For income tax preparation you must provide the Trustee with income
information, i.e., the most current pay stub or an income statement
if self-employed, U.I. information, welfare, and support paid/received
by court order or agreement. Note: you should supply
the Trustee with a copy of the court order or signed agreement for
alimony or child support.
The bankruptcy documents will be submitted to the Official Receiver’s
Office (Industry Canada, Bankruptcy Division). Within five days
after the bankrupt has signed his/her papers, a notice will be mailed
to all of the creditors advising them of the Bankruptcy. The purpose
of this notification is as follows:
- To have creditors file a Proof of Claim with the Trustee.
- To advise creditors of the bankruptcy generally.
- To advise creditors of their rights to request a meeting with
the Trustee and the person who is bankrupt.
- To advise creditors of the projected date of the discharge of
Immediately after you sign your papers you should notify any of
your creditors who have post-dated cheques that they should return
these cheques to you and not cash them. Also, if any creditor has
a pre-authorized payment, this authorization must be cancelled by
you, including those that may be made on your credit cards (which
should be turned over to the Trustee upon signing your papers).
The first counseling meeting takes place approximately 30 days
after the signing of the original papers for the Bankruptcy. The
location of the first counselling meeting for personal bankruptcies
is normally the Trustee’s office. If you fail to attend the
counseling session, you will not be entitled to an automatic discharge
and will be required to attend a court hearing to deal with your
Depending on the causes of the Bankruptcy or the individual problems
that are present, the counseling session will take place in the
Trustee’s office or be delegated to an outside agency (e.g.
credit counseling, Alcoholics Anonymous, Gamblers Anonymous, etc.).
If a Bankrupt person fails to attend a counseling session, he/she
is not entitled to receive an automatic discharge from bankruptcy.
If creditors request a first meeting, you will be required to attend
a meeting and you will be notified of the date and time.
If problems are extreme a meeting with the Official Receiver may
take place. The need for such meetings will be discussed with individuals
A period of time is now allowed to enable the initial administration
of the bankruptcy to be completed. This can involve the preparation
of Income Tax Returns, the return of property, which belongs to
a secured creditor, as well as any other matters to which the Trustee
is required to attend as part of his duties. If you have forgotten
to declare assets that you own, or debts that you have, please contact our office immediately.
On a monthly basis throughout the 9-month term of the Bankruptcy,
you will be asked to complete a Monthly Statement of Income and
Expenses. The purpose of this monthly statement is to allow the
Trustee to monitor your financial situation during the Bankruptcy.
If you have surplus income on a regular basis, you will be expected
to contribute a portion of the surplus to your creditors while you
are in bankruptcy. At least three months before the discharge hearing
date you will be asked to come to the Trustee’s office to
complete certain forms needed by the Trustee to prepare his report
for your application for discharge from your bankruptcy. At this
time you will also have the second counseling session, which is
required by the Bankruptcy and Insolvency Act. You will receive
a letter of instructions from the Trustee with respect to this meeting
and the completion of your bankruptcy. If you fail to attend this
meeting, you are not entitled to receive an automatic discharge
from your Bankruptcy – a hearing must be scheduled in court
for your discharge from bankruptcy. It is not uncommon for your
discharge from bankruptcy to be delayed up to ten (10) months while
waiting for a court date. Note: you will not receive
your discharge if the Trustee’s fees are not paid.
During the 8 week period prior to the discharge hearing, a report
is prepared by the Trustee and submitted to the Official Receiver
and the court with respect to all maters known to the Trustee up
to that time. A recommendation will be made based on the conduct
and co-operation by the bankrupt, which can affect the discharge
of the bankrupt. The result of this report is that the discharge
procedure (if the Trustee is able to report favorably on the conduct
of the bankrupt) is in process.
The automatic discharge hearing date for people filing bankruptcy
for the first time is 9 months after the bankruptcy has been filed.
The bankrupt will not normally be required to attend the discharge
hearing unless a creditor has objected to their discharge or some
other matter has come to light, which would indicate that the bankrupt
person should not be given an absolute discharge. Other matters
are listed in the booklet, which is given to every person at the
start of the bankruptcy. If the bankrupt is receiving an absolute
discharge, the papers take approximately 30 days after the discharge
hearing to be prepared and forwarded to the bankrupt.
If this is a second bankruptcy, the discharge will take place 24
months after the bankruptcy has been filed.
It is quite common after the bankrupt has been discharged for the
Trustee still to be completing certain of their duties. The most
common is the completion of the Income Tax Return for the calendar
year during which the bankruptcy occurred. Once the entire administration
of the bankruptcy is completed, the Trustee must be discharged.
A notice is sent to the bankrupt as to when this is occurring. It
is not uncommon for the discharge of the Trustee to take place as
long as 11⁄2 years after the debtor has been discharged.
Please note that any income tax refunds up to the end of the year
in which you file your bankruptcy and GST Credits until the Trustee’s
discharge will be sent to the Trustee for distribution to your creditors.
GST refunds cannot be paid to your creditors and will be refunded
to the bankrupt person unless the funds are required for Trustee’s
fees and disbursements.
Please make sure that the Trustee is aware of where you are living
and working and your current telephone numbers at all times up to
the date of both the bankrupt’s discharge and the Trustee’s
discharge. This will allow for your file to be completed in the
shortest possible time.
When you make a payment to the Trustee, please make your cheque,
money order, etc., payable to “Rumanek & Company LTD.,
In Trust.” Please make sure that your full legal name (or
that of the bankrupt if you are paying for someone else) is on the
cheque or cash receipt when payments are made.
If you have any difficulties at any time throughout the bankruptcy,
please contact the Trustee's in office.