Filing A Consumer Proposal Or Bankruptcy From Outside Of Canada
Filing from outside of Canada vis a vis a consumer proposal or personal bankruptcy is possible if you’re a former Canadian resident currently living abroad.
What follows are the steps you’d need to take to file your insolvency proceeding as quickly and as efficiently as possible.
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Filing from outside of Canada – documents required for consultation meeting with Trustee
The first thing you need to do is to contact a Trustee and determine if he’s willing to accept an engagement where the client is living abroad. Not all Trustees are willing to do this.
Assuming the Trustee is willing to take you on as a client, you’ll need to schedule a day and time to have the actual consultation meeting via video or telephone.
In order for the Trustee to determine if a consumer proposal or personal bankruptcy proceeding is the correct option to deal with your financial problems, he will have to review your debts, income & expenses, and your assets.
By reviewing these 3 factors, he’ll be in a position to provide you with the cost of each option and their impact on your credit and assets.
You’ll need to provide to the Trustee the following information ahead of your consultation meeting so he can thoroughly assess your financial situation during the meeting.
This cannot be stressed enough:
The quality of the advice a Trustee gives you is only as good as the quality of the information you provide to him.
Therefore, you need to be thorough in gathering the following documentation and information to prepare for your consultation meeting.
List of creditors
Prepare a list of all your creditors worldwide (not just Canadian debts) with the name, mailing address, current balance and account number of each creditor.
This will include, but isn’t limited to, credit cards, bank overdrafts, lines of credit, payday loans, cellphone contracts in default, vehicle loans, mortgages, debt owing to the Canada Revenue Agency, and personal loans owed to friends and family.
You’ll also need to inform the Trustee which of these debts were co-signed by another party. This will have an impact on the advice the Trustee gives to you.
Proof of income
If you have income from employment, government benefits, investments, etc., obtain recent paystubs and bank statements. This applies to your worldwide income.
If you have any financial assets such as life insurance, RRSPs, RESPs, TFSAs, company pension plan, mutual funds, brokerage account, etc., you’ll need to provide the Trustee with the most recent statements. If you have financial assets outside of Canada, you’ll need to provide statements for these as well.
If you own a car, motorcycle, boat, etc., provide the Trustee with a copy of the ownership and certificate of insurance.
Provide to the Trustee the title deed, most recent property tax bill and most recent mortgage statement for all of your real estate holdings worldwide.
Income tax assessments
You’ll need to provide to the Trustee your most recent Notice of Assessment from the Canada Revenue Agency as well as recent assessments of income you earned in the country where you’re currently residing.For example, if you’re currently residing and working in the United States, you can access your IRS tax account online.
Government issued photo ID is required by the Trustee so he can confirm your identity and legal name.
Arrange to send these documents to the Trustee ahead of the consultation meeting.
Filing from outside of Canada – consultation meeting with Trustee
This meeting will be conducted by video or by telephone. If you’ve provided the above documentation to the Trustee ahead of consultation meeting, the meeting itself shouldn’t take any longer than 30 to 45 minutes.
As indicated previously, the Trustee will provide you with your options, including filing for personal bankruptcy or a consumer proposal. He’ll also explain the costs of each option as well as the impact on your credit and your assets.
Filing from outside of Canada – legal documents to be signed
Once you’ve made a decision to file a consumer proposal or personal bankruptcy, the Trustee’s office shall prepare the legal documents you’ll be required to sign to actually file your proposal or bankruptcy.
These documents will be sent to you by the Trustee’s office (usually by e-mail) which you’ll print off and sign under the Trustee’s guidance by video or by telephone.
Certain documents will need to be witnessed or notarized. Therefore, you’ll need to have both a witness and a notary public present with you when you sign your paperwork.
After everything’s been signed, you’ll need to send the original signed copies of the paperwork to the Trustee’s office. Upon receiving the originals, the Trustee will be able to file your consumer proposal or bankruptcy with the Office of the Superintendent of Bankruptcy.
The OSB will then appoint your Trustee as the Trustee under your proposal or bankruptcy proceeding. Once that happens, you’ve officially filed your proposal or bankruptcy and the Trustee will so notify your creditors by sending them copies of the paperwork you signed.
Filing from outside of Canada – Canadian residency requirements
Under the Bankruptcy and Insolvency Act (which is the law that governs how bankruptcies and proposals are filed and administered), you can only file a consumer proposal or bankruptcy if you are a resident of Canada.
For the purposes of the BIA, you are a resident of Canada if:
- You have conducted business in Canada in the past year, or
- You have been a resident of Canada within the past year, or
- The majority of your assets are in Canada.
If none of these applies to you, you are still deemed to be a resident for the purposes of filing a proposal or bankruptcy if you have debts in Canada. There is case law to support this position.
For example, if you’ve been out of Canada for 3 years and have no assets in Canada, you’re still deemed a resident if you have Canadian debts.
Filing from outside of Canada – requirement for an in-person consultation meeting
The BIA also requires that the initial consultation meeting between a Trustee and debtor be conducted in-person.
However, the Office of the Superintendent of Bankruptcy can grant an exception to this requirement upon the application of the Trustee. Specifically, paragraph 16 of Directive No. 6R3 – Assessment of an Individual Debtor states:
The requirement in paragraph 8 (i.e., the in-person consultation requirement) that a trustee complete the assessment of a debtor’s options for resolving his or her financial situation in person does not apply…if, in the opinion of the Designated Senior Bankruptcy Analyst, extraordinary circumstances exist, he or she may allow an alternative method to be used in conducting assessment interviews in order to ensure access and availability.