Personal Finance

Locked: Bankruptcy gone after 7 years? I think not.

  • Last Updated:
  • Feb 1st, 2011 11:53 pm
Tags:
None
[OP]
Sr. Member
Nov 5, 2009
612 posts
33 upvotes

Bankruptcy gone after 7 years? I think not.

A lady friend was forced into filing for bankruptcy 10 years ago because of terrible family circumstance, husband becomes invalid because of stroke and daughter becomes a drug addict and a ward of the province. All that leads her to become severely depressed and unable to work and bankrupt.

For the last 3 years, this woman wakes up after reading some book and starts to successfully put her life together. Today she has no debts and has savings of $45,000 spread over a couple of banks. Her credit score is 740. Rbc has extended her $15,000 in various forms of credit in the last year alone. TD, where she has a savings account where she has deposited $1500 a month for last year and a half, has never offered her credit. Yesterday, she applied for an emerald credit card on the phone and everything was going smoothly until she was told to hold and a different person comes on the line to tell her “we can’t proceed with this application, please call the recovery dept. at this number”.

She did not call the recovery dept. because she is too ashamed to be reminded of the bankruptcy and those awful times.A TD credit card debt of $15,000 was included in the bankruptcy 10 years ago but TD did keep the $10,000 RRSP account she had with them at that time.
Do you agree that a bankruptcy never really goes away? I tend to think so.
Share:
64 replies
Deal Fanatic
User avatar
Oct 23, 2003
5758 posts
338 upvotes
seems normal, she screwed TD out of money and now she wants a credit card from them, good luck.
Deal Guru
User avatar
Nov 18, 2005
10142 posts
1700 upvotes
Kingston
I guess that the record of bankruptcy disappears from public and quasi-public records (like Equifax), but companies that lost money as a result of the bankruptcy don't have to forget it after 7 years.
Banned
User avatar
Feb 15, 2008
26318 posts
3158 upvotes
Calgary
If asked the question, "have you previously declared bankruptcy" in any official capacity, one is obliged to answer truthfully for the rest of their lives.

I used to review the financing documents (ie: prospectuses) of junior Calgary oil and gas companies, for investment purposes. Very often, half of the principals or executives of such companies declared, in these documents, that they declared personal bankruptcy during the 1980s Calgary oil crash.

Personal bankruptcy will also affect one's ability to become or remain a lawyer, an accountant, or a professional engineer, and/or to obtain insurance coverage for professional activities in those areas.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Addict
Dec 24, 2005
4885 posts
545 upvotes
the bankrupcy is totally gone

but the actual lender which you owe money to .... wont (and should not) give you money again
Banned
User avatar
Feb 15, 2008
26318 posts
3158 upvotes
Calgary
ssainani wrote:
Jan 28th, 2011 11:22 am
the bankrupcy is totally gone
Is it? A lender might be able to infer that, with 7 years lacking in credit history or with only relatively small amounts of credit granted, that something might exist in one's history that indicates a past personal bankruptcy.

And besides, at the age of >35, who exactly applies for, or needs unsecured credit, except for the irresponsible or those who couldn't build assets of their own?

but the actual lender which you owe money to .... wont (and should not) give you money again

They'd probably have no problem talking to her about a mortgage or another form of secured financing.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Banned
User avatar
Feb 15, 2008
26318 posts
3158 upvotes
Calgary
p.s. a very good blog post on bankruptcy I recently saw in Canada:
I was completely floored by the misinformation regarding filing Bankruptcy’ s on the blog yesterday that I have to correct the dozen or so sorely misguided soul’s .. I have worked directly with a Trustee in Bankruptcy and currently working in “articling” to become a licensed Trustee (I am not claiming to be an expert – but I must set the truth about some awful facts being noted yesterday).

Filing a 1st time bankruptcy – 9 months “BUT” any unsecured creditor can oppose there discharge. 2nd Time bankrupt (as someone said yesterday 2 / 3rd filings) – that’s an automatic date in Bankruptcy Court. The court may impose some serious conditions – (you are allowed to appeal, after 1 year and with the hired Bankruptcy Lawyer in toe). Some conditions can be so severe that it may take years before you are able to meet the conditions PLUS – 2nd time filing is 14 years on your credit report. 3rd time filing – the courts have the right to even refuse your discharge if they have evidence of blatant fraud – that means your credit is forever tarnished if you live in Canada! Period!

Someone noted that a friend filing and driving a Porsche after filing – in Ontario – the exemption is $5650… any value higher and they would have to repurchase for the creditors benefit. The Porsche guy probably has a secured loan against it – meaning the financing company technically owns it – no value.

Income / single person in Ontario is exempt from surplus payment is net is not over$1840 per month, not much to really live on (that’s approx. $12hr) –any additional income above that amount, 50% is calculated to be paid into estate + a 21 month term under bankruptcy.

Proposals (payments often over 5 years) – miss 3 payments – its annulled – you lose your protection under the Act – creditors can force legal action again – and all the money you paid – gone –

The biggest development – creditors are the ones who oppose discharges – before you get your discharge – you better hope no creditor has issues with your status. As the number of write-offs mount, look at job postings at banks – there building there back office in non-performing loans.

Transfer property even 5 years before filing – must be documented (forget to tell us) if that is ever presented by any creditor – FRAUD – good luck in convincing the Judge of that – Purchase shoes 5 days before you file (FRAUD) – creditor just needs to file an opposition to your discharge.

