Changes to the Bankruptcy and Insolvency Act (“the BIA”) will come into force on SEPTEMBER 18, Some major amendments being introduced by these amendments include:
Consumer bankrupts: Discharges
- 9 month automatic discharge (release of debts) for first time bankrupts who fulfill all their duties and whose household income is not above standards established by the federal government.
- 21 month automatic discharge (or more at the court’s discretion) for first time bankrupts who fulfill all their duties and whose household income is in excess of standards established by the federal government.
- 24 month automatic discharge for second time bankrupts who fulfill all their duties and whose household income is not above standards established by the federal government.
- 36 month automatic discharge for second time bankrupts who fulfill all their duties and whose household income is in excess of standards established by the federal government.
- Individuals who file for bankruptcy for a third or subsequent time, or whose discharge is opposed for any reason, will still have to go through the Courts to be granted a discharge.
Consumer bankrupts: Tax Debt
- Bankrupt individuals with more than $200,000 in personal income tax debts representing 75% 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.
Consumer Proposals
- Under current law, a consumer debtor who is insolvent and whose debts are less than $75,000 excluding their home mortgage can file a consumer proposal as a debt solution. Under the new legislation, this threshold will be increased from $75,000 to $250,000.
As a result of these changes, keep in mind that the conversation you had with a Trustee before September 18th may be very different than a conversation on or after September 18th.
For a complete list of changes, refer to Industry Canada’s website.
Tags: Bankruptcy, insolvency act