Fresh Start... the road to financial freedom. A.C. POIRIER & ASSOCIATES INC.
Contents Introduction..........................1 Personal Bankruptcy....................4 Proposals to Creditors..................14 Closing Summary.....................16 Glossary............................17 Fresh Start Workbook
Introduction Are you experiencing a difficult financial situation? Do you owe money that you don t know how to repay? Perhaps through a series of unfortunate circumstances or poor financial management, you find yourself in financial difficulty. A.C. Poirier & Associates Inc., may be able to assist you in resolving your financial problems and getting a fresh start. While there are a number of possible alternatives available to you in dealing with financial difficulties, this booklet has been prepared as a basic guide designed to assist you in understanding bankruptcy, the services of A.C. Poirier & Associates Inc., and to outline our responsibilities as a Trustee. This guide describes some of the possible solutions available to you, discusses their implications, and contains forms necessary to provide the information you will need to get started. As you read through the booklet remember that at the back of this booklet there is an explanation of words with which you may be unfamiliar (see the Glossary on page 17). For more specific information, please contact us at one of the phone numbers listed on the back of this booklet. Our staff will be pleased to answer your questions by telephone, or to make an appointment for you to have a free consultation. 1
Introduction What are the options? Personal Bankruptcy Bankruptcy is a formal proceeding under the Bankruptcy & Insolvency Act that is available to an insolvent debtor to obtain relief from a financial crisis. Generally speaking, you qualify for bankruptcy if you owe at least $1,000 and are unable to pay your debts as they become due. The process is intended to provide financial rehabilitation and a new start in life for you, as well as an equitable and orderly distribution of your assets amongst the creditors by a Trustee in Bankruptcy. Refer to page 4 for further details. Proposal to Creditors under the Bankruptcy & Insolvency Act A formal Proposal usually provides for payment of a percentage of the total debt. A Trustee in Bankruptcy administers the proposal which could involve regular payments over a period of time and result in a partial payment to creditors. The creditors vote on whether or not they wish to accept the proposal. If the creditors do not accept the proposal, you may be automatically bankrupt, depending upon the type of proposal filed. Refer to page 14 for further details. Orderly Payment Of Debts (O.P.D.) This program is available in certain provinces including Prince Edward Island and Nova Scotia and provides for payment in full of all debts over a period of time. There are income and other qualifications that must be met before you will be accepted into this program. The program is not available in New Brunswick. Non-Legislative Debt Settlement Arrangements (Informal Proposal) Rather then entering into a formal Proposal to creditors under the Bankruptcy & Insolvency Act, you can enter into a private agreement with your creditors, usually in writing, where the creditor settles or defers payment of some or all of the debt. If you cannot pay your bills and do nothing your creditors will continue to demand payment, turn your account over to a collection agency or start formal Court action. When a creditor goes to Court a statement of claim is issued which you must defend. If you do not defend the claim successfully a formal judgement is issued against you by the Court. Once a creditor obtains a judgment, it can attempt to collect its account by obtaining Court Orders to seize assets. This can also result in a garnishment of wages, depending on the province in which you live. 2
How Do I Know What is the Right Solution For Me? There are a variety of possible solutions to a financial crisis. A.C. Poirier & Associates Inc. provides an initial consultation at no charge. The consultation can be done by telephone or in person. This will provide you with an opportunity to gain an understanding of the bankruptcy process and other alternatives available to you and to ask the Trustee any questions you may have. To obtain the information necessary to advise you on the alternatives best suited to your circumstances, we will need to know your income, the amount you owe to your creditors, and what assets you own. It is imperative that we have all the information necessary to provide you with sound advice. What Information do I Provide? There is a workbook at the back of this booklet which must be filled in prior to the Trustee preparing your Bankruptcy or Proposal papers. The staff of A.C. Poirier & Associates Inc. can assist you in completing the information. All assets and liabilities must be listed in the workbook. A creditor cannot be left out for any reason. In Bankruptcy or Proposal proceedings, all creditors are entitled to be notified and to share in the distribution of any funds. What Kind of Counselling is Available After I file Bankruptcy or a Proposal? As part of the Bankruptcy or Proposal process, you will receive two counselling sessions. These are mandatory and are provided at various stages. A.C. Poirier & Associates Inc. conducts these sessions on an individual basis. You may also have a private in-office meeting with the Trustee at no charge, anytime during Bankruptcy or Proposal. First Counselling Stage (Consumer and Credit Education) The first counselling session is provided approximately 2-8 weeks after the commencement of the Bankruptcy or the Proposal. To protect your privacy we do not hold group counselling sessions. The purpose of this session is to assist you to improve money management and budgeting skills. You will also be provided with relevant consumer education information on such subjects as home economics, spending and shopping habits, recognizing warning signs of financial difficulties, obtaining and using credit, and the implication of credit reporting services for debtors. Explanations are provided to assist you in budgeting and monitoring monthly income and expenses. Second counselling Stage (Identification of Road Blocks to Solvency and Rehabilitation) The second stage counselling session is held prior to the seventh month of your bankruptcy. The purpose of this session is to follow up on money management and budgeting skills and to help identify non-budgetary causes that may have contributed to your financial difficulties. At this stage we will assist you with long-term financial management goals and provide you with guidance to help you meet your financial objectives after bankruptcy. 3
