New Brunswick Bankruptcy Exemptions
In New Brunswick, 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 $6,000 and you still owe $3,000 on the loan, the equity you have in the car is $3,000. In New Brunswick, the exemption for a car is $6,500. In this case, you would be entitled to keep the car and your unsecured creditors cannot take this from you during the bankruptcy process.
Can You File Bankruptcy On Personal Loans
While you can typically file bankruptcy on personal loans, theres a key difference to be aware of if you have an unsecured personal loan with a cosigner.
Under Chapter 13 bankruptcy, creditors usually cant call your cosigner during your bankruptcy period. Under Chapter 7, creditors can continue to contact your cosigner for payment.
In other words, your cosigner has greater protections under Chapter 13 bankruptcy than under Chapter 7.
Bankruptcy Can Not Eliminate Student Loans Other Than In Some Circumstances
Bankruptcy can not be used to clear out student loans. In a very few circumstances with very tough standards it may happen. However, these tough standards that show undue hardship are very difficult to meet in the first place. They require you to prove that you are completely unable to pay off your loans presently and may not even be able to do so in the future.
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Bankruptcy In The United States
Like the economy, bankruptcy filings in the U.S. rise and fall. In fact, they are like dance partners where one goes, the other usually follows.
Bankruptcy peaked with just more than two million filings in 2005. That is the same year the Bankruptcy Abuse Prevention and Consumer Protection Act was passed. That law was meant to stem the tide of consumers and businesses too eager to simply walk away from their debts.
The number of filings dropped 70% in 2006, but then the Great Recession brought the economy to its knees and bankruptcy filings spiked to 1.6 million in 2010. They retreated again as the economy improved, but the COVID-19 pandemic easily could reverse the trend in 2021. It seems inevitable that many individuals and small businesses will declare bankruptcy.
Alternatives To Chapter 7
Debtors should be aware that there are several alternatives to chapter 7 relief. For example, debtors who are engaged in business, including corporations, partnerships, and sole proprietorships, may prefer to remain in business and avoid liquidation. Such debtors should consider filing a petition under chapter 11 of the Bankruptcy Code. Under chapter 11, the debtor may seek an adjustment of debts, either by reducing the debt or by extending the time for repayment, or may seek a more comprehensive reorganization. Sole proprietorships may also be eligible for relief under chapter 13 of the Bankruptcy Code.
In addition, individual debtors who have regular income may seek an adjustment of debts under chapter 13 of the Bankruptcy Code. A particular advantage of chapter 13 is that it provides individual debtors with an opportunity to save their homes from foreclosure by allowing them to “catch up” past due payments through a payment plan. Moreover, the court may dismiss a chapter 7 case filed by an individual whose debts are primarily consumer rather than business debts if the court finds that the granting of relief would be an abuse of chapter 7. 11 U.S.C. § 707.
Debtors should also be aware that out-of-court agreements with creditors or debt counseling services may provide an alternative to a bankruptcy filing.
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Bankruptcy Exemptions In Ontario
- No limit on clothes for you and your family
- Household furniture, utensils, equipment, food and fuel up to $13,150
- Tools and instruments used by you in your business up to $11,300
- One motor vehicle up to $6,600
- If the equity in your home does not exceed $10,000, your home is exempt if the equity exceeds $10,000, then your home is not exempt from seizure
- Most pension plans and certain types of life insurance policies
- RRSPs, except for contributions in the 12 months before the date of bankruptcy
- For farmers, up to $29,100 for livestock, fowl, bees, books, tools and implements of the trade
For more information on bankruptcy exemptions in Ontario, find a Licensed Insolvency Trustee near you.
What Bankruptcy May Do
Bankruptcy may wipe out credit card debt and other unsecured debts: Most unsecured debts such as credit card bills, medical bills, utility bills and personal loans are dischargeable in bankruptcy. Unless you have a special “secured” credit card, your credit card debt will usually be considered unsecured if you file for bankruptcy.Bankruptcy may stop creditor harassment: The moment you file for bankruptcy, you’ll receive a preliminary injunction called “the automatic stay” that stops most lawsuits filed against you and protects your money and assets from creditors. The automatic stay also stops almost all collection lawsuits that have been filed against you and protect your property from creditors, collection agencies and government entities.
