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I wanted to get some info straight. I am looking to file for bankruptcy and I have debt with CMHC. I was told be the collection agency for CMHC that you cannot go bankrupt on a federal dept like CMHC but when I went to see a trustee, he said I can. Who’s right?

As well, I was told I can keep my secured credit card that is in good standing and only a limit of $300 but the Trustee says no, I can’t have a credit card in my name till I’m discarged…is he correct?

I also have a 6 year old student loan…half is through the Canadian government and the other half is a provincial loan (through NB), I was told I can’t file on the federal but I can on the provincial portion but the Trustee said no…who’s right??

FYI, I live in Alberta.

3 Responses to “CMHC Debt”

Barton Goth, GCO Inc. Bankruptcy Trustees said...

In all instances the trustee is correct. CMHC debt can be cleared through the filing of a bankruptcy. Student loans, unless more than 10 years had elapsed since you last attended school, are not released through the filing of a bankruptcy. When you file bankruptcy you are not able to retain any credit cards.

However, there is one exception to the credit card rule. The directive that deals with this stipulates that no obligation to deliver credit cards if the “issuer or the third party has authorized the bankrupt to continue to possess and use the card.” So if you are able to get a letter from the lending institution providing you with permission to retain the card after bankruptcy, then the card is yours to keep.

Anonymous said...

Normally secured cards need money to be held as collateral. Doesn’t this money need to be handed over to the trustee?

Barton Goth, GCO Inc. Bankruptcy Trustees said...

This depends on whether or not there is money owing on the card at time of bankruptcy (the difficulty I find is many people say “good standing” and mean payments are up to date, not that there is no balance owing). Otherwise you are correct, if there is no balance the GIC woould be considered a non-exempt asset that would be lost in a bankruptcy.