The title of today's Brandon's Blog is Suspension Of Discharge From Bankruptcy:
Our Complete Guide On Bankruptcy Discharge.
On September of this year, the Court of King's Bench of Alberta,
it's going to take us a little while
to get used to that, now that there's a King and no longer a Queen,
and this case dealt with a bankruptcy application for discharge.
And there was nothing very complicated about it.
But Brandon thought that it really
in a simple way,
epitomizes the balance and the fairness the Court strives for in balancing
the rights and responsibilities of the bankrupt and
the right of the bankrupt to ultimately
receive a discharge from bankruptcy with the rights and expectations
of the creditors from the Canadian bankruptcy process.
My name is Ira Smith, president of
ira Smith Trustee & Receiver Inc.
Both Brandon Smith and myself are available to answer any questions you may
have either about this Brandon's Blog or anything else at all.
So shoot us a message, give us a phone call.
We would love to speak with you.
I hope you can watch until the end of this
video because I know you will find it informative.
In this blog, Brandon first discusses
what a bankruptcy discharge is and what it means for the bankrupt.
Next, he goes on to discuss when can a bankrupt
person be discharged, and it depends whether it's their first
time bankruptcy or second or third time bankruptcy, and whether or not they have
a surplus income requirement to make payment to the bankruptcy estate.
And Brandon goes through all those permutations and combinations below.
Then he discusses what happens when a bankruptcy application for discharge is
challenged either by the Trustee or by one or more creditors.
And why would a Trustee or a creditor
challenge the bankrupt's application for discharge?
Next, Brandon goes through the different types of bankruptcy discharges,
be it an automatic, an absolute
conditional, a suspension, or a refusal.
Brandon goes through all of those
different types and explains what they mean.
Brandon then discusses the five types of debt that are not dischargeable
in anyone's personal bankruptcy, and he lists them down below.
He then gets into the case and describes the case of a woman who went bankrupt
after ten years of litigation that she started
against her siblings, trying to overturn her father's will
and get a larger share of the deceased estate.
She racked up huge legal fees and also had
cost awards against her because she lost every step of the way in the litigation.
The Court looked at the evidence before it. The Trustee reported that there were
several issues of conduct to be concerned about with this bankruptcy.
There was the racking up of all the legal fees.
There was the fact that she
allowed a charge to go on against her half interest in the matrimonial home,
supposedly a loan from her husband for legal fees.
And third, 13 months before she filed
for bankruptcy, she transferred her interest in the house
to her husband and the Trustee reported on all this.
The court looked at all this and said, it highly doubted all those loans were made
to her because she has all these outstanding legal fees.
Secondly, although the transfer of the house under
one statute was outside of the automatic period,
the Trustee can go and attack that transaction.
There were other possible avenues
of attack, but there were no funds in the estate to launch that attack.
And the creditors also stated as a reason
for opposition that this bankrupt could have tried to make a proposal but didn't.
And the court agreed with that. So,
looking it all over and trying to find fairness,
equity and balance,
the court essentially calculated what her
net equity in the matrimonial home was at the time of the transfer
and looked at her income and made a conditional order.
The condition being that she's going to have to pay $2,000 a month
on top of what she already paid in in surplus income.
So that there would be a total pot of $120,000.
Which was roughly equal to what her equity
was in the half interest in the matrimonial home.
And so the court ended up requiring her to make the payments she would have made
in what could have been a successful proposal.
And she is not entitled to her bankruptcy discharge until she makes all those
payments to the Trustee for the benefit of the creditors.
So I hope you can read the entire
Brandon's Blog below because I know you will get value from it.
Again, both Brandon Smith and myself are available to answer any questions you may
have either about this Brandon's Blog or anything else at all.
So shoot us a message,
give us a phone call, we would love to speak with him here.