Q: In BC, what assets can I keep?
In British Columbia, by Provincial Legislation a bankrupt person can retain:
- Household Goods up to $4,000 (based on a quick sale, prices do not reflect replacement costs)
- Occupied residence equity (up to $9,000 outside of Victoria/Vancouver)
- Tools and equipment for self employment to $10,000
- A vehicle valued up to $5,000 (less if FMEP debt)
- Certain life insurance policies and RRSP’s
Bankruptcy does not prevent the actions of a secured creditor. If you want to keep an asset pledged as security for a debt, you must make payment arrangements with the secured creditor.
Creditors not affected by your bankruptcy:
- Secured creditors – you may continue making payments
- Court fines, penalties and restitution orders
- Alimony and maintenance payments
- Student loans if you ceased to be a student less than 7 years ago
- Debts from intended bodily harm
- Debts resulting from fraud, embezzlement or misappropriation
Credit Bureau Reports
The two major credit reporting agencies are EQUIFAX and TRANS UNION. Most credit granters use both. These agencies do not give you a “Credit Rating” They only report your credit history and your creditor’s assessment of your record with them. Since lenders use your credit file as a decision making tool, it is important that your file is accurate and complete. You can review your file at any time. If you notice errors on your file you should advise the Bureau in writing so they can be corrected. Trustees do not report to or have access to Credit Bureau information.
Q: How does the credit bureau obtain their information?
Information is received from four major sources:
- Information you supply on a credit application or when you open a new bank account
- Public records relating to Court Judgments, Foreclosures, Bankruptcies, Chattel Mortgages and Conditional Sales Agreements that are registered with the Provincial Government
- Major credit grantors and collection agencies
- Credit applications that are refused
Q: What does your credit rating mean?
Your credit rating is based on how you pay your debts.
- – Too new to rate
- – Pays account as agreed
- – Pays over 30 days, but less than 60, only one payment past due
- – Pays over 60 days but less than 90, only 2 payments past due
- – Pays over 90 days, but less than 120, three or more payments past due
- – Account is at least 12 days overdue, but is not yet rated as bad debt.
- – This code is not used
- – Making regular payments under a consolidation order( Orderly Payment of Debts), consumer proposal or similar arrangement
- – Repossession, foreclosure or voluntary return of asset by the consumer
- – BAD DEBT – placed with a collection agency; unable to locate; or sought protection under the Bankruptcy and Insolvency Act
In most cases negative information on your credit file will remain for seven years. But you can start to rebuild your credit rating long before the seven years are up