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Can bankruptcy be annulled?

I was forced into bankruptcy in May.2007 by a bank investment error that cost me $300,000 in damages. The bank was found guilty by the Investment Dealers Association in July 2008 and I was offered a $100,000 settlement offer by the bank, if I signed a document promising not to sue them.

1. Is there any way I can have the bankruptcy annulled, given this new development? I was forced into bankruptcy by the bank`s error, and now that they have finally been found guilty, can the bankruptcy be reversed/annulled?

2. I wish to pursue a more fair/larger settlement offer, but my trustee is reluctant, afraid that the initial offer will be rescinded. Can I have the legal right to sue the bank transferred back to me?
I believe that its not in my best interest to sign an inferior settlement offer.

3. Does a bankrupt person have any legal recourse if they believe the trustee is favouring the creditors over the bankrupt in a complicated situation such as this?

Posted from: Quebec

One Response to “Can bankruptcy be annulled?”

A licensed trustee said...

Certainly bankruptcy can be annulled under the following circumstances:

1) you wer inelligible to file in the first place (ie you really weren’t insolvent when you filed); or

2) if you pay off your debts in full you may apply to the Court to have your bankruptcy annulled; or

3) if you file and your creditors accept a proposal to repay a portion of the debt your bankruptcy will be annulled.

In regards to your trustee being reluctant to pursue other options, well your trustee’s job is to try and maximize the money being repaid to your creditors. If they’ve been offered $100,000 to settle most trustees would take the deal…

When you filed for bankruptcy you signed over your right to sue to your trustee – at this point it is your trustee’s decision, not yours.

If you really want to pursue this further you should hire a lawyer – this is not the sort of thing you should be trying to sort out yourself.