Personal Bankruptcy How Do I Enter Into Personal Bankruptcy? There are two ways you can become bankrupt: Voluntary A voluntary bankruptcy is initiated by you. The formal documentation necessary to start the bankruptcy process is prepared by the Trustee and is based upon the information contained in the Fresh Start Workbook at the back of this booklet. A voluntary bankruptcy is referred to as filing an Assignment in Bankruptcy. All assets (things you own) and liabilities (amounts you owe) must be listed in the workbook. A creditor cannot be left out for any reason. In Bankruptcy or Proposal proceedings, all creditors are entitled to be notified and to share in the distribution of any funds. If a creditor is not disclosed, then you may be responsible for payment of the same amount which the creditor would have received if the creditor had been notified. Involuntary A creditor(s) asks the Court to make an Order stating that a person is Bankrupt and to appoint a Trustee in Bankruptcy. This Order is called a Receiving Order. What is an Assignment in Bankruptcy? An Assignment in Bankruptcy is a legal document where you assign or transfer your assets to a Trustee in Bankruptcy for the general benefit of the creditors. An Assignment in Bankruptcy, when filed with the Official Receiver (the Superintendent of Bankruptcy s representative in the province) is the starting point of the bankruptcy. The date of filing of the assignment is the effective date of bankruptcy. Bankruptcy serves to transfer title/ownership of your assets to the Trustee. The Bankrupt person no longer has any right to deal with these assets. Certain assets, however, are EXEMPT from seizure and therefore are not transferred to the Trustee. 4
The Assignment in Bankruptcy also causes a "Stay of Proceedings", which prohibits all creditors from taking legal action against you, with the exception of alimony or child support proceedings. Once you are bankrupt, credit collection procedures are terminated and creditors cannot continue with garnishments or lawsuits. Creditors must make their inquiries through the Trustee. Exempt Assets In a personal bankruptcy, you can keep certain assets. These are referred to as "Exempt Assets". The exempt assets are determined by provincial laws and therefore vary from province to province. In the Atlantic Provinces the exempt assets generally include: A vehicle if owned outright and needed in the course of employment. Household goods and personal effects Pensions Certain types of RRSP s Tools of trade Provincial laws determine the maximum value allowed for each exempt asset. The Trustee can provide you with more specifics. The Trustee will normally retain some GST rebates. Should I Continue To Pay Any Creditors? Once you become bankrupt, you must not make any further payments to any unsecured creditors. Payments to secured creditors (creditors that have a lien on assets) should only be continued after consultation with the Trustee. May I Keep Assets Which I Have Pledged if I Continue to Pay the Secured Creditor? In certain circumstances, it may be possible for a Bankrupt to keep pledged assets (e.g., house, car, furniture, etc.) provided that: The Trustee has determined that the security is valid. The Trustee has determined that there is no equity in the asset for the preferred or unsecured creditors and has released its interest in the asset. The Trustee and the secured creditor have agreed to leave the asset in your possession and the secured creditor has agreed to accept payments from you. You can afford to make the payments and the payments are reasonable in your circumstances. 5
Personal Bankruptcy What is the Difference between a Summary Administration and an Ordinary Administration? A summary administration is a bankruptcy in which the estimated realization of assets by the Trustee is less than $10,000. Where the estimated realizable value of assets by the Trustee is more than $10,000, the bankruptcy is referred to as an ordinary administration. Exempt assets and the secure portion of assets are excluded in the calculation of the $10,000 limit. The majority of personal bankruptcies are summary administrations. In summary administrations, the Trustee is not required to advertise the bankruptcy in the newspaper. How Long am I Bankrupt? You are Bankrupt from the time of filing an assignment in bankruptcy until a Certificate of Discharge is issued. In most cases, this period of time is approximately 9 months, and during this time, you are referred to as an undischarged bankrupt. What Happens to My Wages During Bankruptcy? Your wages, including salaries and commissions, are monitored by the Trustee. Each month you are required to complete an income and expense statement and forward it to the Trustee.This statement shows the amount of monthly income for your household family unit as well as amounts spent on rent, food, clothing, etc. The Trustee will provide you with blank income and expense statements for this purpose. The Superintendent of Bankruptcy publishes guidelines as to the normal maximum amounts required as living expenses for a household family unit. A portion of any income earned in excess of these guidelines is to be paid by the Bankrupt to the Trustee, for the creditors. These payments, if applicable, are referred to as Surplus Income Payments and must be paid to the Trustee each month during the period of the bankruptcy. At the commencement of the bankruptcy, the Trustee will review and determine the Surplus Income Payment requirements. This is based on the Superintendent of Bankruptcy Guidelines, taking into consideration family obligations and extraordinary circumstances. The surplus income payments will be adjusted based upon actual earnings during the period of bankruptcy. Failure to make the required Surplus Income Payments may result in the Trustee obtaining a Court Order to seize a portion of the bankrupt s wages or self-employed income, a Conditional Order of Discharge being issued by the Court, or a Conditional Order of Discharge being issued by the Trustee, with the bankrupt s consent. 6
