Role Of The Case Trustee
When a chapter 7 petition is filed, the U.S. trustee appoints an impartial case trustee to administer the case and liquidate the debtor’s nonexempt assets. 11 U.S.C. §§ 701, 704. If all the debtor’s assets are exempt or subject to valid liens, the trustee will normally file a “no asset” report with the court, and there will be no distribution to unsecured creditors. Most chapter 7 cases involving individual debtors are no asset cases. But if the case appears to be an “asset” case at the outset, unsecured creditors must file their claims with the court within 90 days after the first date set for the meeting of creditors. Fed. R. Bankr. P. 3002. A governmental unit, however, has 180 days from the date the case is filed to file a claim. 11 U.S.C. § 502. In the typical no asset chapter 7 case, there is no need for creditors to file proofs of claim because there will be no distribution. If the trustee later recovers assets for distribution to unsecured creditors, the Bankruptcy Court will provide notice to creditors and will allow additional time to file proofs of claim. Although a secured creditor does not need to file a proof of claim in a chapter 7 case to preserve its security interest or lien, there may be other reasons to file a claim. A creditor in a chapter 7 case who has a lien on the debtor’s property should consult an attorney for advice.
Stop A Foreclosure Repossession Or Eviction
The automatic stay will stop these actions as long as they’re still pending. Once complete, bankruptcy won’t help.
- Evictions. An eviction that’s still in the litigation process will come to a halt after a bankruptcy filing. But the stay will likely be temporary. Keep in mind that if your landlord already has an eviction judgment against you, bankruptcy won’t help in the majority of states. Learn more about evictions and the automatic stay.
- Foreclosure and repossession. Although the automatic stay will stop a foreclosure or repossession, filing for Chapter 7 won’t help you keep the property. If you can’t bring the account current, you’ll lose the house or car once the stay lifts. By contrast, Chapter 13 has a mechanism that will allow you to catch up on past payments so you can keep the asset. Find out more about bankruptcy’s automatic stay and foreclosure and car repossession and bankruptcy.
Can You Keep Your Car If You File For Bankruptcy
Most provincial regulations include an exemption for some or all of the value of your car, especially if it is needed for your occupation. If you are making payments on your car, retaining the car will depend partly on whether you can continue the payments. A Licensed Insolvency Trustee can explain how the regulations will apply to your specific situation.
Provincial exemptions for homes and cars can be confusing, especially when considering mortgages and leases. A Licensed Insolvency Trustee will gladly help you learn how these assets would be affected in a bankruptcy. Your conversation is confidential and you are under no obligation. Contact a Trustee today!
Bankruptcy Exemptions by Province and Territory
- The exemption lists we provide below are simplified summaries of the law
- Even where there is no dollar limit, exemptions are limited to what you and your dependants really need
- The provinces often adjust the exemptions for various reasons, such as inflation
For interpretation of the rules in your case, we strongly recommend that you contact a Licensed Insolvency Trustee to review your situation and determine which of your assets will be exempt if you file for bankruptcy. You should be completely clear on what you can keep if you go bankrupt in Canada, versus what you may lose.
Please choose your province or territory:
Exemptions For Your Home
In British Columbia, homeowners exemptions are higher if you live in Vancouver or Victoria. In this case, $12,000 of the equity in your home is protected in Greater Vancouver and the Victoria capital area. Elsewhere in the province, $9,000 in home equity is exempt from bankruptcy. For more information on bankruptcy exemptions in British Columbia, speak to a local Licensed Insolvency Trustee.
Manitoba bankruptcy exemptions
In Manitoba, property exempt from seizure in bankruptcy is set by the provincial government and applies to the equity in an asset. Equity is the difference between the value of the asset and what you owe on the asset.
Example: If you have a car worth $8,000 and you still owe $5,000 on the loan, the equity you have in the car is $3,000. In Manitoba, the exemption for a car is $3,000. In this case, you would be able to keep the equity in your car your unsecured creditors cannot take this from you when you file for bankruptcy.
Can Bankruptcy Stop The Cra Collection Process
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Being in debt to the Canada Revenue Agency can be unnerving. The CRA has strong collection powers under the Income Tax Act and the Excise Tax Act so its important to know what you can do if you owe money to the CRA and you have received any form of notification as part of the Canada Revenue collections process.
In this article we look at how CRA can attempt to collect on unpaid tax and other government obligations, what specific debt collection and seizure powers the Canada Revenue Agency possesses and what your remedies are in dealing with CRA collections as well as some tax debt relief options.
