CBB

Upon filing bankruptcy, with certain exceptions noted below, your interest in any property or assets vests in us, as Trustee. We become the legal owner of the assets and property. This applies whether the assets are in your possession or the possession of a third party. We will take steps to sell the assets and turn them into cash. In certain circumstances, we may agree to return ownership of assets to you provided adequate payment arrangements are made.

Under provincial law, certain assets are exempt from seizure and do not vest in the Trustee. You are permitted to retain possession of exempt assets up to the prescribed dollar limit. For example, in Ontario, you are permitted to retain possession of: personal items ($5,650); furniture and household belongings ($11,300); tools and equipment ordinarily used in the bankrupt’s business or profession ($11,300), and a motor vehicle ($5,650).  You are also permitted to retain your RRSP and RIF accounts with the exception of contributions made in the year preceding the bankruptcy.

If an asset is mortgaged or encumbered, the secured creditor is permitted to seize and sell it unless you comply with your contractual payment obligations or the arrangements that may be agreed to.

As Trustee, we must prepare a pre-bankruptcy income tax return for the period January 1st to they day before the date of bankruptcy.  The Trustee will retain refunds from this return and possibly prior years’ returns (if the prior returns have not been previously filed and the refunds have not been already received prior to filing for bankruptcy).  A post-bankruptcy return will also be prepared for the period from the date of bankruptcy to December 31st.  Refunds from this return will also be paid to us.  You will be responsible for the payment of any balance owed on the post-bankruptcy return.

Once you declare bankruptcy, Canada Revenue Agency will mail GST refunds to us until we are discharged as Trustee.  We will retain the GST refunds until there are sufficient funds in the bankruptcy estate (from GST and all other sources) to pay the prescribed amount of Trustee’s fees.  If applicable, any excess GST refunds will be refunded to you upon the Trustee’s discharge.

All windfalls, such as lottery winnings and inheritances that you receive or become entitled to prior to your dischage from bankruptcy must be given to the Trustee.  If there is a surplus of funds after paymnet of the creditors’ claims, and the Trustee’s fees and disbursements, it will be paid to you.