Who Will Know About My Bankruptcy? In all bankruptcies, the creditors received a notice of the bankruptcy. Credit bureaus maintain a record of all bankruptcies for several years. The length of time is usually seven years. If the bankruptcy is an ordinary administration, the Trustee must publish the notice of bankruptcy in the local newspaper in the area of the bankrupt s residence. If the bankruptcy is a summary administration, the Trustee is not required to publish the notice of bankruptcy in the local newspaper. The Office of the Superintendent of Bankruptcy maintains a permanent record of all bankruptcies. Normally, employers are not notified of the bankruptcy. It is up to you to decide whether to inform your employer of the bankruptcy. In some cases the employer may be aware of the employee s financial difficulties, and will likely look upon the bankruptcy as a beneficial solution to the employee s problems. It may be necessary for the Trustee to communicate with the employer to stop a garnishment or to obtain information required for filing your income tax returns. What Happens at the Meeting of Creditors? In a summary administration bankruptcy a meeting of creditors will not be called unless the creditors request one. The Trustee in Bankruptcy will send Notice of the bankruptcy to all creditors disclosed to the Trustee by you. The creditors have 30 days to request a meeting. You must attend this meeting. The purpose of the first meeting of creditors is to: Consider the financial affairs of the bankrupt. Affirm the appointment of the Trustee. Appoint inspectors. Give directions to the Trustee with regard to the sale of assets, investigations to be conducted, actions to be taken, etc. The Trustee will provide the creditors who attend the meeting with a report, either verbal or written, on the administration of the bankruptcy including an estimate of the realizations for the unsecured creditors. The unsecured creditors can either affirm the appointment of the Trustee or substitute the Trustee. Trustees are substituted in very rare circumstances. An Inspector(s) may be appointed to represent the creditors and assist the Trustee with the administration of the bankruptcy. It is possible, but unlikely, that there may be other meetings of creditors. If so, the bankrupt may be requested to attend. Creditors meetings are conducted in a business-like manner and are not held for the purpose of harassing the bankrupt or conducting extensive questioning of the bankrupt. The bankrupt s presence at these meetings is required for the purpose of answering proper questions which may be asked and which are permitted by the chairman. 7
Personal Bankruptcy Do I Have Any Other Duties and Responsibilities? A bankrupt s duties and responsibilities are detailed in the Bankruptcy & Insolvency Act. In summary, the bankrupt person is required to: Submit monthly income and expense statements to the Trustee with proof of earnings, which is normally a copy of your pay stubs. Attend a minimum of two Counselling Sessions. Provide the Trustee with all information necessary to file pre-bankruptcy income tax returns. Keep the Trustee advised of place of residence, phone number and employer. Advise the trustee of any assets you acquire after your bankruptcy and before your discharge from bankruptcy. Make the monthly surplus income payments to the Trustee. Reveal and turn over to the Trustee all assets in their possession or control. Turn over all credit cards to the Trustee for cancellation. Make available to the Trustee all relevant books and records. Attend any examination called by the Official Receiver. Assist the Trustee with making an inventory of assets if the Trustee wishes to do one. Disclose to the Trustee the details of all property disposed of by sale, gift or settlement. Attend the first meeting of creditors and any other meetings that may be scheduled. Generally assist the Trustee. Resign any corporate directorships. Provincial and federal legislation prohibits an undischarged bankrupt from being a corporate director. It is your responsibility to understand these duties prior to filing an assignment in bankruptcy. The Trustee can answer your questions about your duties. Who Files My Income Tax Returns? The Trustee will file the income tax returns for the year you file for bankruptcy. There are two returns filed: one covers January 1 to the date of bankruptcy and the second covers the period from the date of bankruptcy until December 31. You must provide the Trustee with the information required to file these returns. Income tax refunds from prior years and the pre-bankruptcy refund are assets of the bankrupt s estate and Revenue Canada automatically forwards these refunds to the Trustee. Post-bankruptcy income tax refunds will also be forwarded to the Trustee and will become part of the bankruptcy estate. Amounts owing on prior years income tax returns and the pre-bankruptcy return are debts that are discharged by the bankruptcy. The bankrupt must pay income tax liabilities arising from the post-bankruptcy return. 8
