April 15th, 2012 by Questions
we were the owners of a ltd companythat lost all its contract and could not survive ..we were advised to claim personal bankruptcy…we started a new company with my daughter as the director..we now work for this company for a wage..which is just enough to stay under the guideline for a family…now we have been told that revenue canada most likely will not let us discharge this bankruptcy because they will question the amount of money we are living on…and also the fact that the new company has abit of a profit…they will say that it is our business and not my daughters and therefore we are trying to funnel money….the new company is a ltd company and has its legit expenses…including the wage we get….i was told people do this all the time and it is not illegal ..but now im feeling as if we are going to be drug through the ringer..as if we havent gone through enough already…..i would appreciate some conversing on the subject..its difficult to sum up into one question.
Posted from: Alberta
One Response to “sally”
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April 15, 2012 at 6:39 am, A licensed trustee said:
Here is the problem you are running into: it’s referred to as “substance over form”. You are trying to use the law that allows you relief from your debts (the bankruptcy) without paying the full amount that your creditorsd are entitled to (surplus on the businesses earnings).
You are correct that losts of people set up bnew businesses owned by family or firends when they file for bankruptcy, BUT we tell all such clients that they cannot leave any excess profit in the business and therefore protect it from the bankruptcy. In all such cases we tell our clients they should expect to end up in Court and then the Court will decide what they should or should not pay.
You are trying to have your cake and eat it to. If you want releif from your debts then you should pay what you have to pay. Bankruptcy is not a “deal” – it is a process. If you want relief from your debts then you have to play by the rules…