Canadian Bankruptcy Reform - Changes to the Bankruptcy Laws.

The last round of bankruptcy reforms went into effect on September 18, 2009, With following major changes:

Bankruptcy Discharge Rules. In force on September 18, 2009.

This calculator will calculate how long you will be in bankruptcy and what it will cost.PointerClick here.

High Income Tax Debt: In force on September 18, 2009.

Dollar Threshold for a Consumer Proposal Is Raised: In force on September 18, 2009.

Preventing Lenders from Cancelling Certain Contracts when a Person Files Bankruptcy or a Proposal. In force on September 18, 2009.

The Wage Earner Protection Program Act (“WEPPA”) and Regulations. Into effect on January 27, 2009.

The WEPP will compensate individuals for amounts earned, but not paid, during the six months preceding the bankruptcy or receivership of their employers under the BIA. The WEPP will help protect workers by providing a guaranteed payment of a maximum of $2,000 in respect of wages, salaries, commissions, vacation pay, severance pay, termination pay or compensation for services rendered, and up to $1,000 in respect of disbursements owing to travelling salespeople incurred should their employer declare bankruptcy. More information can be found at the government website.

Reduction of the student loan discharge period from 10 to seven years. In effect on July 7, 2008.

The student loan amendment is for debtors who stopped being a student for the required 7 years, who obtain their discharge on July 7, 2008 or any date after.

Another amendment that is also in force now relates to the The amendment that will reduce to five years the period a bankrupt will have to wait to make a “hardship” application to have student loan debt or obligation discharged (BIA , s. 178(1.1) is also now in force.  This amendment applies to all debtors notwithstanding when the bankruptcy or the process that results in the bankruptcy is initiated.

Provision of protection of all registered retirement savings plans (RRSP's, RRIF's and DPSP's (Deferred Profit Sharing Plans). In force on July 7, 2008.