This seems really strange to me, being charged to officially declare yourself broke!

Ok another question then, if thats ok with you guys (more helpful than anyone else I've spoken too, so thanks)? In the uk you can declare yourself bankrupt and at various levels, some where you discuss what you can pay back and start to rebuild a credit rating. Is there something like that in Canada? Bearing in mind that my wife's personal issue are with the tax man. The thing is that her tax bill by itself isn't too bad, we could afford it but all the charges that they add are what's killing us. I thought there would be some flexibility there seeing as they are simply charges and not purchases of physical good. Tax man said no and to get a loan but bearing in mind she was pregnant and unemployed then.

Still, if anyone knows different I'd love to hear it.

I have yet to find one that does not charge up front. Sure, there's a "free" consultation, but they don't tell you anything more than what anyone can find online or at the library.

"I understand, but it costs money to talk to a licensed trustee"

Actually as far as I am aware all trustees will sit down and give you a free consultation.

In fact all debt relief options including debt settlement, credit counselling and bankruptcies offer a free talk and quote on their program.

If they try to charge you money up front to receive an explanation on how it works. Run, do not walk away.

Found this today and thought it might be of interest to those following this topic.. Seems like although the Gov't has raised the consumer proposal limit, under the new rules, if you have never been bankrupt before and if you have surplus income, your bankruptcy will now last for 21 months.

Per: http://www.hoyes.com/new-bankruptcy-rules-in-canada.htm

New Bankruptcy Rules: The Most Significant Changes

Here is a brief summary of the new rules, when they come into force (September 18, 2009):

A consumer proposal may be filed by a person with up to $250,000 in debts, excluding the mortgages on their principal residence; the old limit was $75,000;

Student loans are now automatically discharged after seven years (instead of the current 10 years), and an application may be made to court in hardship cases to have a student loan discharged after five years;

RRSPs are now exempt from seizure by the trustee in a bankruptcy, except for contributions made to the RRSP in the previous year;

You will lose your tax refund for the entire year of the bankruptcy;

Secured loans and leases cannot be terminated simply due to the filing of a proposal or bankruptcy; this means that certain banks that routinely repossess cars upon bankruptcy will no longer be able to do so;

Automatic discharges are now available for all bankrupts (who have completed their counselling) as follows (the bankruptcy period has changed):

a first time bankrupt with no surplus will be bankrupt for 9 months (unless opposed);

a first time bankrupt with surplus will be bankrupt for 21 months (unless opposed);

a second time bankrupt with no surplus will get an automatic discharge after 24 months (unless opposed); and

a second time bankrupt with surplus will get an automatic discharge after 36 months (unless opposed).

Tax debts are now treated differently than all other debts. If the total personal income tax debts are more than $200,000, and if they represent more than 75% of the bankrupt's total unsecured debts, the bankrupt is not eligible for an automatic discharge. A discharge hearing must be held as follows:

First time bankrupts with no surplus - after 9 months;

First time bankrupts with surplus - after 21 months;

Second time bankrupts with no surplus - after 24 months;

Second time bankrupts with surplus - after 36 months;

Third or more time bankrupts - after 36 months.

I understand, but it costs money to talk to a licensed trustee, money we don't have. What is it about the human race that makes it so greedy that people have to make money off of even the poorest of us ... disgusting. People that are truly broke, have no income due to health or other substantial reason and no possessions of any real value should just be able to file for bankruptcy. There are some of us who cannot get on Disability because of debts, and cannot be employed due to disabilities.

That’s a great question, to be honest, bankruptcy is pretty complicated and you really do need to talk to a licensed trustee if that’s the road you are going down.

A friend of mine is a trustee and I don't even fully understand how their fee works. Its all over the place depending on how many times you filed BK, what your income level is and a few other conditions...

I do know bankruptcy laws changed on Sept 18th 2009.

It’s now harder and more expensive to file for bankruptcy and the changes encourage more people to use a consumer proposal which isn’t always a easy or cheap route either; also if the creditors vote against the proposal your next move is of course bankruptcy.

Again talk to a licensed trustee.

Either way, we are noticing here at Total Debt Freedom from people shopping around that folks have been frustrated with the bankruptcy changes made. Even trustees are admitting, it’s now harder for people seeking debt relief to get it from bankruptcy.

Aahh ok thanks. Is their fee based on my income as well then or purely my wife's?

No, you can't put the trustee's fee on your credit card.

When you declare bankruptcy, you have to give up your credit cards. The trustee will determine if your household has surplus income, and then determine her percentage based on the percentage she contributes to the household income. Then they arrange a monthly payment plan.

good luck.

Hi my wife and I are moving to Canada next year. She is Canadian but as she didn't live in Canada she didn't do taxes for a number of years and now the government was a rather ridiculous amount from her along with charging 8% per day. Plus we have a little boy now so she isn't working. The amount is now so hi that she is looking at bankruptcy.
I'm just curious as to if you can put the trustee fee's on your credit card? I'm sure they're wise to it but I've not read anywhere saying that you can't. Then once you're bankrupt then you've not really paid those charges.

If anyone else has advice regarding my wife's situation I'd love to hear it,

Thanks