One of the major purposes of Canadian bankruptcy law is to give a person a fresh financial start. Part of that fresh start is to re-establish a good credit rating so the person can fully participate in the Canadian economy.

BankruptcyCanada.com has developed a FREE comprehensive step by step procedure that will rebuild a person’s credit rating in the quickest possible time. The steps will allow a person to get a secured credit card and a car loan shortly after he or she is discharged. Provided the income tests are met, a year after a bankruptcy discharge the person should be able to qualify for most loans at excellent interest rates.

Two years after a bankruptcy discharge the person will be able to get the most difficult credit of all – a mortgage – at the same interest rate, as the most credit worthy person who has never been in bankruptcy.

Full information, including all the forms required, is available at:
http://www.bankruptcycanada.com/Credit-Repair-Canada.htm

The 5 steps towards a good credit rating after a bankruptcy or a consumer proposal are:

Step 1 - Get your Bankruptcy Discharge or the Certificate of Completion for your Consumer Proposal or Division I Proposal.

Step 2 – Clean up your credit. Check your credit report and write to the credit bureau to correct any errors.

Step 3 - Gain New Credit. You now have to acquire new credit to prove your credit worthiness. A good place to start is with a secured credit card. Getting a secured card, at the link we will provide, is virtually guaranteed. You should also get other credit such as a loan for an RRSP, a car loan etc.

Step 4 - Accumulate your Down Payment. The minimum down payment is 5% with a mortgage guaranteed by CMHC. To qualify for this mortgage you must have been discharged for at least two years and one day and have at least one year of re-established credit.

Step 5 - Contact a Mortgage Professional who is experienced at helping people, who were in bankruptcy or faced other financial challenges, get a mortgage.

Bankruptcy Office Publishes a Bankruptcy Abuse and Fraud Section.

The Office of the Superintendent of Bankruptcy’s website now contains a new section called “Bankruptcy abuse and fraud,” which looks at abuse and fraudulent activity by debtors within the insolvency system. Designed to raise awareness about debtor compliance, the content focuses on the duties of the bankrupt, provides information on what constitutes non-compliant behaviour, and includes real-life examples of criminal convictions and Court decisions on debtor discharges.

The section reports that the most common offences committed under the BIA and the Criminal Code are when the bankrupt:

• Fraudulently disposes of property before or after the bankruptcy;
• Makes false entries in a statement of account or hides, destroys or falsifies a document related to his/her property or affairs;
• Obtains credit or any other good through false representations;
• Conceals or fraudulently removes property, or conceals claims or debts;
• Obtains credit or engages in trade without informing the people involved that he/she is bankrupt;
• Refuses to respond fully and truthfully to questions posed during an examination held in accordance with the BIA.

Here is one case summary:

Criminal/penal case
Court No.: 540-73-000321-077 (2009)
OSB No.: 41-797669

Background
After accumulating more than $37 000 in debts, an unemployed woman continued to borrow money even though she knew how precarious her financial situation was. She obtained $19 600 in cash advances and made purchases totalling $40 000 over a period of one year. She had 18 different credit cards at the time. When she declared bankruptcy, she blamed her debts on gambling.

Summary of offences of the bankrupt

• The bankrupt used deceit, falsehood or other fraudulent means to defraud various credit card companies of different amounts of money.

Court decision
The bankrupt was found guilty of 14 counts of fraud. She was given a 12-month suspended sentence, with the following conditions:
• remain at home 24 hours a day for the first four months;
• remain at home between 11:00 p.m. and 7:00 a.m. for the next four months, the only authorized absences being for medical reasons and religious activities;
• not possess or seek to obtain any credit cards; and
• not go to casinos or any other place where there might be gambling.

In addition, one year of probation will begin at the end of the suspended sentence.

The section also provides information on the discharge process, the roles of debtors and creditors, and investigations conducted by the OSB’s Special Investigation Units and the Royal Canadian Mounted Police.

You can access the new section at the following link: http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02654.html.

July 7, 2011

The Office of the Superintendent of Bankruptcy (OSB) rejected a proposal that Credit Counsellors be allowed to administer Consumer Proposals.

