bankruptcy mistake
5 YEARS AGO I FILED FOR PERSONAL BANKRUPTCY AS THE BUSINESS WAS UNDER SOLE PROPRIETORSHIP. NEEDLESS TO SAY I NEVER DID HAVE THE MONEY TO PAY FOR THE TRUSTEE AS THERE WAS NO MONEY. IT SEEMS LIKE EVERYTHING I TRY AND DO IN MY LIFE, I HAVE THIS MONKEY ON MY BACK. REVENUE CANADA TO THIS DAY KEEPS ALL MY TAX REFUNDS, I AM UNABLE TO GET CREDIT ANYWHERE. IF I KNEW WHAT BANKRUPTCY DOES TO A PERSON’S LIFE i WOULD HAVE NEVER DONE IT. I SPOKE TO THE TRUSTEE TODAY (5 YRS LATER)and now I have to start all over again as she told me once the papers are signed I have no choice. I now have a good job and they want my returns since I have been working and want to start this all over again. I don’t want to do this at this point in my life. I want this monkey off my back. What are your suggestions and where can I go for help.
We actually discussed whether or not to publish this question – in the end we decided since it happens in about 1 out of 20 of our clients, enough people might want to know the answer to justify posting it.
So you filed an assignment, but you didn’t complete your duties – what are your options?
First, you can go back to your trustee and work out an arrangement to complete the assignment. That may mean providing tax returns and/or other proof of income for the entire period that you’ve been bankrupt (that means from the day you signed the papers), as well as completing your counseling, and likely appearing in Court. I know in my own practice, if someone does a vanishing act for a few years I generally require them to provide details of what they’ve been doing since they filed, then I put them on a program to complete all of their duties as if they were starting the procedure today.
A second option is to file a proposal to your creditors instead of completing the bankruptcy – you will have to convince your trustee that you are committed to the proposal because you can’t file unless your trustee signs-off on it. Frankly, you’ll have to be a pretty good talker to convince a trustee to allow you to do this – based on your prior performance you aren’t a good candidate for a proposal.
A third option is to pay off your debts in full and then apply to the Court to have your bankruptcy annulled (removed from your record). Depending on how long it’s been since your filed and how much money you’ve earned over the years it may actually make more sense to repay the debt than complete the bankruptcy. We see this once or twice a year.
Your final option – remain underground. You’ve lived this long without cleaning things up, maybe you should just go on living this way.
The problem with this final option is that sooner or later the bankruptcy is going to jump up and bite you in the….
Parts of this entry are preachy and judgmental – sorry about that, but what people need to understand is that bankruptcy is a legal procedure. Once you start it, you have to finish it. It is not a “quick fix” for credit problems – its a process that can’t be left undone, at least not if you want to actually deal with your financial problems.