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Hello David,
I believe I may need your advice regarding my divorce from an American man in the not-too-distant future. I believe you are by far the best choice of consultant a person in my situation could make.
I understand from calling your office yesterday that I can set up a phone consultation with you (I live in Victoria). I was quoted a rate of 350/hour, which I can handle, if my ex sends me sufficient funds, or an income situation I am working on pans out. Right now I am broke and in debt. He has finally said he would send "something", "if I give him my address so he can courier it and get a signature to verify I have received it".
He has been trying (unsuccessfully) to get me to divulge my address for nearly two years, since he took up with another woman two months after going back to the states to find work (I had been supporting him for a few years prior, and could not continue on my clerical income) and wanted to move forward with her. I knew about their relationship long before he asked me for a divorce nine months after going back to his home state. He was not aware I had this knowledge, has not yet admitted to it being true, and is still trying to convince me he did not "leave me for another woman". I did not want this divorce and did not want to risk getting served with papers before I was ready to cope emotionally, so I've gone to pains to prevent him from being successful in his search for me. My fear right now is that I will sign for a package and inside will be papers for divorce, not a cheque.
I am ready to go ahead with the divorce process, but I'd like to see those funds first (he may not be actually intending to send some; I, of course, suspect a ruse in play). If he actually sends money, then I will sign whatever I need to sign to give him his divorce. It makes no sense to drag lawyers into it.
I have considered telling him to send Western Union, or to send directly to my credit card (which is debt he is partially responsible for my having), but that would entail giving him my account number, which worries me a little. However through Western Union I am concerned I will be stuck calling it income, which in a way, it really isn't. I haven't filed tax returns for a number of years and may have to take him into account when I get my books brought up to date and am then ready to bring my returns up to date.
I am not sure what the best option is.
Are you able to direct me with this one question prior to dealing with the income tax implications?
Thank you for any assistance you can give me about how to receive funds, XXXXXXXX
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david ingram replies:
the process has to start sometime and sooner is likely better than never when it comes to getting on with your life.
Right now, you have a 75/25 or 50/50 or 25/75% chance of getting money.
The alternative is your freedom which is likely just as important.
If it isn't money and it is only a divorce action, you are ahead of the game because you get rid of him.
Go for it.
If it turns out to a divorce action and you have no money, go bankrupt. But see a bankruptcy lawyer first.
Read the email you got at about the same time as this and call someone like Murray Morrison BEFORE seeing a trustee.
If on the other hand you get some money and your deal pans out, then "you" start the divorce action and get on with your life.
If you need help with the returns, we would be glad to help out. A large percentage of my clients do not even live in Canada. You are close.
I am including an article which was published in Western Investor at this point.
BANKRUPTCY - or How I Found Freedom in an Unfree World
I have just received my discharge from bankruptcy. It isn't completely over. I have to pay $800 a month for 36 months starting on Feb 7th, but that is a lot better than the $4,853,000 income tax bill that started it with no assets.
Well there "were" family assets. But over a period of 21 years I went from a positive "paper" net worth of $4,800,000 to a negative $4,800,000 because of an income tax bill that I fought in court and lost and then got stubborn.
If I had to do it again, I would have walked into a bankruptcy trustee's office 15 years ago and would have been able to get on with my life. Instead I got stubborn and decided I would go to my grave owing the CCRA as much as the tax bill increased to before I died.
So the house was in my wife's name, the cars were in my wife's name, the motorhome was in my wife's name and the business was in my wife's name. I owned nothing and was quite enjoying the position. After all, what else could anybody do? Well, there was one thing someone could do. In the middle of the bankruptcy my wife left (with all the assets) but that is another article.
Thankfully, the CCRA finally gave up on collecting it and hired a trustee to put me into bankruptcy. I understand that I might be the first person that the CCRA put into receivership in Canada. No trustee I have talked to had ever handled a receivership where the CCRA had put an individual into bankruptcy. Oh sure, there were thousands where a taxpayer had declared bankruptcy because of a tax bill. But no one knows of an individual out into bankruptcy by the CCRA.
Now you have to know that I have sent a couple of hundred people to go bankrupt over the years. Their situation was hopeless and bankruptcy was the only solution. And I had even had an appointment to see a bankruptcy trustee on July 22, 1999 but luckily, broke my arm and leg in a motorcycle accident the week before and never made the appointment. But I should have rescheduled and got on with my life three years earlier because it took the CCRA three more years to put me into bankruptcy and I could have done something with those three years. You see, this article is meant to encourage you to see a trustee and pull the plug if you are fighting a losing battle, particularly if the major creditor is the CCRA.
