On September 18th, 2009 the Conservative government led by Prime Minister Stephen Harper introduced changes in the Canadian bankruptcy laws that are significantly more punitive than those in the U.K. or the United States, as they relate to individuals who are declaring bankruptcy for the first time. In essence they offer no opportunity for bankrupt individuals to live, unless they want to live on the streets and Harper's government introduced wide sweeping changes that intrude upon the individual rights and freedoms that are supposed to be protected under the Canadian Charter of Rights.
Previous to September 18th, Canadians who declared bankruptcy for the first time were subject to meeting certain conditions and paying back a percentage of debt for a period of nine months and if they met all the conditions they would receive an absolute discharge. That would appear to be fair enough, considering that the U.K. has a period of twelve months and in America it is four months in most cases.
Now here is the kicker, after September 18th, Canadians still had the same nine month period, but only if their net income does not exceed $2,000 per month. If it is $1 more than automatically the individual cannot be discharged for a period of twenty-one months minimum and only then if none of the creditors oppose the absolute discharge. During that period of time, in addition to paying their taxes and bankruptcy trustee fees, the bankrupt person must pay back 50% of all income in excess of $2,000 net per month. Some reading this, might again say, well that is fair, you dug the hole. When compared to the American threshold for net income, before the 50% kicks in, there is quite a difference. For instance one individual living in the state of New York, without a family is not considered to have surplus income, unless their net monthly income is in excess of $3,400, which represents a $1,400 gap per month. In essence the bankrupt person is actually able to stabilize their lives. Given that the Government of Canada states that the amount of money one individual needs to provide for the bare necessities of life is a net income of $1,865 per month and the government seizes the next two income tax return checks if those apply, the bankrupt individual is reduced to begging status.
The real problem enters in when the bankrupt individual tries to alter their living arrangements. It is a given that a property management company will not rent an apartment or other property to them, because they now have a poor credit rating. Again, that goes with the territory, but the crippling change that the government of Canada introduced on September 18th, is no longer can the individual take in a roommate or go live with someone else (and we are not talking about common law relationships here) because the government now requires any individuals living under the same roof at anytime during the bankruptcy process, to reveal their income and then the threshold through some magical formula is reduced further for the bankrupt person in terms of calculating surplus income. Also, all household income, meaning all persons residing in the same home, whether in a relationship or not and whether related to the debt or not, is included for the calculation of excess income. In other words now you have a scenario whereby the bankrupt person is paying 50% on income completely unrelated to them, because the government considers that all individuals living in the same home share in the costs. Effectively the government of Canada has closed all doors for the bankrupt person to not only recover, but to survive the bankruptcy period and they have done so at a time when Canada is still boasting about the amount of money that it extends in foreign add to less fortunate countries and we are not specifically referring to Haiti in this instance, but while allowing its own citizens to live impoverished lives.
The government has a bankruptcy assistance program for those who cannot afford to pay the trustee fees. First a package is sent to the bankrupt individual and it lists about a half dozen or so bankruptcy trustees in your area. You must have two of them sign the form saying they will not take you on as a client. It sounds easy doesn't it? Well not so much, because first of all the trustees only have a vested interest in first taking the individual on as a client, because they are then paid a trustee fee each month and they also have a vested interest in extending the period of time the person is in the bankruptcy process as the firm that the trustee works for will continue to collect monthly fees from the bankrupt person. Inquiries to several bankruptcy trustees who participate in the government's assistance program revealed that in some cases trustees were outright critical of the government program, in other cases used employees for consulting purposes who are not properly trained or licensed as a bankruptcy trustee and in still other cases appeared to operate in a cloak and dagger way, withholding information concerning how the bankruptcy process works.
Letters were sent to each elected Member of Parliament, regardless of the party that they belonged to and since Canada has a minority government and had a minority government at the time the new laws were introduced, some members of other parties would have had to support the new legislation and voted for it, in order for it to have been brought into law. At this time we are still trying to access information in the public record to indicate which members voted in favor of the new legislation, so we can publish those names. One party leader, Michael Ignatieff of the Liberal Party, who recently boasted about how Stephen Harper was acting in an way that was not Democratic, for prorouging parliament recently, deleted his letter without reading it. Yes we put a receipt on it Michael (gottcha'). Michael don't worry, because you are not alone, because to date 52 other elected officials have deleted their email without reading the letter. We will be publishing those names soon. Michael all we wanted to know is if your party members voted in favor of these new laws and why you did. Don't worry though, because 10 days have now passed and Jack Layton who was standing on Parliament Hill in Ottawa, presenting a united front against the evil Conservative government has not opened his mail either, nor has Gilles Duceppe. Since all of you are elected to act on behalf of Canadians, I guess we can conclude that you also are acting in a non Democratic fashion. By the way the Prime Minister's Office has not opened his email either, but then they were the ones that went on vacation, so what can we expect.
At the same time we sent a letter to the Superintendent of Bankruptcy James Callon and we received a letter from his Office Manager Patrick Wolfe who indicated that the matter was being looked into and that they would follow up with us. That letter was received on January 21st. We will keep you posted on that front.
In one of our future blogs we will be taking a look at how the Customs and Revenue Agency in Canada (the equivalent of the IRS) has started revoking the charitable status of churches who voice their opinions concerning a wide range of public issues. Regardless of whether you belong to a religion of any sort or not, the ramifications are wide sweeping. Does this mean that for instance community leagues, Girl Guides and other not for profit organizations cannot voice their opinions if it appears to go against the grain of what the government's policies are? Can you say Police State?
