Bankruptcy Reform: Bill C-55, The New Rules

	Bankruptcy Reform: Bill C-55 - Money Problems Radio Show (Opens in a new window. Optimized for Windows Media Player 6.4 and later versions.)
Originally aired on January 14, 2006.

Show Topic:

Just before the government was defeated in November, 2005, prior to the 2006 election, all parties in the House of Commons voted to pass Bill C-55, Canada's bankruptcy reform legislation. With the call of the election, the passing of this bill got lost in the news, so the average person has no idea that the bill was passed, so of course the average person has no idea what rules are changing.

As we will learn on today' show, many important rules are changing, and for some people it may be wise, if you are considering bankruptcy, to go bankrupt before the new rules become law in the middle of 2006. For other people, it may be better to wait until the new rules become law.

Guests:

Douglas Hoyes and Ted Michalos are the founders of Hoyes, Michalos & Associates Inc, one of Ontario's leading personal insolvency firms. They emphasize a "fresh start" when dealing with money problems. They can be reached at www.hoyes.com or, in Ontario, at 310-PLAN (no area code required).

Show Summary:

Under the existing bankruptcy rules, a bankruptcy lasts for a minimum of nine months. Under the new rules, if a bankrupt has “surplus income” the bankruptcy will last for a minimum of 21 months, longer it you have been bankrupt before. Your trustee will explain how to calculate surplus income.

Under the new rules, student loans will be automatically discharged in a bankruptcy if they are 7 years old (instead of the current 10 year rule).

Significant tax debt may extend the bankruptcy period.

Question of the Week:

Q. If someone is having financial problems, how do they know if they should go bankrupt now, or wait until the new rules are in effect?

A. The answer will depend on each individual's situation. In general terms:

	Under the new rules if you have income over the limits set by the government, your bankruptcy may last longer than it would under the old rules.
	People with large tax debts will also find longer lasting bankruptcies.
	However, you may get to keep your RRSP when you go bankrupt under the new rules, and it will be easier to discharge certain student loans under the new rules.

Here are some great links to help you:

	Information on student loans and bankruptcy in Canada
	Further details on bankruptcy reform in Canada
	Hoyes-Michalos commentary on bankruptcy reform and Bill C-55

Don't let your Money Problems overwhelm you; contact a bankruptcy expert today for more information on Bill C-55, Canada's bankruptcy reform legislation.