The report states:

The OSB is clearly concerned with the level of competency and oversight required to operate under the BIA as an administrator of consumer proposals. With respect to licensing administrators outside the scope of provincial government oversight and accountability, it is the Superintendent’s view that there is a much stronger obligation on the part of the OSB to protect the interest of the consumer. Consumers must have access to full, complete and competent assessment and advice, which means there must be substantial training with respect to the BIA, regulations, directives, legal procedures and court processes. The only training program currently approved by the OSB, and available to credit counsellors wishing to operate under the BIA, is offered through CAIRP and it leads to being tested for knowledge and competency as a trustee under the BIA. Counsellors should be able to pursue such training to acquire the skills necessary to operate under the BIA and offer consumer proposals.

The OSB said that it will remove unnecessary barriers that inhibit productive business relationships from being formed between trustees and credit counsellors where each group (trustees and credit counsellors) would be able to integrate their services and expertise to best meet consumer needs by directing consumers to the right expertise, improving their financial literacy and assisting in their financial rehabilitation.

The full report is available at: http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br02662.html

The Personal Insolvency Guide is available on BankruptcyCanada.com in EPUB and MOBI format for FREE downloads.

This means the book can be placed on Electronic Readers such as the Kindle, Sony Reader, Stanza, Kobo, the iPad and iPhone; iBooks on the iPad and iPhone, and Android Phones.

This book was first published in 2005 by Self Counsel Press and has been sold in stores across Canada for $12.95.

This book is a “MUST HAVE” for anyone considering bankruptcy or a proposal or considering using a credit counsellor.

The Personal Insolvency Guide has been updated to reflect the new bankruptcy laws and other matters as of May, 2011.

The book is written in clear non-technical English and is the most comprehensive book available on helping individuals deal with a financial crisis. The Personal Insolvency Guide gives the straight facts, in plain English, on all aspects of the insolvency industry so that individuals can make the best decision on how to get a fresh financial start.

Go to this site for more information including download links so you can download the Personal Insolvency Guide.

KITCHENER, ON, March 30 /CNW/ – On Wednesday, March 23rd 2011, the Royal Canadian Mounted Police (RCMP) Kitchener Detachment Commercial Crime Section charged a male in relation to bankruptcy offences.

James Philip George D’HONDT, age 58, of Otterville, Ontario, has been charged with 4 counts of bankruptcy offences, contrary to Section 198(1)(c) of the Bankruptcy and Insolvency Act (BIA). Police allege that D’HONDT made a false entry or knowingly made a material omission in a statement or accounting. If convicted, the accused may be sentenced to a fine not exceeding ten thousand dollars or to imprisonment for a term not exceeding three years, or to both.

The RCMP is responsible for investigating incidents of bankruptcy fraud or bankruptcy offences as received from a separate federal agency. A bankruptcy may result when an individual or company incurs debts and fails to meet the liabilities generally as they become due, thereby putting the creditor’s interests in jeopardy. Although individuals and companies may voluntarily file an assignment in bankruptcy, a creditor may also force a bankruptcy by making an Application for a Bankruptcy Order. When a bankruptcy occurs, the bankrupt person is required by law to comply with numerous duties; failure to comply with duties of a bankruptcy is a chargeable offence under the BIA.

James D’HONDT is scheduled to attend the Provincial Court of Justice in Kitchener, Ontario, on Monday, April 18th 2011.

For further information:

Constable Laurence YIM
RCMP Kitchener Detachment
Media Relations
(519) 896-3542, Extension 235

Finance Minister Jim Flaherty recently announced a series of mortgage rule changes aimed at addressing growing concern about increased household debt in Canada:

1. The changes will see Ottawa reducing the maximum amortization period from 35 years to 30 years;

2. Ottawa will also withdraw government insurance backing on lines of credit secured by homes;

3. Canadians will only be able to borrow up to 85 per cent of the value of their homes, down from 90 per cent.

The federal government is attempting to avert a similar path as the American market where people were creating consumer debt by refinancing every one to two years.

Buyers who purchase a home with a down payment less than 20 per cent of the value of the home are required to purchase government-backed mortgage insurance through Canada Mortgage and Housing Corporation.

The new rules will restrict mortgages with amortized periods past the 30 years brink from qualifying for that insurance. That essentially eliminates the possibility of Canadians getting access to mortgages with a term of more than 30 years.

Flaherty said that the intent is to stem the wave of consumer debt by reducing the total interest payments people with longer amortization on a mortgage would end up paying.

Canadian retirement savers need “expert, impartial third-party advice” about investments.
Saul Schwartz, public policy professor at Carleton University, says financial institutions and the Canadian government are increasingly profiting from the general public's financial ignorance.