We have therefore contacted all the bar associations in Canada who accredit lawyers. We have contacted several major media outlets and we are in the process of following up with them.
Previous to September 18th, Canadians who declared bankruptcy for the first time were subject to meeting certain conditions and paying back a percentage of debt for a period of nine months and if they met all the conditions they would receive an absolute discharge. That would appear to be fair enough, considering that the U.K. has a period of twelve months and in America it is four months in most cases.
Now here is the kicker, after September 18th, Canadians still had the same nine month period, but only if their net income does not exceed $2,000 per month. If it is $1 more than automatically the individual cannot be discharged for a period of twenty-one months minimum and only then if none of the creditors oppose the absolute discharge. During that period of time, in addition to paying their taxes and bankruptcy trustee fees, the bankrupt person must pay back 50% of all income in excess of $2,000 net per month. Some reading this, might again say, well that is fair, you dug the hole. When compared to the American threshold for net income, before the 50% kicks in, there is quite a difference. For instance one individual living in the state of New York, without a family is not considered to have surplus income, unless their net monthly income is in excess of $3,400, which represents a $1,400 gap per month. In essence the bankrupt person is actually able to stabilize their lives. Given that the Government of Canada states that the amount of money one individual needs to provide for the bare necessities of life is a net income of $1,865 per month and the government seizes the next two income tax return checks if those apply, the bankrupt individual is reduced to begging status.
The real problem enters in when the bankrupt individual tries to alter their living arrangements. It is a given that a property management company will not rent an apartment or other property to them, because they now have a poor credit rating. Again, that goes with the territory, but the crippling change that the government of Canada introduced on September 18th, is no longer can the individual take in a roommate or go live with someone else (and we are not talking about common law relationships here) because the government now requires any individuals living under the same roof at anytime during the bankruptcy process, to reveal their income and then the threshold through some magical formula is reduced further for the bankrupt person in terms of calculating surplus income. Also, all household income, meaning all persons residing in the same home, whether in a relationship or not and whether related to the debt or not, is included for the calculation of excess income. In other words now you have a scenario whereby the bankrupt person is paying 50% on income completely unrelated to them, because the government considers that all individuals living in the same home share in the costs. Effectively the government of Canada has closed all doors for the bankrupt person to not only recover, but to survive the bankruptcy period and they have done so at a time when Canada is still boasting about the amount of money that it extends in foreign add to less fortunate countries and we are not specifically referring to Haiti in this instance, but while allowing its own citizens to live impoverished lives.
The government has a bankruptcy assistance program for those who cannot afford to pay the trustee fees. First a package is sent to the bankrupt individual and it lists about a half dozen or so bankruptcy trustees in your area. You must have two of them sign the form saying they will not take you on as a client. It sounds easy doesn't it? Well not so much, because first of all the trustees only have a vested interest in first taking the individual on as a client, because they are then paid a trustee fee each month and they also have a vested interest in extending the period of time the person is in the bankruptcy process as the firm that the trustee works for will continue to collect monthly fees from the bankrupt person. Inquiries to several bankruptcy trustees who participate in the government's assistance program revealed that in some cases trustees were outright critical of the government program, in other cases used employees for consulting purposes who are not properly trained or licensed as a bankruptcy trustee and in still other cases appeared to operate in a cloak and dagger way, withholding information concerning how the bankruptcy process works.
Letters were sent to each elected Member of Parliament, regardless of the party that they belonged to and since Canada has a minority government and had a minority government at the time the new laws were introduced, some members of other parties would have had to support the new legislation and voted for it, in order for it to have been brought into law. At this time we are still trying to access information in the public record to indicate which members voted in favor of the new legislation, so we can publish those names. One party leader, Michael Ignatieff of the Liberal Party, who recently boasted about how Stephen Harper was acting in an way that was not Democratic, for prorouging parliament recently, deleted his letter without reading it. Yes we put a receipt on it Michael (gottcha'). Michael don't worry, because you are not alone, because to date 52 other elected officials have deleted their email without reading the letter. We will be publishing those names soon. Michael all we wanted to know is if your party members voted in favor of these new laws and why you did. Don't worry though, because 10 days have now passed and Jack Layton who was standing on Parliament Hill in Ottawa, presenting a united front against the evil Conservative government has not opened his mail either, nor has Gilles Duceppe. Since all of you are elected to act on behalf of Canadians, I guess we can conclude that you also are acting in a non Democratic fashion. By the way the Prime Minister's Office has not opened his email either, but then they were the ones that went on vacation, so what can we expect.
At the same time we sent a letter to the Superintendent of Bankruptcy James Callon and we received a letter from his Office Manager Patrick Wolfe who indicated that the matter was being looked into and that they would follow up with us. That letter was received on January 21st. We will keep you posted on that front.
In one of our future blogs we will be taking a look at how the Customs and Revenue Agency in Canada (the equivalent of the IRS) has started revoking the charitable status of churches who voice their opinions concerning a wide range of public issues. Regardless of whether you belong to a religion of any sort or not, the ramifications are wide sweeping. Does this mean that for instance community leagues, Girl Guides and other not for profit organizations cannot voice their opinions if it appears to go against the grain of what the government's policies are? Can you say Police State?
We have therefore contacted all the bar associations in Canada who accredit lawyers. We have contacted several major media outlets and we are in the process of following up with them.
