September 18, 2009
Tougher Canadian bankruptcy laws in effect
A new law making it more difficult for Canadians to declare personal bankruptcy went into effect Friday as figures showed a 35.6 percent increase in filings.
The Office of the Superintendent of Bankruptcy reported July's filings of 10,726 people was up more than one-third when compared with July 2008.
The numbers for August and September were expected to soar, as a new law passed by the Conservative government make it much more difficult for consumers to file for bankruptcy, the Globe and Mail reported.
Until Friday, individuals unable to pay a minimum of $75,000 in unsecured debt could file for bankruptcy, but the minimum is now $250,000. In the past, individuals under bankruptcy protection paid what trustees determined to creditors for about nine months, but the new law requires payments for 21 months for those who are deemed to have surplus income, the report said.
In determining surplus income, the federal bankruptcy Web site said
if the bankrupt has monthly surplus income equal to or greater than $200, he or she will be required to pay 50 percent of the monthly surplus income to the trustee for disbursement.