Lie about your status – get discharged – years go by – fact brought to light – the creditor can petition to have the discharge revoked (under making false statements under the Courts – do you think the Court take lying to them lightly – bend over is all I can say) – and watch the courts impose significant penalties that will take years to comply with.

It all comes down to creditors – they all share the same database on consumers – if they waive off a charge – you can count yourself lucky – if they pursue it – they will get the Office of Super indents to conduct an examination under oath. They can literally bury you with conditional orders / and with in-house legal teams – try fighting that.

Student loans – 7 years – or if you apply to the court to vary the order if 5 years+, but you have to convince the courts that the loan is directly benefited you today – that you must show hardship, that you have been making attempts to pay and ontop of that – you will need the legal assistance to vary the order –
People – stop providing inaccurate info if you don’t know the facts – I just gave a very brief account without any in depth detail – I am now questioning if most facts on housing by the blog dogs are very much misaligned – scary that people can talk out of the other hole in their body!!
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
Deal Addict
Mar 2, 2005
1807 posts
161 upvotes
As previous posters suggested, the Bankruptcy falls off the credit report, however the original lender included in that will never forget it and will always keep it on file, in most cases for life. I doubt TD will ever loan her money again, unless she hits a jackpot and TD wants to cash in big bucks.
Banned
User avatar
Nov 7, 2010
659 posts
24 upvotes
Hamilton, Ontario
Deal Grabber wrote:
Jan 28th, 2011 11:43 am
As previous posters suggested, the Bankruptcy falls off the credit report, however the original lender included in that will never forget it and will always keep it on file, in most cases for life. I doubt TD will ever loan her money again, unless she hits a jackpot and TD wants to cash in big bucks.

well i think that makes sense...

i mean it's too bad because people make mistakes and sometimes it's even not their fault but what can you do
banks have policies
Deal Addict
Mar 2, 2005
1807 posts
161 upvotes
vonster wrote:
Jan 28th, 2011 11:55 am
well i think that makes sense...

i mean it's too bad because people make mistakes and sometimes it's even not their fault but what can you do
banks have policies
Yeah they do, and in most cases they don't make exceptions. If the account goes to collections and gets recovered that's a different story, but if it gets written off, they lenders don't forget it. I wouldn't either if someone screwed me for money.
Newbie
User avatar
Mar 6, 2010
53 posts
Oakville
I just want to add my own personal experience.

I declared bankruptcy in 1999 (long story and I learned my lesson) and one of my creditors was RBC VISA and in late 2009 I applied for their Starbucks VISA which I got no problem and with a $5000 limit. This wasn't my first credit application since my discharge and I later found out I have a good credit score now.
Deal Fanatic
Jul 1, 2007
7704 posts
564 upvotes
The fact that she's applying for an Emerald Visa tells me that she hasn't put her life together, or at least doesn't really get how savings and credit work. The Emerald card is a low interest visa and only of benefit to those who carry a balance. If she has any consumer credit at all, I call this a "fail", a) because she's going down the same dark road she went before, b) because you say she actually has cash savings, probably earning next to no interest, making it absolutely asinine to be borrowing at the 8-12% or whatever she would have gotten on the Emerald card.
Money Smarts Blog wrote:
Nov 29th, 2010 11:18 am
I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
User avatar
Apr 30, 2009
2422 posts
772 upvotes
Everyone should simply follow the law.
Deal Expert
User avatar
Dec 11, 2005
18566 posts
1010 upvotes
redflag5050 wrote:
Jan 28th, 2011 10:47 am
. Her credit score is 740. Rbc has extended her $15,000 in various forms of credit in the last year alone. TD, where she has a savings account where she has deposited $1500 a month for last year and a half, has never offered her credit. Yesterday, she applied for an emerald credit card on the phone and everything was going smoothly until she was told to hold and a different person comes on the line to tell her “we can’t proceed with this application, please call the recovery dept. at this number”.

The course of action here is blatently clear to me. She should make an appointment with her branch rep or manager, walk in and demand a credit card, or else she will be transferring all of her assets to a bank which actually cares to have her business.

Apparently RBC is willing to let the past go, TD should as well, or they will lose a customer.

I don't see why she should show any loyalty to TD if they will treat her like trash. If I needed credit and TD would not give it to me but RBC would, well then bye-bye TD.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
Deal Fanatic
Jul 1, 2007
7704 posts
564 upvotes
brunes wrote:
Jan 29th, 2011 7:44 am
The course of action here is blatently clear to me. She should make an appointment with her branch rep or manager, walk in and demand a credit card, or else she will be transferring all of her assets to a bank which actually cares to have her business.

Apparently RBC is willing to let the past go, TD should as well, or they will lose a customer.

I don't see why she should show any loyalty to TD if they will treat her like trash. If I needed credit and TD would not give it to me but RBC would, well then bye-bye TD.

If you lend some money to a friend, with the agreement that he pays you back within a certain time, and he reneges on the deal and doesn't pay you back, forcing you to take him to small claims court to get your money back. Let's say it's an amount substantial enough that you can't let this slide. Several years later:

a) is he still your friend? If yes, that's great, you didn't let money get in the way of your friendship
b) do you still lend him money? If yes, then you're damn stupid.
Money Smarts Blog wrote:
Nov 29th, 2010 11:18 am
I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
× < >

Top