If you have money problems for any reason that could include divorce, separation, unexpected tax penalty, leaky condo, company downsizing, illness, an accident or any combination of the above, you will need help.
That help may be as simple as taking an adult education course in family finances at your local high school. Most adult education courses include such a course and even though I taught them for years, it did not keep "me" out of that $5,000,000 bankruptcy after three of the above events occurred.
If you need more immediate help and you happen to live in Greater Vancouver, contact a credit counselor such as Margaret Johnson at SOLUTIONS CREDIT, 200-10351 150th Street in Surrey - 1-877-588-9491 or locally (604) 588-9491. www.creditsolutions.ca www.solutionscredit.com [email protected]
As her pamphlet suggests;
"Budgeting involves more than just arithmetic. It takes determination. People experiencing financial difficulties need objective, unbiased neutral information."
That statement applies to your finances when you have an income and bad spending habits. It does not cover the financial disasters that I seem to see on a daily basis. I am talking about the $186,000 income tax reassessment for something that happened five years ago. I am talking about the leaky condominium crisis where the debt is $100,000 and you would have to earn $190,000 and pay $90,000 income tax to have $100,000 left and that is not counting interest accruing while you are doing it.
In this case, you need to consult competent help that does NOT start with a bankruptcy trustee, a night school course, a credit counselor or an accountant.
Now, you need a lawyer and not "just" any lawyer. You need a Murray Morrison, who specializes in Bankruptcy law and will work for you and give you and your family the advice it needs to preserve any assets possible and tell you what you can do and cannot do.
BUT, why not save a couple of dollars and go directly to the trustee.
The simple fact is that the trustee does NOT work for you. When you sign that paper, the trustee that you searched out, the trustee that you found in the yellow pages, the trustee your banker, hairdresser, mechanic, best friend or worst enemy recommended is not working for "you".
The trustee is working for the creditors. Their job is to get the most for the creditors following local federal, state or provincial guidelines that have different limits in each province and each state.
If you are in BC, Murray Morrison is in the same office as Solutions Credit that is just behind the Guilford Shopping Centre at:
Murray Morrison
200-10351 150th Street
Surrey, BC, CANADA, V3R 4B1
(604) 930-9013 Fax (604) 588-2005
email to [email protected]
Talk to someone like Murray first. Get your law straight. Learn what you get to keep and what the limits are. In BC for instance you can have $5,000 equity in a car. However, The Bank of Nova Scotia (for one) will insist on seizing your car even if you have never missed a payment if the car loan is with them. Arranging for someone else to take over the loan before you go bankrupt could make the transition easier.
I advised one lady client to go bankrupt at this time last year for a $140,000 tax bill (which was unjust, unfair and illegal in my opinion) that we had fought for two years. (Canada decided to tax her retroactively on her income for five years even though she was an American living in the states. They decided she spent too much time in Canada and she had since moved to Canada officially - Bankruptcy was the only way to get rid of it and start over.)
I was blindsided by the Bank of Nova Scotia's new policy of not allowing anyone to keep a car. Luckily, a friend paid out the bank and loaned her the money and she kept her car. It would have been far easier if we had known that in advance. Her Bankruptcy Trustee was blind sided as well. It was also the first one he had seen.
After you have made a decision, you need a trustee. Remember, they are all working for your creditors.
Gerry Foran at Sands and Associates is a decent guy who you can deal with.
Gerry Foran
E sands & Associates Inc
1100 Melville Street
Vancouver, BC, Canada V6E 4A6
(604) 684-3030
Sands and Associates also have satellite offices in Surrey, Burnaby and Langley.
Trustees might not like me saying this but you do not even need money to do it. They can be paid from your assets, tax refund or might not even get paid until after the bankruptcy. While I was actually writing this, another client who I had sent to go bankrupt came in to return some material I had loaned him. I said thank you and suggested that he must have his discharge by now. He did not have it. He only had a conditional discharge because he still owes the trustee $1,500 which he expects to have very soon. Another client is in the same position. However, they do not have a dozen creditors phoning looking for money.
Hope this helps. Remember - see the lawyer first - before you see the trustee. And only talk to a lawyer who deals regularly with bankruptcy and appears in court for bankrupts protecting their rights. That means one in 100 lawyers. There is little chance that a lawyer you are already dealing with would be the one you would use because a bankruptcy lawyer is likely too busy to do anything else.
david ingram [email protected] www.centa.com
Answers to this and other similar questions can be obtained free on Air every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet at
www.600AM.com
Local phone calls to (604) 280-0600 - There is a provincial long distance line as well and old shows are archived at the site.
This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate:
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Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
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