Bankruptcy Kitchener Blog by Scott Schaefer

One concern that people have when they are considering filing for personal bankruptcy is the impact on their job. 

For most of the individuals I meet with, a personal bankruptcy will not have any impact on their employment and generally their employers will not find out about the bankruptcy.  Below are a few situations when an employer would find out about an employee filing for bankruptcy:

i) if there is a garnishment on the individual’s pay, then the Trustee would have to notify the employer to have the garnishment stopped,

ii) if the individual does not provide the required tax information to complete any outstanding tax returns, then the employer maybe contacted to obtain the information, and

iii) if the individual is required under their employment contract to notify the employer of a personal bankruptcy filing.

Were it becomes more complex is when there are other professional standards or industry regulations involved.  These include insurance agents, real estate agents, accountants, lawyers, etc.  The professional standards related to the professions above along with industry regulations could impact the individual’s ability to file a personal bankruptcy without a negative consequence.  But a consumer proposal may then be the more viable option to deal with the debts and limit the impact on someone’s employment.

If you are having financial difficulty and want to review you options, please call us at 310-PLAN or e-mail us.  If you are with a larger organization, you may want to contact your Human Resource Department unanimously to discuss the impact on your employment.

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Today I met with a single lady and her teenage daughter in our Kitchener office.  She had been recently struggling with her debts, primarily do to her reaching the limits on her credit cards.  She is renting an apartment for a reasonable amount.  Her income is based on hourly rates and she nets $1,850 per month.  She has never received support for her child.

Often her cost of living exceeded her income and she therefore used her credit cards to make it by.  Now with interest, her credit cards have become too large to manage.  She has 3 credit cards that total $22,000.  The stress of the situation increased when she took some time off work and as a result, did not get paid for those days.

We sat down and reviewed her options.  Personal bankruptcy was the option she chose, although she was embarrassed about having to file, she realized that the Bankruptcy and Insolvency Act is available to give the honest but unfortunate debtor a fresh start.  Her focus was on her and her daughter living on the income they have.

The duties she will have during her 9 months of bankruptcy are: she will have pay $160 per month into the bankruptcy, complete monthly income and expenses statements, attend two one-on-one credit counselling sessions and if her income exceeds $2,237 her payments will increase (referred to as surplus income).  After all of her duties are completed, she will be eligible for a discharge from bankruptcy.

If you are experiencing financial hardship and want to review your options, call me at 310-PLAN or via e-mail.

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