Bankruptcy Amendments in Canada
In August 2009 several new bankruptcy amendments were pushed through the Canadian Government and on September 18 2009 they became active as new Canadian Bankruptcy Law.
The changes are making a lot of headlines, mostly because they make filing bankruptcy more difficult and they make the length of a bankruptcy twice as long for many bankrupts.
Here is a break down of the changes to bankruptcy law in Canada:
Double Bankruptcy – In Canada multiple bankrupts will now be required to spend a full three years in Bankruptcy
Consumer Proposal - The consumer proposal debt limit has risen from $75,000 to $250,000*, opening up the option of a consumer proposal to many more Canadians
Income Tax – Canadian’s with income tax debt exceeding $200,000 (where the tax debt is 75% or more of their total debt) require a court appointed discharge from bankruptcy
Secured Lenders – Secured lenders (such as car lenders) cannot terminate a well paid finance contractor when their customer files bankruptcy
Surplus Income – Canadians makingmorre than $200 about the bankruptcy monthly income limit must now follow surplus income requirements and make a full 21 months of bankruptcy payments (bankruptcy discharge is delay from 9 months to 21 months)
While its too soon to tell how these changes to bankruptcy law will affect bankruptcy numbers in Canada, one thing is for sure – they will affect bankruptcy for many!
* The new bankruptcy law that raises the consumer proposal debt limit to $250,000 excludes mortgage debt from principals residences
