Bankruptcy Question & Answer Forum - Canada

Author:		Anonymous
Date:		Dec 14, 2007
Question:		I am going to go bankrupt this month or next. Does it make any difference if I wait until January? I know I will have to make out an income tax return for the current year of the bankruptcy. If I do it in December then I will have to make out the return for 2007 as the current year. But if I wait til January then 2008 will be counted as the current year, right? And I think I have to make one out for the previous year. Is that true? I'm mixed up. I would like to get this in process asap. ALSO, I was behind on my rent for 4 months and I am cashing in a life insurance to catch it up or I won't have a place to live. Will this be looked upon as preferential by other creditors? I have to have a place to live. I'm just lucky my landlord has been so understanding because of our illnesses and family deaths. I didn't realize I could cash in that life insurance otherwise I wouldn't have gotten behind in it at all. My bankruptcy will be 5 credit cards, a bank overdraft and taxes only. I have no other debts for cars or anything. What is your opinion on the bank overdraft part? Will it be better if I don't claim that and try to work with it separately?
From:		Alger & Associates Inc.
Date:		Dec 20, 2007
Answer:		You will need to disclose both the fact that you cashed in your life insurance policy and the payment to your landlord to the Trustee and to your creditors. Given the circumstances you described, you may not have an issue, but I would discuss your situation in greater detail with your Trustee. A bankruptcy will include all of your debts; therefore, the bank overdraft cannot be dealt with separately. Vanessa Grant phone: (403) 296-2977 vgrant@alger.ca