I appeared this morning for a live interview on the morning show on 900 CHML with with Shiona Thompson and Bob Bratina to talk about changes to the personal bankruptcy rules that take effect on September 18, 2009. I always enjoy appearing with Bob and Shiona; they do their research and always ask good questions. Click here to hear Doug Hoyes on the CHML Morning News discussing The New Bankruptcy Rules
I explained that under the old rules most first time bankruptcies ended in nine months. Under the new rules, if you have more than $200 in surplus income each month your bankruptcy is automatically extended for a further 12 months, so you are bankrupt for 21 months in total, and you are required to make your surplus income payments for the full 21 months. Obviously for many people this will more than double the cost of bankruptcy.
Bob and Shiona asked me why the government made this change. I said I didn’t know, but I can only assume it’s to encourage more people to avoid bankruptcy and file a consumer proposal instead. Under the new rules you can file a consumer proposal even if your total debts, not including the mortgage on your principal residence are up to $250,000, so I suspect that a greater number of Hamilton residents in the future will choose to file a consumer proposal.
We ran into a commercial break, so in an unusual move Bob asked me to stay for a second segment. When I returned, he asked me about student loans, and I explained that under the new rules if you have been out of school for more than seven years your student loan is automatically discharged in a bankruptcy, or a consumer proposal.
What does all of this mean? If you are in debt, you need to deal with a firm that understands the new rules, and can advise you on your best options. Our team in Hamilton, lead by Billy Martell and Wendy Young, is fully briefed on the new rules, and they are ready to help you with your questions, so give us a call in Hamilton today at 310-PLAN, or e-mail us today, and let’s get started.
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