NOTICE TO BANKRUPTCY CLIENTS:
Dear Valued Clients:
Due to the recent series of events regarding COVID 19, we understand that several of you are feeling anxious, stressed and uncertain about the status of your Bankruptcies, your required duties, and your ability to make your required payments. Some of you may be in a position to maintain payments for the time being however we know that everyone’s circumstances are different and unfortunately there will be some cases where current payments are unsustainable for the foreseeable future.
We want to assure our clients that BNA is doing everything possible to determine the federal government’s position regarding payments that are coming due. We have communicated our concerns with the local Office of the Superintendent of Bankruptcy (OSB) here in Alberta and we have escalated our concerns to their head office in Ottawa as have other Trustees in the industry. In addition, we understand that our professional association, likewise, has been communicating with the Superintendent in Ottawa as this is a national issue. We understand that this matter is receiving priority in Ottawa and although we have received an brief response to date, we hope to receive more specific guidance in the coming days.
Until such direction is received, we want to provide you all with some information in regard to your options going forward, however please keep in mind the legislation surrounding Bankruptcies remains unchanged at this time so we have listed those specifics below for your consideration as well:
- Non-Monetary Duties: You are required to continue completing your non-monetary duties status quo i.e. Monthly Income and Expense Statements, Tax Information as requested, Counselling Sessions, and/or any other information or documentation being requested by our staff to verify your Statement of Affairs. If you do not have access to a scanner or fax machine to get us the required documents, you may wish to download an App on your phone called “Scansnap” which will turn photos into PDF’s that you can then email to us. Failure to complete your duties will result in an opposition to your discharge and a Court hearing required.
- Voluntary Payments for those that do NOT have Surplus Income payable: If you believe your income will drop over the next few months, but anticipate it going back to normal in due course, please pay what you can towards the agreed upon amount in the meantime. You can always increase your monthly payments once your income has stabilized again to get back on track to complete your payments as required. If you are unable to pay as agreed within your administration period [9 or 21 months for a first time bankrupt; 24 or 36 months for a second time bankrupt; 36 months for a third time bankrupt], we will be required to oppose your discharge from bankruptcy, and attend Court where they will grant a Court Order requiring monthly payments until you have paid your arrears balance in full.
- Surplus Income payments: We will continue to monitor your income on a monthly basis and advise you of your required payments. If your income has decreased, your required payments will also decrease, and vice versa. We encourage you to continue paying as much as you can towards your required payments in the meantime. If at the end of your 21 or 36 month administration period there is still a balance owing, there are two options:
- Mediation: If you have completed all other duties and the only thing remaining is Surplus Income payable, we can enter into a Mediation Agreement wherein you agree to pay a certain amount each month until the balance is paid in full. You would receive your Automatic Discharge from Bankruptcy upon completion of the Mediation.
- Court: If you have other duties outstanding in addition to the Surplus Income payable, we are required to oppose your discharge from bankruptcy, and attend Court where they will grant a Court Order requiring you to complete your remaining duties as well as making monthly payments until you have paid your arrears balance in full.
- Mediation Payments: under the legislation, if you miss the sum of two mediation payments, we are required to schedule a Court hearing wherein the Court would grant a Court Order requiring you to make monthly payments until you have paid your remaining balance in full.
- If your situation has improved or improves down the road you do not need to remain in bankruptcy. We have the option to “flip” you out of the bankruptcy into a Proposal (Division I or II, depending on the amount of unsecured debt you have). If the creditors accept Proposal, this annuls the bankruptcy and eliminates it from your credit history. If the creditors do not accept it, then you would remain in the bankruptcy.
COURT FEES: As discussed upon your Assignment into Bankruptcy and as agreed upon by yourself in the “Debtor Information and Acknowledgement” document, we have a company policy to charge $500.00 per Court hearing required. We understand that continuing to comply with our policy to impose additional Court fees for every required Court hearing may feel unreasonable; however we would like to kindly remind you that it is simply to compensate the Trustee for the effort and time involved in making a Court Application, preparing reports for the Court (minimum of 2 reports per opposition hearing), attending Court, processing the Court Orders upon receipt back from Court, and monitoring your compliance with the terms of the Court Orders for an unknown amount of time until you achieve your Absolute Discharge from Bankruptcy. We shall review each file on its individual merits in determining whether or not we enforce our policy.
If you wish to discuss the specifics of your situation, please feel free to contact our office via telephone or email for further information and assistance. Please note that several of our staff are working remotely and we only have limited staff in the office to help answer phone calls. If you are unable to get through to somebody, please leave a message and we will call you back at our earliest convenience. We ask that you are patient with us as we have thousands of clients and we are doing our best to respond to each and everyone of you with limited staff and resources.
Thank you all for choosing BNA Debt Solutions. Rest assured you that we will work together to find the best solution for your specific situation in these ever-changing circumstances.
As promised in our last communication (below), we have now received some guidance from the Office of the Superintendent of Bankruptcy (OSB) that we would like to pass along.
The OSB has clarified to Licensed Insolvency Trustee’s (“LITs”) that any amounts received by a bankrupt for COVID-19 Income Support, GST Credit top-ups, temporary increase in Canada Child Benefit amounts, or other amounts specifically related to COVID-19 “is not subject to the operation of any law relating to bankruptcy or insolvency” thus all applicable amounts will be excluded from the Surplus Income calculation. **Once you start receiving any of these amounts, please clearly indicate these on your monthly reports so we know not to include them in the calculation.**
Several of our clients have inquired regarding their payments; whether your bankruptcy is ongoing and active, or whether you are under a Court Order (Conditional, Compelling, etc.) we encourage you to continue to make your payments where possible. If you cannot make your payments as required, please touch base with us to advise as to what you can commit to in the interim so we can monitor this. The OSB has specifically said that LITs “are encouraged to exercise their professional judgment in using as much flexibility as possible to avoid unintended harm or prejudice in the current circumstances. Section 187 of the Bankruptcy and Insolvency Act (BIA) could be considered as appropriate (in particular subsections 187 (9), (11) and (12) with the caveat that some sections of the BIA, such as subsection 50.4(10), may override this provision). LITs are expected to document their policies, procedures and rationales during this period. The OSB’s approach to compliance will also be flexible and practical in light of the situation.” This “harm or prejudice” applies to both the debtor and the creditors, so each file will be looked at on a case by case basis to ensure no party is prejudiced by our decision. We shall review each file on its individual merits in determining what flexibility can be afforded in each circumstance.
We would also like to inform you that at this time we have decided to keep our doors closed to the public until further notice. We will continue to operate behind closed doors and you can always reach us via telephone and email.
If you wish to discuss the specifics of your situation, please feel free to contact our office via telephone or email to email@example.com and we will review your file and get back to you with our position or suggestions. Please note that several of our staff are working remotely and we only have limited staff in the office to help answer phone calls. If you are unable to get through to somebody, please leave a message and we will call you back at our earliest opportunity. We ask that you are patient with us as we have thousands of clients and we are doing our best to respond to each and everyone of you with limited staff and resources.
Thank you again, and we hope you are all staying safe.