Bankruptcy Kitchener Blog by Scott Schaefer

Over the years in Kitchener-Waterloo, many significant business stories have made the news. When business such as Budd Canada, Labatts, Uniroyal Goodrich, Electrohome and Kaufman Footwear first opened their doors they became a huge contributor to the earnings of Kitchener-Waterloo residents but they also became a big news story when they downsized and eventually closed. The impact of this on local families resulted in difficult times for many as they worked to recover from job loss and to find new employment at comparable income levels.

Today, we are experiencing different success stories of companies in the high-tech and insurance industries. With large companies like RIM, Sunlife, Manulife, come many good jobs. These companies are playing key roles in our local economy.

Large companies in their best years offer large amounts of jobs and bring in significant revenue to the community. These jobs allow people to settle into Kitchener-Waterloo by spending their income at local retailers, buying homes, raising families, and participating in the community. It could be said that large companies have helped shape the city into what we have today.

With the business world constantly changing, people have to adapt; change in employment is almost inevitable. The idea of “life-long” employment at one place is a thing of the past. This greatly affects individuals and their families as they try to maintain a secure lifestyle through changes in jobs. When you add a change in employment or a period of time without employment, with the amount of debt that families are carrying, it can be devastating to the family. In fact, job loss or reduction of income is one of the common causes of someone filing a consumer proposal or personal bankruptcy in my Kitchener bankruptcy office.

With RIM’s lay-off announcements over the past week, we are likely going to see people in our community experience job loss and may leave others stressing over future uncertainties. Not to mention the impact on the investments and shares people are holding in RIM stock.

Good, steady paying jobs are vital to keeping a budget balanced. If you are struggling financially due to changes in your employment, periods of time off work, wage cuts, etc and want to discuss options to deal with your debts, give me a call at 519-747-0660 or send me an e-mail.

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One common question I receive when reviewing someone’s financial situation is “can I keep my car in a bankruptcy?” This is an important question for many people living in Kitchener-Waterloo as there are requirements for a vehicle due the geography of the area and the need to be able to get to and from work, school, stores, etc.

The answer is normally “yes” however, there are a few scenarios that need to be considered;
1. The vehicle is owned by the individual without a lien against it, and
2. There is a loan against the vehicle thus resulting in a lien being registered.

Vehicle is owned without a lien:

For cases where the vehicle has been paid for in full and there is no loan or lien against the vehicle, Ontario law allows for a vehicle to be exempt from seizure for a value up to $5,650. That is, if the vehicle was sold by you today, if it is worth less than $5,650, then it is your vehicle to keep and your creditors do not have rights to the vehicle. If the vehicle is worth more than $5,650, the difference above this amount would have to be paid to the trustee in order to keep the vehicle. Therefore you are permitted to keep the vehicle in bankruptcy in this scenario.

Vehicle with a loan/lien against it:

Vehicles are typically a larger expense purchase, so most times people have to finance the purchase through a loan. The lender then has a right to put a lien on the car until the loan is paid off. This lien allows the lender to have first rights to the vehicle in the event you cannot pay for it any more. We refer to this lender as a secured creditor.

If a bankruptcy is filed, you have a right to keep your payments current and on-going to your secured creditors. As long as you do not have payment problems or arrears with the secured lender, they cannot take the vehicle from you if a bankruptcy is filed as the bankruptcy laws restrict any changes to the secured agreement. Therefore, if you feel you can afford to keep the vehicle payments current, then you are allowed to keep the vehicle in bankruptcy. This is also the case for leased vehicles.

If you cannot afford to keep the vehicle, you have a right to surrender it as part of a bankruptcy and then have loan balance included in the bankruptcy.

If you are experiencing financial difficulties and would like to discuss your situation and options, then call me at 519-747-0660 or send me an e-mail. I can meet with you in my Kitchener Waterloo office for a free consultation.

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