What can you not do after filing bankruptcies?

_{new credit, major purchases, New Brunswick}

Thinking of new credit after declaring bankruptcy? Honesty is key—disclose your financial past to lenders for amounts over $1,000. Your credit cards go to your LIT, and major purchases need their nod. Running a business? Keep it off your name and report activities. It’s all about creating a solid financial future!

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_{Navigating new credit and major purchases after bankruptcy.}

New Credit Question

What can you not do after filing bankruptcies? I’m wondering what restrictions are in place after filing for bankruptcy. Are there specific things I can’t do?

From: Anonymous Question
Location: Fredericton, New Brunswick (NB)
Category: personal bankruptcy

New Credit Answer

Once you’ve declared bankruptcy, you’ll need to be upfront with any lender if you want to take on new credit over $1,000—they deserve to know your financial history. Your credit cards will also need to take a backseat as they’ll be handed over to your Licensed Insolvency Trustee (LIT). Big-ticket buys, like that shiny car or a snug new home, will have to wait until you get the green light from the LIT. Fancy being your own boss? Fine, as long as your business isn’t under your name and everything you do gets reported to the LIT. It might feel like you’re navigating a maze, but think of it as setting a strong foundation for a better financial future!

From: Insider Scott

Office of the Superintendent of Bankruptcy (OSB) Answer

After filing for bankruptcy in Canada, there are several restrictions you must adhere to:

1. You cannot obtain credit without informing the lender of your bankruptcy. Specifically, under the Bankruptcy and Insolvency Act (RSC 1985, c 11), Section 4(2), you must disclose your bankruptcy status.

2. You cannot act as a director or an officer of a corporation while undischarged, as outlined in Section 122(1) of the Bankruptcy and Insolvency Act.

3. You are restricted from managing or being involved in any business or profession unless disclosed and approved by your trustee, as noted in Regulations (C.R.C., c. 368, s. 38).

4. You must comply with any conditions set forth by your Licensed Insolvency Trustee, which may include attending financial counseling sessions as per the Bankruptcy and Insolvency Act and Regulations (SOR/2007-256, Section 1).

5. You cannot transfer or dispose of property without the trustee’s permission. Section 18(1) of the Bankruptcy and Insolvency Act explains the handling of property during bankruptcy.

These restrictions help ensure compliance with the bankruptcy process and ultimately lead to your eventual discharge.

From: OSB Helper

Related Questions

Here are the top 5 most frequently asked questions related to what you cannot do after filing for bankruptcy, based on common concerns and trends:

1. Can I keep my assets after filing for bankruptcy?

You may lose some assets, but certain essential items and tools of the trade are protected[1][4].

2. Can I get new credit after filing for bankruptcy?

You cannot get new credit without disclosing your bankruptcy, and new credit applications over $1,000 require special disclosure[1].

3. Can I continue running my business after filing for bankruptcy?

You cannot run a business in your own name and must inform the trustee about your business activities[1].

4. Can I make major purchases after filing for bankruptcy?

You cannot make big-ticket purchases without informing and possibly getting approval from the trustee[1].

5. Can I spend my surplus income freely after filing for bankruptcy?

You must make surplus income payments to the trustee if your income exceeds a certain government-set threshold[1][5].

If you have a question about debt see our debt questions or ask your own debt related question.

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