My_question_is: Applicable to both US and Canada
Subject: Bankruptcy - Dual Citizen
Expert: taxman at centa.com
Date: Saturday October 07, 2006
Time: 02:50 PM -0400
QUESTION:
Hi, I am a dual citizen, US-Canada, living in Canada.
Up til now, my credit in Canada and the US has been kept seperate.
However, I am considering declaring bankruptcy in the US (maybe Canada as
well). I have a US student loan and credit card debt in both countries.
I need to know, if I file bankruptcy in one country will I also have to file
in the other? Will declaring in one country affect my credit in the other
country? Can I consolidate or make a proposal in 1 country and not the
other?
Also, who can advise me? My initial attempts have been met with I only know
bankruptcy law in the one country.
Thanks.
-----------------------------------------------
david ingram replies:
In Canada, student loans can not be discharged in a bankruptcy until 10
years has passed.
In the USA, student loans can not be discharged in a bankruptcy.
If you have an RRSP in Canada, it can be taken to pay the creditors.
What you get to keep in a bankruptcy is determined by the state or
provincial rules for the jurisdiction you are living in.
I get no feeling for that jurisdiction from your question.
I always suggest that one use a couple of dollars left to consult a
bankruptcy lawyer before declaring bankruptcy. Although you may have picked
a trustee by going through the yellow pages or had him/her recommended by a
dozen others who have gone before you, the Canadian trustee or US lawyer
handling the bankruptcy is working for the creditors, not you.
Find yourself a bankruptcy lawyer who will not be handling the bankruptcy
BEFORE you declare.
That way, if a tricky question or situation arises, you will have a lawyer
you already know to ask a question of with privileged communication.
In my own personal bankruptcy, I used Murray Morrison in Surrey in greater
Vancouver at (604) 930-9013.
If you are not in BC, he may be able to refer you to someone in your area.
Another great resource is Earl (the original Sands, in Sands and Associates)
Sand's great bankruptcy site at http://www.bankruptcycanada.com/.
And be prepared for anything. At my first bankruptcy hearing the Bankruptcy
Trustee from Deloitte walked in the room, looked down his nose at me and
said, "Aren't you ashamed to be here Mr Ingram?" It was wonderful. I lost
immediate respect for him and hired Murray Morrison who protected my
interests all through the process.
And although I was put into bankruptcy by the CRA (the only Canadian to have
it happen that I know of), I likely should have declared myself ten years
earlier. Today, I am an advocate for a person declaring bankruptcy and
starting over. I can say that the best thing that happened to me in the
last dozen years was the CRA hiring a bankruptcy trustee and releasing me
from a $4,868,000 debt that would/could never have been paid off. Any day
for 20 years I could have walked into a trustee and stepped away from it but
was too proud, too stupid, too stubborn to do it myself. Every friend and
advisor told me to do so and I didn't; silly eh?
If you are in BC and need a trustee, you can not go wrong (in my opinion) by
using Gerry Foran at Sands and Associates (604) 684-3030.
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