Does The Trustee Conduct Any Investigations? You may be required to attend an examination under oath, at the Office of the Official Receiver, as to the facts relating to the bankruptcy. The Trustee will also investigate any transactions prior to bankruptcy involving circumstances where the bankrupt transferred assets to any person(s) for other than fair value, or where any creditor(s) received preference over other creditors by payment or by the giving of security. The Trustee may commence legal action to reverse these transactions. What Happens if I Acquire Assets During My Period of Bankruptcy? Non-exempt assets acquired or purchased during the period of bankruptcy may be taken by the Trustee for the general benefit of the unsecured creditors. These assets include inheritances, lottery winnings and any other non-exempt assets acquired or purchased. You should consult with the Trustee before acquiring any non-exempt assets during bankruptcy. What Are Bankruptcy Offenses? The Bankruptcy & Insolvency Act provides for penalties for bankrupts who commit certain bankruptcy offenses. The following are some examples of bankruptcy offenses: Failure to comply with duties as defined by the Act. (These duties are listed on page 8) Fraudulent disposition of property. Refusal to answer questions at any examination held pursuant to the Act. Falsifying a statement or accounting record. Concealing, destroying or falsifying books or records. Obtaining credit by false representation. Concealing or removing property. Engaging in a trade or business without disclosing to all persons involved in any business transaction that he or she is an undischarged bankrupt. Obtaining credit while an undischarged bankrupt without disclosing the fact of being an undischarged bankrupt. Persons convicted of bankruptcy offenses may be fined or imprisoned. 9
Personal Bankruptcy What is a Bankrupt s Discharge? One of the major purposes of the bankruptcy process is to provide you with a fresh financial start. A discharge from bankruptcy accomplishes this and occurs at the end of the bankruptcy period. If this is your first bankruptcy, then the Bankruptcy & Insolvency Act provides a procedure for an automatic discharge, which is one where there is no Court hearing. To qualify for an automatic discharge you must: Be a first-time bankrupt, Have complied with your duties under the Bankruptcy & Insolvency Act and cooperated with the Trustee, as required, and The discharge must not be opposed by any creditor(s), the Trustee or the Superintendent of Bankruptcy. One month prior to the end of the nine-month bankruptcy period, the Trustee will prepare a report recommending whether or not a bankrupt should receive a discharge, and whether the discharge should be subject to conditions. In preparing this report, the Trustee takes into consideration the bankrupt s conduct and the ability to make Surplus Income Payments. This report is sent to the Superintendent of Bankruptcy, any creditors who request a copy and to you. If you do not agree with the Trustee s recommendations, you may request mediation. The Trustee will either request mediation or recommend a conditional order of discharge on the grounds that: You chose bankruptcy where, in the Trustee s opinion, a viable proposal could have been filed; You failed to comply with the requirement to make surplus income payments; or You did not fulfill your duties (see page 8). Where you disagree with the Trustee s recommendation for a conditional order of discharge and mediation is unsuccessful, the Trustee will arrange for your discharge application to be heard by the Court. You may attend the Court hearing in person, or be represented by legal counsel. After reviewing the Trustee s report and the bankrupt s affidavit, and after hearing the Trustee, you and any creditors in attendance, the Court will issue one of the following types of orders: 10
Absolute Order of Discharge This type of Order absolutely discharges a bankrupt from obligations to pay the debts owing at the date of bankruptcy. An Absolute Order of Discharge does not apply to any debts incurred by you after the date of bankruptcy. Conditional Order of Discharge This type of order states that the bankrupt will receive an Absolute Order of Discharge when a certain condition(s) is met. The condition is usually payment of a certain amount of money to the Trustee for the general benefit of the unsecured creditors. The amount of payment can be set by the Trustee with the bankrupt s consent. If a consensus cannot be reached between the Trustee and the bankrupt, the amount of the payment will be at the Court s discretion. Payments are usually based on the bankrupt s ability to pay, as indicated by the bankrupt s income potential in the future and the net income of the bankrupt s household family unit. When the Court grants a Conditional Order of Discharge, the bankrupt may apply to the Court after one year to have the condition changed if it can be shown that there is a reasonable probability that the condition cannot be met. Suspended Order of Discharge This type of Order states that the bankrupt will receive an Absolute Order of Discharge at some specific date in the future. This type of Order is usually issued when the Court considers it appropriate for the bankrupt to be penalized due to his or her conduct or because it is not the bankrupt s first bankruptcy. What if I Don t Get a Discharge? If the bankrupt cannot be located or has not cooperated with the Trustee in ensuring that the administration of the Bankruptcy is complete, the Trustee may be obliged to ask the Court to delay the bankrupt s application for discharge indefinitely. The Trustee will then proceed to close the file and apply to the Court for the Trustee s Discharge. Once the Trustee has been discharged, and if the bankrupt has not received an Absolute Order of Discharge, the bankrupt may be in a worse position than before the bankruptcy. The reasons for this include: Once the Trustee has closed the file and has been discharged, the Stay of Proceedings is over and the creditors may resume collection efforts against the bankrupt. A bankrupt remains a bankrupt until an Absolute Order of Discharge is issued. Consequently, each time a bankrupt obtains credit without advising the creditor that he or she is an undischarged bankrupt, a bankruptcy offense is committed. Any assets acquired, such as lottery winnings, inheritances, savings, etc., can be seized by creditors until an Absolute Order of Discharge is obtained. Consequently, it is extremely important that the discharge terms are resolved before the Trustee closes the file. 11
