Canadian Bankruptcy Reform.
New Canadian Bankruptcy Laws.
NEWS FLASH - September 19, 2009 - The federal government announced today that the remaining new bankruptcy laws would go into force on September 18, 2009:
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Bankruptcy Discharge Rules:
- 9 month automatic discharge for 1st. time bankrupts who fulfill all their duties and who do not have excess income. (Required monthly payment of less than $100.00 per month)
- 21 months (or more at the court's discretion) for 1st. time bankrupts who fulfill all their duties. and who have excess income. (Required monthly payment of $100.00 per month or greater)
-24 months for 2nd time bankrupts who do not have excess income. (Required monthly payment of less than $100.00 per month)
-36 months for 2nd time bankrupts who have excess income. (Required monthly payment of $100.00 per month or greater)
-Bankrupts with personal income tax debt of $200,000.00 or more representing 75 percent or more of total unsecured claims, are not eligible for an automatic discharge. They must go to court for an adjudication.
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High Income Tax Debt:
This Law goes into force on September 18, 2009.
Bankrupt individuals with more than $200,000 in personal income tax debts representing 75 percent or more of their total unsecured liabilities will not be eligible for an automatic discharge. These individuals will have to seek a Court order to be discharged of their debts.
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Dollar Threshold for a Consumer Proposal Is Raised:
This Law goes into force on September 18, 2009.
Consumer and commercial debts of an individual, excluding debts secured by the individual's principal residence, are not more than $250,000.
For debt greater than this amount a Division I Proposal can be filed.
NEWS FLASH - July 7, 2008 - The following bankruptcy law changes have gone into force today, Monday, July 7, 2008:
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The Wage Earner Protection Program Act (“WEPPA”) and Regulations. The WEPP will compensate individuals for amounts earned, but not paid, during the six months preceding the bankruptcy or receivership of their employers under the BIA. The WEPP will help protect workers by providing a guaranteed payment of a maximum of $2,000 in respect of wages, salaries, commissions or compensation for services rendered, and up to $1,000 in respect of disbursements owing to travelling salespeople incurred should their employer declare bankruptcy.
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Reduction of the student loan discharge period from 10 to seven years. This amendment will apply where the debtor obtains his or her discharge on or after July 7, 2008 or becomes bankrupt on or after July 7, 2008. The amendment that will reduce to five years the period a bankrupt will have to wait to make a “hardship” application to have student loan debt or obligation discharged (BIA , s. 178(1.1) is also now in force. This amendment applies to all debtors notwithstanding when the bankruptcy or the process that results in the bankruptcy is initiated.
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Provision of protection of all registered retirement savings plans (RRSP's, RRIF's and DPSP's (Deferred Profit Sharing Plans).