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What Bankruptcy Can’t Do
Bankruptcy doesn’t cure all debt problems. Here’s what it can’t do for you.
Prevent a secured creditor from foreclosing or repossessing property you can’t afford. A bankruptcy discharge eliminates debts, but it doesn’t eliminate liens. A lien allows the lender to take property, sell it at auction, and apply the proceeds to a loan balance. The lien stays on the property until the debt gets paid. If you have a secured debta debt where the creditor has a lien on your propertybankruptcy can eliminate your obligation to pay the debt. However, it won’t take the lien off the propertythe creditor can still recover the collateral. For example, if you file for Chapter 7, you can wipe out a home mortgage. But the lender’s lien will remain on the home. As long as the mortgage remains unpaid, the lender can exercise its lien rights to foreclose on the house once the automatic stay lifts.
Eliminate child support and alimony obligations. Child support and alimony obligations survive bankruptcy, so you’ll continue to owe these debts in full, just as if you had never filed for bankruptcy. And if you use Chapter 13, you’ll have to pay these debts in full through your plan.
Eliminate most tax debts. Eliminating tax debt in bankruptcy isn’t easy, but it’s sometimes possible for older unpaid tax debts. Learn what’s needed to eliminate tax debts in bankruptcy.
Eliminate other nondischargeable debts. The following debts aren’t dischargeable under either chapter:
The Waiting Periods Between Bankruptcies
The type of consumer bankruptcy you file shapes how you get a discharge in the first case and how long you must wait after the first or previous case to file a second one and get a second discharge.
Specifically, and assuming you got a bankruptcy discharge in the first case, the time you must wait depends on your original filing date.
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When You Can Discharge Tax Debt
If you need to discharge tax debts, Chapter 7 bankruptcy will be the better optionbut only if the tax debt qualifies for discharge and you’re eligible for Chapter 7 bankruptcy. All of these conditions must be met before you can discharge federal income taxes in Chapter 7 bankruptcy:
- The taxes are income taxes. Taxes other than income, such as payroll taxes or fraud penalties, can never be eliminated in bankruptcy.
- You did not commit fraud or willful evasion. If you filed a fraudulent tax return or otherwise willfully attempted to evade paying taxes, such as using a false Social Security number on your tax return, bankruptcy can’t help.
- The debt is at least three years old. The tax return must have been originally due at least three years before filing for bankruptcy.
- You filed a tax return. You must have filed a tax return for the debt you wish to discharge at least two years before filing for bankruptcy. , you have not filed a “return” and cannot discharge the tax. In some courts, you can discharge tax debt that is the subject of a late return as long as you meet the other criteria.)
- You pass the “240-day rule.” The IRS must have assessed the income tax debt at least 240 days before you file your bankruptcy petition, or not at all.
Lottery Winnings Or Inheritances
If you win the lottery or receive an inheritance after youve filed, but before youve been discharged from bankruptcy, that money must be given to the LIT, who will distribute it to your creditors. If the amount youve received is greater than the debts you owed, you can keep whats left after your creditors have been paid off.
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Personal Property Tax In A St Louis Bankruptcy
When you own an automobile, the county in which you live will assess a yearly tax against that personal property. The amount that is required to be paid each year is determined by what type of car it is, and the age of the car. In order to ensure payments on this kind of tax debt, the government will not issue up-to-date license plates for the vehicle until the personal property tax is paid in full.
Unfortunately, this type of debt cannot be discharged in a St. Louis bankruptcy. However, if you file a St. Louis Chapter 13 bankruptcy, you will have the ability to pay back the personal property taxes over the course of three to five years. Spreading the payments over a longer period of time is often less of a financial burden. In addition, the government will issue new license plates once the Missouri Chapter 13 is filed, because they are put on notice that the debt will be paid off inside the payment plan.
If a St. Louis Chapter 7 bankruptcy is filed, all of your unsecured debt is discharged . Once these other debts are gotten rid of through the discharge, it is usually much easier to make payments on the tax debt that remains.
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Tax Returns And Chapter 13 Bankruptcy
You must be up to date on your tax returns before you file a Chapter 13 case, but the rules allow you a little wiggle room. You’ll provide copies of the returns for the previous four tax years to the Chapter 13 trustee before the 341 meeting of creditors . If you’re not required to file a return, your trustee might ask for a letter, an affidavit, or a certification explaining why. Sometimes local courts will impose additional rules for documents in their districts.
If you owe the IRS a return but don’t file it before your 341 meeting of creditors, things can happen to derail your case.
- A motion. The trustee will file a motion giving you a very brief period to provide your returns. If you miss the deadline, the court can automatically dismiss your case, leaving you no chance to plead your case to the judge.