Personal Bankruptcy Who pays for the Trustee s Services? The Trustee s fee is set by the Bankruptcy & Insolvency Act. In most cases the person filing for bankruptcy pays the fee. The basic fee covers all services provided by the Trustee including both mandatory counselling sessions and registration fees. Affordable monthly installments will be discussed with you prior to you filing for bankruptcy. Your monthly or lump sum payment to the Trustee to cover the Trustee s fee is credited to any Surplus Income Payment requirements. In ordinary administration bankruptcies where there are significant assets and substantial work for the Trustee to do, the Trustee s fee is based on the number of hours spent by the Trustee s staff at the normal billing rates. All Trustee s fees are reviewed by the Office of the Superintendent of Bankruptcy and, if applicable, are approved by the Court. Do I Hire the Trustee? It is a common misconception that the bankrupt hires the Trustee. This attitude is quite often reinforced by the fact that the bankrupt: Chooses the Trustee. Perceives to be paying the Trustee. Is guided through the bankruptcy process by the Trustee. Has all questions answered by the Trustee. Provides the Trustee with detailed information. If required, assists the Trustee in selling non-exempt assets. However, it should be clearly understood that the Trustee has a responsibility to the creditors and the Court as well. One of the Trustee s main responsibilities is to maximize the amount of funds available for distribution to the unsecured creditors. What Do I do if A Creditor Sues Me? Once a person declares bankruptcy a creditor cannot continue Court actions. If a creditor commences a Court action against you after bankruptcy, you should immediately inform the Trustee of the action and send any legal documents to the Trustee. If a creditor commences a Court action against a person who has been discharged from bankruptcy, the person will usually only have to provide the Court and the creditor with a copy of the final discharge documents, for the action to be stopped. 12
What is the Trustee s Discharge? When work on a bankruptcy file is complete, the Trustee must file a formal report with the Office of the Superintendent of Bankruptcy and, depending on the type of file, the Court. This report includes an accounting of the liquidation of the assets, the various costs of the administration of the bankruptcy, details of the Trustee s fee and listing of the funds distributed to the unsecured creditors. The Trustee notifies the bankrupt and the creditors of the time and place of the Trustee s discharge hearing. Anyone who takes exception to the Trustee s administration may make their objection to the Court, in which case a Court hearing will be scheduled to review their concerns. When the Court finds the Trustee has satisfactorily completed the administration of the bankruptcy, it will grant the Trustee a discharge and the Trustee s duties are concluded. We re on the road to financial freedom! 13
Proposals to Creditors In some cases it may be possible for you to make a Proposal to your creditors for a reduction of your debts or deferral of payment, instead of going bankrupt. Proposals are different than bankruptcy in that you can remain in possession of your assets and, provided the creditors agree with your Proposal, there will be no resulting bankruptcy. The laws governing proposals under the Bankruptcy & Insolvency Act allow extensive flexibility in payment terms and the treatment of assets. Normally though, the Proposal must offer the creditors more than what they would receive in bankruptcy. A Proposal may be the best option for you if you can afford to make payments to your creditors. A.C. Poirier & Associates Inc. can assist you in making the best decision. How Do I Qualify for a Proposal? For a Proposal to be acceptable to your creditors, it must generally give the creditors a greater return or payment on their outstanding accounts than they would receive in bankruptcy. You must be in a financial position able to make the payments: there is no advantage to filing a Proposal if you cannot comply with its terms. For a Proposal to succeed, it will generally have to be in a situation where at least one of the following is applicable: You have steady employment which provides a level of income above that necessary for normal living requirements. Third parties, such as parents, are prepared to provide funding or guarantees for the proposal settlement. Certain assets which may not be available to the creditors in a bankruptcy proceeding are voluntarily offered as part of the proposal. There have been no fraudulent or irregular dispositions of property. The Bankruptcy & Insolvency Act includes 2 types of Proposals: Consumer Proposals Ordinary Proposals 14
What is the Difference Between a Consumer Proposal and an Ordinary Proposal? A Consumer Proposal is a streamlined proposal process that is available to debtors whose total debts do not exceed $75,000 (excluding the mortgage on their personal residence). This type of proposal does not require a creditors meeting, unless requested by the creditors, and there is no automatic bankruptcy if the creditors turn down the proposal. An Ordinary Proposal applies to debtors who owe more than $75,000. In this case there must be a creditors meeting and if the Proposal is not accepted by the required majority of creditors, then the person filing the Proposal automatically becomes bankrupt. What Kind of Counselling is Available to Help Me Choose the Best Alternative? We would be pleased to arrange for a free consultation by telephone or in person, to help you determine whether a proposal is right for you. How Much Does a Proposal Cost? The Trustee s fees for a Consumer Proposal are set by the Bankruptcy & Insolvency Act and are based upon the amount of funds paid to the Trustee under the Proposal. If you file an Ordinary Proposal, there is usually more work for the Trustee to do and the Trustee s fee is normally based upon the number of hours spent by the Trustee s staff at normal billing rates. Costs will vary depending upon the complexity of the Proposal proceedings, and can be paid for out of funds paid to the Trustee under the Proposal or by way of separate arrangements with you. 15