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Bankruptcy Exemptions On Prince Edward Island
- No limit on clothing for you and your family
- No limit on medical or health aids
- Any motor vehicle needed for transportation to work up to $6,500, or up to $3,000 if not used for work
- Household furniture, utensils, equipment, food and fuel up to $5,000
- Tools used by you in your business or trade, up to $2,000
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:
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What Bankruptcy Can Do For You
More than anything, a bankruptcy filing can allow you to catch your breath. With the benefit of the automatic stay, you wont have to worry every time the phone rings or the mailman comes by. A bankruptcy will temporarily stop most wage garnishments, lawsuits and collection attempts, but not allfamily law obligations and criminal restitutions are typically not covered by a bankruptcy filing.
A bankruptcy filing can also help you:
- Temporarily stop eviction, foreclosure and repossession proceedings
- Discharge unsecured debts, including credit card and medical bills
- Eliminate any debt on secured property, but youll have to return the property
- Set up new payment arrangements with creditors
Whats The Difference Chapter 7 Vs Chapter 13 Bankruptcy
Although both types of bankruptcy, Chapter 7 and Chapter 13, will help release you from debt, they do so in different ways.
In Chapter 7 bankruptcy, your nonexempt assets are liquidated, and the funds are distributed among creditors to satisfy some of your debt. Assets exempt from liquidation include items considered necessary for your everyday life, such as vehicles or tools you use for your job, up to a certain value.
Any remaining qualifying debt is fully discharged. Creditors, furthermore, will have to stop calling you to collect.
Only low-income earners typically qualify for Chapter 7 bankruptcy. If your income exceeds the state median income, youll have trouble qualifying. Youre also not eligible if youve declared Chapter 7 bankruptcy in the past eight years.
Chapter 13 bankruptcy restructures your debt but doesnt discharge it right away. With this approach, you enter a new repayment plan on your debt for a period. If you still owe money at the end of this period, your debt might be wiped out.
Note that either type of bankruptcy could remain on your credit report for up to 10 years.
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What Debts Cannot Be Eliminated In Bankruptcy
There are certain types of debt that cannot be eliminated in bankruptcy. Here are a few examples:
Secured debt: If you purchase a car or other merchandise with a loan, you make an agreement with the lender to pay for the item in exchange for the current use of it. If you later file for bankruptcy, youll have to decide whether to give the item up or continue paying the lender for it.
Child support and alimony: You cant eliminate a legal obligation to pay child support or alimony. Any outstanding balance owed at the time of a bankruptcy filing will still remain after the case is over.
Legal fees and debt in a divorce decree: In many divorce decrees, one spouse agrees to pay for legal fees or some outstanding debts owed by the other spouse. These debts will survive your bankruptcy. For example, if you agree to pay the credit card balances in your name and the name of your ex-spouse, you couldnt then file bankruptcy to wipe out those debts or the agreement to pay. Your ex-spouse could still force you to pay those bills.
Restitution: Court-ordered restitution is not dischargeable in bankruptcy. Restitution is a court-ordered sum of money you must pay for causing financial loss or personal injury to another. This includes payments for any injury you cause resulting from driving under the influence.
Clearing Out Unsecured Credit Debt
Bankruptcy cases can help out in clearing any unsecured credit card debt. This also includes any medical bills, or utility payments that are overdue as well as personal loans. Other than school loans it can generally clear out any non-priority unsecured debts.
Unsecured debt implies that you havent made an agreement to return the purchased property in case you are unable to pay for it. Secured debt means that you need to return the item that you purchased back, this includes things like electronics jewelry, furniture, appliances etc. You can generally tell the secured one by reading their credit contracts or receipts.
What Can You Do If You Can’t Find A Licensed Insolvency Trustee
If you are unable to get an LIT to accept your file, or if you cannot afford to hire an LIT, the OSB’s Bankruptcy Assistance Program may be able to help, provided that you:
- have contacted at least two LITs and tried to obtain their services
- are not, and have not recently been, involved in commercial activities
- are not required to make surplus income payments and
- are not in jail
A creditor is harassing me daily. What should I do?
Although the regulations differ slightly across Canada, there are limits on what creditors and collection agencies are allowed to do. For example, they cannot make telephone calls of such a nature or frequency that they amount to harassment of you or your family. In addition, there are certain times when they are not allowed to call.
Tips for dealing with collection agencies If you feel you are being harassed, contact either an LIT or a qualified and experienced credit counsellor. They can help you by serving as an intermediary between you and your creditor.
and we will send you some information and a list of LITs who participate in the program.
