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If you have unsecured debt of under $10,000 and live in the Province of Ontario filing bankruptcy may not be the best option for you. We suggest you contact the Office of the Superintendent of Bankruptcy at 416-973-6441 to discuss your options, or you can visit their website here.

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Cross border debts and assets

I have both assets and debts in the U.S and Canada. I have about 30,000 dollars in unsecured U.S debt with 10,000 dollars in cash. In Canada I have 50,000 dollars in equity in my home and 120,000 dollar unsecured debt. I currently work in the U.S and rent an apartment there. My wife and kids stay in my house in Canada.

Can I declare bankruptcy in Canada? If I declare bankruptcy in Canada , how are the assets and debt handled?

I want to protect the house if possible. Can I get a loan in the U.S and pay the trustee the 50,000 dollars?

I`am keeping the U.S debt current but the Canadian debt has been in default for 9 months. How much of a problem will that cause?

Posted from: Ontario

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One Response to “Cross border debts and assets”

Barton Goth GCO Bankruptcy Trustees said...

Yes you can file a bankruptcy in Canada, the only catch is that it cannot clear you from your US debts. While you legally must list all your debts (including those in the US) the Canadian legislation does not have the ability to release you from debts that are are not under their control.

In terms of the house, you are right that the trustee will have to realize $50,000 as a result of the non-exempt equity in your house. The easiest way to do this is just as you propose and try to get a loan for the amount of the non-exempt equity and provide this to the trustee. This would effectively allow you to keep the house, the only trick is whether or not you will be able to find that much financing.

In terms of default, this won’t cause you any huge issues, it just means that you should not delay in contacting a local trustee to get the process underway so that the creditors don’t begin to get more aggressive and cause you greater difficulties.