Closing Summary This booklet is not intended to provide a complete and precise statement of the Personal Bankruptcy process nor the various solutions available through a Proposal under the Bankruptcy & Insolvency Act. It is intended to provide a general overview, in simple terms, using ordinary language. There is much to consider in making your decision and we would be pleased to assist you. Please feel free to contact us with any questions on the information in this booklet or any concerns you may have about the options or process. A.C. Poirier & Associates Inc. 16
Glossary Assets.........................Property (cash, furniture, automobile, etc.) available to meet debts or having a useful value to its owner. Exemptions from seizure of certain assets by creditors is provided for under provincial legislation. Co-signer......................A person signing jointly with others to guarantee the payment of a debt or obligation. Each co-signer may be responsible for payment in full of the total obligation. Credit Rating..................A record of an individual s historical credit worthiness and payment record. Various credit bureaus maintain and update such records, providing this information to financial institutions and other businesses. Garnishment...................The legal proceeding by a creditor to seize a bank account, wages, or other monies due to a debtor. Judgment......................This is a formal decision, or Order of a Court deciding a lawsuit, and will state the Court s decision on the amount of a creditor(s) claim against a debtor. This constitutes final legal proof that a creditor s claim against a debtor is proper and permits the creditor to continue with further legal action to collect its debt. Statement of Claim.............A document filed with the Court by a creditor to start formal legal proceedings. It will usually outline the reasons why a person is being sued and provide some explanation of the debt or other damages claimed. Surplus Income Payments.......Immediately after declaring bankruptcy, an insolvent debtor will no longer be required to make payments to creditors. However, as long as the bankrupt remains undischarged, he or she may be expected to pay to the Trustee a portion of any income that exceeds reasonable living expenses. The payments are based upon guidelines issued yearly by the Superintendent of Bankruptcy. If a bankrupt has surplus income and fails to make voluntary payments to the Trustee, the Court may order such payment or delay the discharge from bankruptcy. Tax Returns & Credits..........Personal income tax returns of the person making an assignment in bankruptcy or a proposal are required to be filed by the Income Tax Act. Credits are for G.S.T. rebates, etc. that the person may be eligible to receive on filing a tax return. Trustee or Administrator s Fees...Fees paid to a person who is licensed as a Trustee or appointed as an Administrator under the Bankruptcy & Insolvency Act. These fees represent the cost of certain services provided by the Trustee or Administrator to debtors utilizing their services. Fees are usually set by tariff or scrutinized for reasonableness by the Court or the Superintendent of Bankruptcy. 17
A.C. POIRIER & ASSOCIATES INC. F r e s h S t a r t W o r k b o o k Notes
Fresh Start Workbook MY INFORMATION Family Name All Given Names M F Are you known by any other names? Maiden Name Street, Apt #, etc When Moved There YY/MM City Province Postal Code How long have you lived in this province? Previous address (If at current address for less than one year) Mailing Address (If different from above) Telephone numbers (Include area code) Residence: Work: / / Social Insurance Number Date of Birth (YY/MM/D) Marital Status: Married Single Widowed Divorced Common-law Separated Date of Separation: Occupation Current Employer Since when (YY/MM/D) Address of Employer If unemployed, Since when MY PARTNER S INFORMATION Family Name All Given Names M F Are you known by any other names? Maiden Name Street, Apt #, etc When Moved There YY/MM City Province Postal Code How long have you lived in this province? Previous address (If at current address for less than one year) Mailing Address (If different from above) Telephone numbers (Include area code) Residence: Work: / / Social Insurance Number Date of Birth (YY/MM/D) Marital Status: Married Single Widowed Divorced Common-law Separated Date of Separation: Occupation Current Employer Since when (YY/MM/D) Address of Employer If unemployed, Since when Partner also filing for bankruptcy? Yes No 1
A.C. POIRIER & ASSOCIATES INC. F r e s h S t a r t W o r k b o o k Assets (things you own) Cash on Hand / In Bank Stocks, Bonds, Investments RESP's, RRSP S, RRIF s Pension Plans Cash Surrender Value of Insurance Policies (attach copies) Name of Insurance Company Policy Number Name of Insured Name of Beneficiary Household Goods & Personal Effects See Page 3 Real Estate (insert address) House Cottage Land Rental / Business Properties Mobile Home/Minihome Make Model Year Serial Number Motorized Vehicles Cars (insert make, model and year) Truck(s) (insert make, model and year) Motor Cycle(s) (insert make, model and year) Boat(s) (insert make, model and year) Trailer(s) (insert make, model and year) Snowmobile, Quad(s), Etc. (insert make, model and year) Tools of Trade See Page 3 Other Description/Location Estimated This asset belongs to Value Me ( ) My Partner ( ) Both ( ) 2
F r e s h S t a r t W o r k b o o k A.C. POIRIER & ASSOCIATES INC. DEPENDENTS (all those who rely on you for financial support) Full Name Relationship Date of Birth Address HOUSEHOLD GOODS & PERSONAL EFFECTS (FOR YOU AND YOUR PARTNER TOGETHER): Check items in your possession and indicate the estimated value if you were to sell by auction or at a garage sale 1. Appliances $ 2. Furniture $ 3. Stereo & other Electronic Equipment $ 4. Computer $ 5. Other $ TOTAL ESTIMATED VALUE $ TOOLS OF TRADE (Please list below) Mine Description $ $ $ $ $ My Partner s Description $ $ $ $ $ TOTAL ESTIMATED VALUE $ $ FOR WHICH YEAR WAS YOUR LAST TAX RETURN FILED? Me My Partner IF YOU HAVE DEBT OWING TO REVENUE CANADA, PLEASE DESCRIBE CIRCUMSTANCES (eg. director s liability, self employed earnings) Me My Partner 3
LIST ALL DEBTS. If sufficient space is not provided here, please continue list on a separate piece of paper and attach 4 This Debt is Business Estimated Complete Names of All Creditors Mine My Partner s Both Complete Address (include postal code) debt? Account Number Amount Owing ($) ( ) ( ) ( ) Y/N A.C. POIRIER & ASSOCIATES INC. F r e s h S t a r t W o r k b o o k
