in a bankruptcy will vary based on the amount of equity you may have in your assets that are not exempt by way of an exemption, and the amount of your average net take home pay that exceeds the low income threshold that is established by the Government of Canada each year. The Trustee will review this with you during your consultation.
How does the Administrator get paid in a Consumer Proposal?
The Administrator in a Consumer Proposal is paid based on a tariff established in the Bankruptcy and Insolvency Act.
How much do I pay in a Consumer Proposal?
The amount that you will pay in a Consumer Proposal will vary based on the amount of equity you may have in your assets that is not exempt by way of an exemption, and the amount of your average net take home pay that may exceed the low income threshold that is established by the Government of Canada each year.
The Consumer Proposal will offer a better return to the unsecured creditors than what they would receive in a bankruptcy.
How are my assets treated in a Consumer Proposal?
Unlike a bankruptcy where your assets vest with the Trustee, your assets do not vest with the Administrator of a Consumer Proposal. You remain in possession of your assets.
What is counselling all about?
The Bankruptcy and Insolvency Act mandates that anyone who files a bankruptcy or a Consumer Proposal must attend two mandatory counselling sessions. The counselling sessions are meant to give you additional information on your journey in repairing your financial future.
What are the exemptions permitted in Alberta?
The Civil Enforcement Act of Alberta sets out the exemptions permitted as follows:
- Food required by you and your dependents for the next 12 months.
- Clothing required by you and your dependents up to a value of $4,000.
- Household furnishings and appliances up to a value of $4,000.
- One motor vehicle not exceeding $5,000 of equity.
- Medical and dental aids required by you and your dependents.
- RRSPs, RRIFs, LIFs and RESPs.
- Pension plans.
- Life insurance policies where the beneficiary is a spouse, child, grandchild or parent of the policy holder.
- Personal property that you require to earn income from your occupation up to a value of $10,000 (i.e., Tools of Trade).
- Equity in your principal owner occupied residence up to $40,000. If there is more than one
owner of the property, then the exemption is shared on a pro-rata basis to their percentage ownership.
- Social allowances, handicap benefits or widow’s pension if the proceeds of which are not intermingled with other funds.
- If you are a bona fide farmer and your principal source of income is from farming, the exemption is for 160 acres if your principal residence is located on that 160 acres and the 160 acres is part of your farm. In addition, the personal property required for the proper and efficient conduct of your farming operation for the next 12 months is also exempt.
Incorporated self-employed individuals
What we often see are individuals that have been working in their field of trade quite successfully as a sub-contractor to a contractor or company, who requires that the individual invoice for their services through
their own company. The contracting company does this in order to avoid having the individual on the payroll as an employee, thereby avoiding all the responsibilities that an employer has to an employee such as the withholding of income tax, CPP and EI from their earned wages.
What traditionally happens is that the individual has little to no understanding of what it means to earn the income through their own company. They often fail to remit the required GST and source deductions on
income they take out of their company, fail to pay the corporate income taxes on the company’s earnings, and fail to file corporate income tax and GST returns. When proper year end financial statements are prepared, the bookkeeper/accountant will issue a dividend to clear out the amount of funds that the individual has taken out of the company. This then allows Canada Revenue Agency to pursue the individual for the company’s income taxes that were not remitted to the extent that they received a dividend.
If you find yourself in this situation, give us a call. We can help.
Can amounts owing to the Canada Revenue Agency be included in a bankruptcy or Consumer Proposal?
Yes. Amounts owing to the Canada Revenue Agency (CRA) for unpaid personal income taxes, unpaid Goods and Services Taxes (GST), unpaid employee source deductions, and other amounts owing to the CRA can be included in your bankruptcy and/or Consumer Proposal.