Saul Schwartz says Canadian retirement savers need "expert, impartial third-party advice" about investments.

Last month, the Carleton University public policy professor said the task force report submitted to federal Finance Minister Jim Flaherty "reads like the soothing words of the foxes, spoken upon taking command of the chicken coop."

In an interview, he said financial advisors "are not giving you impartial advice. They have a vested interest in part in selling their own proprietary products. It's not necessarily bad advice, but the product may not be exactly what you need."

View Saul Schwartz’s full report: Can Financial Education Improve Financial Literacy and Retirement Planning?

SEVERAL INDIVIDUALS CHARGED WITH FRAUD RELATING TO VOLUNTARY BANKRUPTCY PROCESS

(Toronto, Ontario – Thursday the 14th of October, 2010) – The Royal Canadian Mounted Police – Greater Toronto Area Commercial Crime Section in partnership with the Toronto Office of the Superintendent of Bankruptcy, charged several individuals with offences under the Bankruptcy and Insolvency Act and the Criminal Code. The allegations all relate to fraud and the abuse of the Bankruptcy process and are three separate investigations.

Jetchko Vassilev RANGUELOV, 49 years of age, of Park Street, Toronto was charged on September 16th, 2010 and is scheduled to appear in court on Friday October 15th, 2010 at Old City Hall Courthouse in Toronto. He is facing seventeen Criminal Code charges and eighteen charges under the Bankruptcy and Insolvency Act.

Edith Clarissa Cecile Mary WRIGHT (who also uses the surname BARKER) 48 years of age, of Penetanguishene, Ontario was charged on September 17th, 2010 and is scheduled to appear in court on October 27th, 2010 at Barrie Courthouse, Barrie, Ontario. She is facing two Criminal Code and one Bankruptcy and Insolvency Act charge.

Nagendram SANKAR, 34 years of age, of North York, Ontario was charged on September 24th, 2010 and is scheduled to appear in court on October 22nd, 2010 at Old City Hall Courthouse in Toronto. He is facing five Criminal Code and nine Bankruptcy and Insolvency Act charges.

With the ongoing co-operation between the RCMP and the Office of the Superintendent of Bankruptcy (OSB) we continue to investigate allegations of breaches of the Bankruptcy and Insolvency Act and the Criminal Code as they pertain to the Canadian Insolvency process. The RCMP will enforce the provisions of the Criminal Code when appropriate and this partnership will continue to focus its efforts on undertaking criminal investigations where evidence of wrong doing exists. The objective is to maintain confidence in the integrity of the Bankruptcy/Insolvency Process and the economic stability of Canada.

The successful partnership between the OSB and RCMP is working diligently together investigating and responding to these allegations of fraudulent bankruptcies and systemic abuse of the bankruptcy process.

GTA CCS Bankruptcy Unit is located at 345 Harry Walker Parkway South, Newmarket, Ontario.

For further inquiries:
Sgt. Marc LaPorte,
Media Relations Coordinator
RCMP “O” Division
Office: (519)640-7302
Cell: (416)992-4409

September 1, 2010 Credit Card Rules to Help Consumers.
Three new regulations take effect on Wednesday, September 1, 2010 that will bolster changes made earlier this year.

First, card issuers will be required to offer borrowers a minimum 21-day grace period, during which they won’t have to pay interest on new credit card purchases as long as they pay off their balance by the due date. Previously, grace periods varied and interest could be charged from the date of purchase on new items if the card holder had not paid last month’s bill in full.

The new grace period, which Finance Minister Mr. Flaherty said banks resisted, would cost banks “tens of millions of dollars”. It means purchases made the month after a balance has been carried forward will not be charged interest. Consumers must pay in full by the end of the month to take advantage.

Second, when customers make payments above the minimum amount, they must now be applied to the balance with the highest interest rate first, or proportionally to all transactions. Previously, card issuers could apply payments made above the minimum amount however they saw fit.

Third, credit card statements will have greater transparency and will have to show how long it will take to pay off a balance if only the minimum payments are made. They will also have to provide advance notice of any increases to fixed interest rates.

“People think paying the minimum amount is OK. That’s not OK,” Mr. Flaherty said. “It’s decades … It’s compound interest.”

These regulations follow several changes made in January, which included requirements for information disclosure boxes on statements, the need to obtain customer consent for credit limit increases, an end to over-the-limit fees caused by retailer holds.