Consumer Alert: Federal Bankruptcy Laws Change with No Notice to Consumers



    KITCHENER, ON, July 8 /CNW/ - In a surprise and unprecedented move, with
no advance notice the federal government yesterday implemented two significant
changes to federal bankruptcy law.
    "The rules came into effect with no prior warning," says Douglas Hoyes, a
trustee in bankruptcy with Hoyes, Michalos & Associates Inc. "The new laws
will have an immediate and significant impact on the hundreds of thousands of
Canadians with student loan debt."
    Amendments to the Bankruptcy & Insolvency Act contained in Bill C-12 were
given Royal Assent on December 14, 2007, but did not immediately come into
force to give the government time to draft the supporting regulations. In a
surprise announcement, yesterday the Minister of Labour signed an Order in
Council to immediately implement only two sections of the new legislation.
    First, in a bankruptcy student loans will be automatically discharged if
they are more than seven years old, as compared to the previous ten year rule.
"This change will impact tens of thousands of former students who are
currently experiencing a crushing burden of debt," says Ted Michalos, a
trustee in bankruptcy with Hoyes, Michalos & Associates Inc.
    In an effort to make the treatment of RRSPs similar to the treatment of
pensions in a bankruptcy, the second change allows a bankrupt person to keep
their RRSP in a bankruptcy, except for contributions made in the year prior to
bankruptcy.
    Canadians in financial trouble are urged to contact a licensed bankruptcy
trustee to determine if the new rules will help alleviate their financial
problems.

    Hoyes, Michalos & Associates Inc., a trustee in bankruptcy firm with
offices throughout Ontario, helps people in financial difficulty. Further
information, and a complete copy of the submission to the Senate Committee,
can be found at http://www.hoyes.com





For further information:

For further information: Douglas Hoyes, CA, Trustee in Bankruptcy,
dhoyes@hoyes.com; Ted Michalos, CA, Trustee in Bankruptcy, ted@hoyes.com;
1-866-747-0660


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