What Bankruptcy Cannot Do:
- Prevent repossession of items by a secured creditor. Bankruptcy discharges the underlying debt, but it does not remove the underlying lien. Therefore, if you do not continue to pay a secured debt then the creditor may repossess the property. You would not be liable for any deficiency balance that may be left after the sale of the property.
- Wipeout Student Loans- For most people, their student loans will survive the bankruptcy. The only time student loan debt will be discharged in bankruptcy is if the debtor proves, through additional motions and court hearings, that repaying their student loans would create an undue hardship. The undue hardship standard is an incredibly tough standard to meet.
- Eliminate child support or maintenance obligations. Chapter 7 bankruptcy does not discharge domestic support obligations.
- Eliminate most tax debt- many taxes are not dischargeable in bankruptcy. However, it is possible to eliminate your tax debt in bankruptcy if it is older and meets certain standards.
- Eliminate other non-dischargeable debts the follow are debts, other than those discussed above, that will not go away with a bankruptcy: debts from personal injury or death caused by driving while intoxicated, fines and penalties imposed from violating a law such as criminal restitution or traffic tickets.
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What Chapter 7 Bankruptcy Can Do
This program, commonly known as a âliquidation,â provides a way for borrowers to completely eliminate most of their consumer debt. In exchange, the trustee of the court may seize some of your property to pay back some of your creditors, but the law makes a wide variety of assets exempt. Because a Chapter 7 bankruptcy focuses so closely on unsecured debt, it typically cannot be used to discharge auto loans or mortgages.
The Truth About Bankruptcy
If youre reading this, youre probably thinking about bankruptcy. The world may tell you this route is a fresh start . . . or a horrible ending. But whats the truth about bankruptcy?
In simple terms, bankruptcy is a legal process a person can go through to clear some of the debts theyre unable to pay.
If youre so overwhelmed by debt that bankruptcy feels like your only option, know these three things: 1) There is hopeand you will be okay. 2) There are other optionsand you should try every single one before jumping into bankruptcy. 3) Bankruptcy does not define you and will not be the end.
Keep these three things in mind as you read through the rest of this article and learn the truth about bankruptcy, including a breakdown on these specific topics:
Temporarily Stop An Eviction Repossession Or Foreclosure
A stay order can temporarily out an eviction, repossession, or foreclosure on pending. Evictions may come to a halt after bankruptcy filing but this is only temporary and once the case is complete a bankruptcy may not necessarily help you from not being evicted in some cases. In case the landlord had already filed an eviction judgment against you then in such cases, theres not much hope for a bankruptcy case.
As for foreclosures, the automatic stay may temporarily halt it but it cant help you retain the property. If you are unable to meet the payment demand then you will certainly lose the property once the stay is lifted especially if you have filed for Chapter 7. However, filing for a Chapter 13 may allow you to catch up on your previous payments. This may help you keep your assets.
What Bankruptcy Can & Cant Do For Personal Finances
Bankruptcy can do many things for your personal finances. Chapter 13 can do even more than Chapter 7 for many individuals. However, bankruptcy is not always the best solution or a complete solution to debt problems. You should learn everything you can about bankruptcy options and alternatives to bankruptcy before you decide how to improve your personal finances and get rid of debt.
With that in mind, below is a list of the things that bankruptcy can and can not do for your personal finance.
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What A Bankruptcy Can And Cannot Do And Why You Should Hire A Bankruptcy Attorney
Bankruptcy is a legal process in which people or entities that are struggling with debts or can not repay debts can seek relief from some or all of their debt. This allows them to get rid of certain obligations that are imposed on them and have a fresh new start. The two main types of bankruptcy that are filed are Chapter 7 and Chapter 13 bankruptcy. Both of them have their different benefits and both treat debt differently. Either of them is chosen by your attorney depending upon whatever they deem right for you on the basis of your income and property. Lets see why should you hire a bankruptcy attorney.
Assisting With Your Chapter 7 Or Chapter 13 Bankruptcy In The Florida Panhandle
The Sliva Law Firm is a debt-relief agency helping individuals file for debt-relief under the Bankruptcy Code. We workwith you from the beginning to the end of the bankruptcy process. Bankruptcy is a legal proceeding that helps people who cannot pay their bills get a fresh financial start. The right to filefor bankruptcy is provided by federal law and all bankruptcy cases are handled in federal court. Filing bankruptcy immediately stops your creditors from seeking to collect debts from you, atleast until your debts are sorted out according to the law. Our goal is to get you past this tough time in your life as quickly as possible.