Finally some good news for Canadians facing Bankruptcy

September 28th, 2009 by A Licensed Insolvency Trustee

Apparently it is possible to “Fight City Hall”. Let me explain.

Back on September 14, 2009, five days before the new bankruptcy rules came into force, I posted an article describing the Bad News and Good News from the new bankruptcy rules. One of my biggest complaints about the new rules was a new disclosure requirement; here’s my quote from that post:

I also worry that the government has introduced new disclosure requirements. Now, when you go bankrupt in Canada, you are required to disclose your highest level of education. You must now tell the creditors whether or not you graduated from high school or university. Personally, I find this new disclosure requirement offensive. I don’t think whether or not you are a high school graduate is relevant. The creditors need to know what you own and who you owe, but information about your educational background is not necessary for them to evaluate your situation. What’s next? Questions about your ethnic background? Religion? Where does this end?

Think about it: for most people, the decision to declare bankruptcy is very stressful. It’s difficult enough to pull together all of your financial information and make the decision to go bankrupt. It’s even more embarrassing if you have to declare on a sworn statement to your creditors that you didn’t graduate from high school, or that you are a university graduate and still have financial problems. Either way, your education level is completely irrelevant information.

When I first discovered that the government was going to require bankrupts to disclose whether or not they graduated from high school, I was offended, and I took action. As mentioned above I mentioned it on this blog, but I did more than that.

On September 10, after not getting an explanation from anyone at the government, I sent an e-mail to the Superintendent of Bankruptcy himself. Here’s what I said:

My apologies for bothering you with this matter, but I haven’t been able to find anyone else who can give me an answer.

One of the changes resulting from the new bankruptcy rules to be implemented on September 18 is that a bankrupt person must now disclose on their statement of affairs the highest level of education they have received (such as grade 8, attended high school, high school graduate, or university graduate).

We are finding that many bankrupts find this disclosure to be somewhat embarrassing. Either they are embarrassed by their lack of education, or embarrassed that they are educated and still got into financial trouble.

I can’t find anything in the legislation passed by Parliament requiring this disclosure, so I assume this is data that the Office of the Superintendent of Bankruptcy has chosen to gather.

Is that correct?

If so, can one of your staff provide us with the rationale for collecting and distributing this information, so that I can explain it to our bankrupts.

Thanks for your assistance.

About a week later I got an e-mail from a junior staff member saying “we’re working on it”. (That seems to be a typical response from the government, doesn’t it?).

Then, on Saturday morning, I received word that the government had changed their mind and would no longer require this disclosure! Although I’m sure I was the first trustee to raise this issue with the Superintendent’s office, I know that last week many other bankruptcy trustees in Canada also made phone calls to the government to complain about this invasion of privacy, so I can’t take the credit for ending this silly requirement. However, I am proud of my fellow trustees for lobbying the government to change this rule.

Most trustees in Canada are like me: we are obligated to follow the rules, even when we don’t fully agree with them, but we also are willing to speak up when the rules are unfair, and we work to change them.

The new rules are still new, so there will be a lot of learning happening over the next few months as we become familiar with all of the nuances in the new rules. Rest assured, however, if you are in financial trouble a bankruptcy trustee will take the time to explain the rules to you in detail, and help you understand which option is best for you.

Please consult a Canadian bankruptcy trustee to arrange for a no charge initial consultation so that you can understand the rules, and decide which option is best for you and your family.

A Licensed Insolvency Trustee

2 Responses to “Finally some good news for Canadians facing Bankruptcy”



March 17, 2011 at 9:04 pm, Kim said:

Thanks for standing firm on our rights not to disclose information that is not necessary. In this day and age we already give out too much information and it is nice to know you fought for something and actually saw results. Thank you very much for this, even though it was quite awhile ago.



March 17, 2011 at 9:07 pm, Kim said:

Keep on working hard on what you beleive in. I don’t want to give out my personal information to creditors. I am not angry at my creditors, I am not late on payments, but with two motor vehicle accidents this year and all my money gone right now, I am not sure what will happen next. It’s been the hardest year of my life and I have fought to keep my bills paid but if I have trouble in the future I will remember you. Kim

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