LIST ALL DEBTS. If sufficient space is not provided here, please continue list on a separate piece of paper and attach This Debt is Business Estimated Complete Names of All Creditors Mine My Partner s Both Complete Address (include postal code) debt? Account Number Amount Owing ($) ( ) ( ) ( ) Y/N F r e s h S t a r t W o r k b o o k A.C. POIRIER & ASSOCIATES INC. 5
A.C. POIRIER & ASSOCIATES INC. F r e s h S t a r t W o r k b o o k MONTHLY INCOME AND EXPENSE BUDGET FOR MY HOUSEHOLD (ie: After Bankruptcy) Net Monthly Income My Information My Partner s Information Net Salary (take home) $ Pensions/Annuities $ Family Allowance $ Alimony/Child Support $ Employment Insurance Benefits $ Social Assistance $ Rental Income $ Other Income Specify $ A SUBTOTAL $ A + = Non-discretionary Expenses Child Support Payments $ Spousal Support Payments $ Childcare (Babysitting) Expenses $ Health-Related Expenses $ Employment-Related Expenses $ AB SUBTOTAL $ B + = MONTHLY DISCRETIONARY EXPENSE BUDGET (Family unit) Household Expenses: Rent/Mortgage Living Expenses: Food/Grocery Property Taxes/Condo fees Laundry/Dry Cleaning Heating/Gas/Oil Grooming/Toiletries Telephone Clothing Cable/Satellite Other (insert description) Hydro Transportation Expenses: Water Car lease/payments Furniture Repair/Maintenance/Gas Other (insert description) Public Transportation Personal Expenses: Other (insert description) Smoking Insurance Expenses: Alcohol Vehicle Dining/Lunches/Restaurants House Entertainment/Sports Furniture/Contents Gifts/Charitable Donations Life Allowances Other Other (insert description) (insert description) Payments: Non-Recoverable Medical Expenses: To the Trustee Prescriptions Dental To secured creditor (Other than mortgage and vehicle) Other Other (insert description) (insert description) C TOTAL MONTHLY DISCRETIONARY EXPENSES (Family unit) C SURPLUS OR DEFICIT (A-B-C) = = 6
F r e s h S t a r t W o r k b o o k A.C. POIRIER & ASSOCIATES INC. MY INFORMATION ALL EMPLOYERS FOR THE LAST YEAR (YY/MM) (YY/MM) Employer s Name Address Date Started Date Ended Have you received Social assistance during the past year? Yes When? No Total amount received DO YOU HAVE ANY DEBTS ARISING FROM Fine or Penalty Imposed by the Court Bail Bond Fraud, Embezzlement, Misappropriation Obtaining Property by False Pretenses or Fraudulent Misrepresentation Employment Insurance Overpayments MY PARTNER S INFORMATION ALL EMPLOYERS FOR THE LAST YEAR (YY/MM) (YY/MM) Employer s Name Address Date Started Date Ended Have you received Social assistance during the past year? Yes When? No Total amount received DO YOU HAVE ANY DEBTS ARISING FROM Fine or Penalty Imposed by the Court Bail Bond Fraud, Embezzlement, Misappropriation Obtaining Property by False Pretenses or Fraudulent Misrepresentation Employment Insurance Overpayments 7
A.C. POIRIER & ASSOCIATES INC. F r e s h S t a r t W o r k b o o k My Business Information Have you owned or had an interest in a business in the last five years? If yes Corporation Proprietorship Partnership Name of Business Nature of Business Your Title/Role Location of Business When Commenced When Ceased Does the business have any assets? If Yes, please list If No, what happened to them? H.S.T. Account No.: Have you filed all of the required H.S.T. Returns? If No, you will be required to bring your H.S.T. returns up to date. Which ones are outstanding, and why: Source Deduction Account No.; Required T4 s Prepared? Where are the Accounting Records? Where are the Payroll Records? 8
F r e s h S t a r t W o r k b o o k A.C. POIRIER & ASSOCIATES INC. My Partner s Business Information Have you owned or had an interest in a business in the last five years? If yes Corporation Proprietorship Partnership Name of Business Nature of Business Your Title/Role Location of Business When Commenced When Ceased Does the business have any assets? If Yes, please list If No, what happened to them? H.S.T. Account No.: Have you filed all of the required H.S.T. Returns? If No, you will be required to bring your H.S.T. return up to date. Which ones are outstanding, and why: Source Deduction Account No.; Required T4 s Prepared? Where are the Accounting Records? Where are the Payroll Records? 9
A.C. POIRIER & ASSOCIATES INC. F r e s h S t a r t W o r k b o o k My Recent Transactions Have you disposed of or transferred any assets in the past twelve months? If yes, specify asset, approximate date, net proceeds and disposition of proceeds: Have you made payments in excess of regular payments to a creditor in the past twelve months? If yes, give details below: Have you had any assets seized by any creditor within the past twelve months? If yes, give details below: Have you sold or transferred any real estate in the past five years? If yes, specify asset, approximate date, net proceeds and disposition of proceeds: Have you made any gift to a relative or other person that were of a value in excess of $500.00 in the past five years? If yes, give details below: 10
F r e s h S t a r t W o r k b o o k A.C. POIRIER & ASSOCIATES INC. My Partner s Recent Transactions Have you disposed of or transferred any assets in the past twelve months? If yes, specify asset, approximate date, net proceeds and disposition of proceeds: Have you made payments in excess of regular payments to a creditor in the past twelve months? If yes, give details below: Have you had any assets seized by any creditor within the past twelve months? If yes, give details below: Have you sold or transferred any real estate in the past five years? If yes, specify asset, approximate date, net proceeds and disposition of proceeds: Have you made any gift to a relative or other person that were of a value in excess of $500.00 in the past five years? If yes, give details below: 11
A.C. POIRIER & ASSOCIATES INC. F r e s h S t a r t W o r k b o o k My Supplementary Personal Data Are you involved in civil litigation from which you may receive monies or property? If yes, give details below: Has anyone left you an inheritance, which you have not yet received? If yes, give details below: Are there any writs, judgments or garnishments outstanding against you? If yes, give details below: Have you obtained credit in the last three months? If yes, give details below: Have you used your credit cards in the last three months? If yes, give details below: 12