- A substitute return. The IRS might file a “best estimate” claim based on your past income. The problem? IRS estimates are almost always higher than what you would owe after you file a proper return.
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The General Rules Of A Stay And Repeat Filings
You do get an automatic stay if you file a second bankruptcy petition within a one year period after the first case was dismissed. However, the stay lasts only 30 days from the date you file unless the court grants you an extension.
To keep your creditors at bay beyond the initial 30 days, you must file a request for it by the 30-day time limit and convince the court that you have filed the petition in good faith. If you have repeat bankruptcy filings, an automatic stays prospects become more challenging for you to realize.
If you had two dismissals within a year of filing the current case, you do not get an automatic stay upon filing. Instead, you must request a stay within 30 days after you file and must demonstrate good faith. Not having an automatic stay at the moment you file means that unsecured creditors may file lawsuits, obtain judgments, and even enforce them after you file bankruptcy.
Debtors in foreclosure particularly need to ask for a stay. Typically, a foreclosure becomes final when the time for buyers at a foreclosure sale to submit bids expires. If you have allowed the process to progress far when you file, you might find that you have precious little time to stop your homes loss.
What Assets Are Exempt From Bankruptcy In Ontario
When you file for bankruptcy in Ontario, you dont need to be concerned that you will lose everything. These assets are exempt under federal and provincial law:
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The Chapter 7 Discharge
A discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. Because a chapter 7 discharge is subject to many exceptions, debtors should consult competent legal counsel before filing to discuss the scope of the discharge. Generally, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of chapter 7 cases. In most cases, unless a party in interest files a complaint objecting to the discharge or a motion to extend the time to object, the bankruptcy court will issue a discharge order relatively early in the case generally, 60 to 90 days after the date first set for the meeting of creditors. Fed. R. Bankr. P. 4004.
The grounds for denying an individual debtor a discharge in a chapter 7 case are narrow and are construed against the moving party. Among other reasons, the court may deny the debtor a discharge if it finds that the debtor: failed to keep or produce adequate books or financial records failed to explain satisfactorily any loss of assets committed a bankruptcy crime such as perjury failed to obey a lawful order of the bankruptcy court fraudulently transferred, concealed, or destroyed property that would have become property of the estate or failed to complete an approved instructional course concerning financial management. 11 U.S.C. § 727 Fed. R. Bankr. P. 4005.
Bankruptcy Exemptions In Nunavut:
- No limit on household furniture and appliances
- No limit on clothes for you and your family
- No limit on medical or dental aids
- Enough food and fuel for 12 months
- No limit on hunting tools or tools of the trade
- Up to $35,000 of equity in your home
- Certain pensions and life insurance policies
Ontario bankruptcy exemptions
You may be afraid that you will lose everything if you file for bankruptcy, but this is not the case in Ontario. Here are the provincial bankruptcy exemptions that allow you to keep certain assets and possessions.
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What Personal Property Is Exempt
When it comes to personal property, states vary widely as to what is exempt, and in what amount. Types of personal property that are exempt in many states include: a car , household goods, clothing, jewelry, wedding rings, books, food, appliances, tools of your trade, and tax-exempt retirement accounts. Some states exempt firearms, provisions to last a certain period of time, livestock, and more.
How Chapter 7 Bankruptcy Works
In Chapter 7 bankruptcy, most or all of your debts are eliminated . In exchange, you must give up certain property so that the trustee can sell it and use the proceeds to pay your creditors. However, state and federal law exempts certain types of property, and in certain amounts. If personal property is exempt, you get to keep it in Chapter 7 bankruptcy.
Which exemptions you can use depend on where you live, and whether your state allows you to use the federal bankruptcy exemptions. To learn more about federal and state exemptions, and for links to each state’s exemption systems, see Bankruptcy Exemptions — What Do I Keep When I File for Bankruptcy?
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What If Im Behind On My Mortgage
If youâre behind on your mortgage payment and â¡ï¸
you donât want to keep the house: Chapter 7 provides a mechanism to surrender the house to the bank and discharge your obligation to pay the loan. This will protect you if your mortgage loan is a ârecourseâ loan where the bank could otherwise try to collect a deficiency judgment after the foreclosure.
you do want to keep the house: Chapter 7 is not ideal. It doesnât provide a mechanism to catch up on your mortgage payments. This means youâre still at the mercy of the bank and their willingness to modify your home loan to deal with your arrearage. If you can afford to make your full mortgage payments now, Chapter 13 bankruptcy may offer a solution.