F r e s h S t a r t W o r k b o o k A.C. POIRIER & ASSOCIATES INC. My Partner s Supplementary Personal Data Are you involved in civil litigation from which you may receive monies or property? If yes, give details below: Has anyone left you an inheritance, which you have not yet received? If yes, give details below: Are there any writs, judgments or garnishments outstanding against you? If yes, give details below: Have you obtained credit in the last three months? If yes, give details below: Have you used your credit cards in the last three months? If yes, give details below: 13
A.C. POIRIER & ASSOCIATES INC. F r e s h S t a r t W o r k b o o k Me My Partner 1. Are your vehicles or other assets insured? 2. Has anyone co-signed any of your outstanding debts? If yes, give details below. 3. Have you co-signed for anyone elses debt? If yes, give details below. 4. Do you have a safety deposit box?. 5. Does your partner own any assets? If yes, give details below. Student Loans Mine (Fill this in only if you have a Student Loan) The date you last attended school Institution Attended Have you taken any courses since then? If yes, when? My Partner s (Fill this in only if your partner has a Student Loan) The date you last attended school Institution Attended Have you taken any courses since then? If yes, when? * Please make sure the Student Loan is on your creditors list on page 4 Causes of Insolvency Describe what, in your opinion, caused the current financial problems for you and your partner: 14
F r e s h S t a r t W o r k b o o k A.C. POIRIER & ASSOCIATES INC. My Previous Insolvency Data Have you previously been bankrupt or made a proposal to your creditors? What was your name at that time? If Yes, please provide the following details: Name of Trustee or Administrator Date of Bankruptcy/Proposal City Bankruptcy/Proposal was Filed Date of Discharge/Certificate of full Performance Please provide a Brief Description of the causes of your first bankruptcy/proposal: YOU CANNOT FILE ANOTHER BANKRUPTCY/PROPOSAL IF YOU HAVEN T BEEN DISCHARGED FROM YOUR PRIOR BANKRUPTCY/PROPOSAL My Partner s Previous Insolvency Data Have you previously been bankrupt or made a proposal to your creditors? What was your name at that time? If Yes, please provide the following details: Name of Trustee or Administrator Date of Bankruptcy/Proposal City Bankruptcy/Proposal was Filed Date of Discharge/Certificate of full Performance Please provide a Brief Description of the causes of your first bankruptcy/proposal: 15
A.C. POIRIER & ASSOCIATES INC. F r e s h S t a r t W o r k b o o k My Banking Information Please provide the following details concerning your current bank account. If you have more than one account, provide the same information for those accounts on a separate sheet of paper. Name of Bank: Account Number: Do you owe this bank any of the following: Mortgage Loans Overdraft Line of Credit Credit Card Do you have any automatic deposits to this account? Yes No Do you have any automatic withdrawals to this account? Yes No Are any post-dated cheques outstanding on this account Yes No If you owe your current banking institution money, they will receive a notice of your bankruptcy and they may close or freeze your account. You must open a new account in a banking institution to which you do not owe money as soon as possible My Partner s Banking Information Please provide the following details concerning your current bank account. If you have more than one account, provide the same information for those accounts on a separate sheet of paper. Name of Bank: Account Number: Do you owe this bank any of the following: Mortgage Loans Overdraft Line of Credit Credit Card Do you have any automatic deposits to this account? Yes No Do you have any automatic withdrawals to this account? Yes No Are any post-dated cheques outstanding on this account Yes No If you owe your current banking institution money, they will receive a notice of your bankruptcy and they may close or freeze your account. You must open a new account in a banking institution to which you do not owe money as soon as possible PLEASE UNDERSTAND THAT A STATEMENT OF YOUR FINANCIAL AFFAIRS WILL BE PREPARED FROM THE INFORMATION YOU SUPPLIED ON THIS APPLICATION AND THAT STATEMENT MUST BE SWORN BY YOU UNDER OATH AS BEING, TO THE BEST OF YOUR KNOWLEDGE AND BELIEF, A FULL TRUE AND COMPLETE STATEMENT OF YOUR FINANCIAL AFFAIRS. I hereby certify that the information contained in this application is true and complete in every respect and fully discloses the state of my affairs. In addition, I recognize that any income in excess of a reasonable cost of living must be paid to the Trustee for the general benefit of the creditors. I further acknowledge that I have read the Fresh Start Booklet. Date My Signature Date My PartnerÕs Signature 16
For your convenience you can make your monthly payments for the basic costs or any other matter agreed upon by PRE-AUTHORIZED WITHDRAWAL FROM YOUR BANK ACCOUNT Please attach a "void" cheque to this form OR Have the bank you will be dealing with fill in the following information on this form. Make sure that this information relates to your new bank account and not an account you are planning to close. Send us the form with your completed Fresh Start Workbook No funds will be taken from your bank account until you come in and sign your documents but if we have this information now it will make it easier when you come in to sign your papers. Your Name Name of Bank Address of Bank MY AUTOMATIC DEBIT FORM Branch (3 digit #) Transit (5 digit #) Account # Your Name Name of Bank Address of Bank MY PARTNER'S AUTOMATIC DEBIT FORM Branch (3 digit #) Transit (5 digit #) Account #
A.C. POIRIER & ASSOCIATES INC. With offices throughout New Brunswick and Prince Edward Island From Anywhere in Atlantic Canada (No charge) Dial 1-888-455-6060 You can also call our automated Bankruptcy Line for information concerning personal bankruptcy. No charge dial 1-888-364-3333