Bankruptcy and Insolvency Presentation CSRSA

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Bankruptcy and Insolvency Presentation CSRSA

• Dave Stewart
  Toronto Sept 30, 2003
• Office of the Superintendent of Bankruptcy
• Industry Canada
• Tel [phone] Fax [phone]
• Stewart.dave_at_ic.gc.ca
• OSB Website osb-bsf.ic.gc.ca

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Index

• Trends in Consumer Filings
• Insolvency Reform Update and Suggestions
• Demographics of Debtors from E-Filed Bankruptcies

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Overall Consumer Inslovencies

• Totals for Canada
• 2001 93,473
• 2002 93,428
• To June 2003 51,272

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Consumer Insolvencies by Type 2001
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Consumer Insolvencies by Type 2002
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Consumer Insolvencies by Type2003 (to June 30)
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InsolvencyUpdate

• Senate Banking Committee heard from several
  groups in May and June
• Additional hearings are now taking place
• Committees report expected in October
• Transcripts available at www.parl.gc.ca
• Legislation could be introduced in 2004

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Insolvency Reform Suggestions
Pro Creditor

• Bankrupts with surplus income should be subject
  to a standardized deemed conditional discharge
  and continue to make surplus income contributions
  for up to 12 months after the expiration of nine
  months
• First time bankrupts without surplus income who
  have not contributed to their estates the amount
  of monies above which a dividend to creditors
  will be paid should be eligible for an automatic
  discharge but will be permitted to enter into
  voluntary agreements with their trustees for this
  amount

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Insolvency Reform Suggestions Pro
Creditor (Contd)

• Monies from pre-and post income tax returns
  should be deemed to be assets available for
  distribution rather than income.
• Debts for credit card purchases and cash
  withdrawals within 3 months of bankruptcy should
  be sanctioned
• Creditors should be able to oppose bankrupts
  discharges by filing an affidavit rather than
  having to be present for the hearing

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Insolvency Reform Suggestions
Pro Debtor

• RRSPs should be exempt from seizure as long as
  they are locked into a pension plan, subject to a
  claw back of 3 years contributions with a cap
  based on age and the contribution limit.
• The length of time before student loans may be
  discharged should be reduced from 10 to 5 years
  and an application to court for a hardship
  hearing should be permitted 1 year after
  cessation of studies

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Insolvency Reform Suggestions Pro
Debtor (Contd)

• Bankrupts should be able to invoke a federal
  exemption list rather than the applicable
  provincial exemptions
• Non-Purchase money security interests on
  household property and the exempt portion of
  vehicles should be exempt from execution

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Demographics From E-Filed Bankruptcies

• Since Dec 2002 trustees have been able to e-file
  summary bankruptcy estates (most consumer
  bankruptcies)
• To date approx 16,000 bankruptcies have been
  e-filed
• All e-filed bankruptcies are in a separate data
  base and all details from the original filing
  documentation can be accessed and studied (see
  Annex)
• The following slides provide a glimpse of some of
  the interesting demographic information from this
  data base

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Bankrupts Net Income National

• Bankrupts
  N14,185 General Population (2001)
• Average Income 17,975
  24,355
• Median Income 17,508
  20,003

Statistics Canada, Income trends in Canada
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Bankrupts Net Income Ontario

• Bankrupts
  N4,713 General Population (2001)
• Average Income 18,770
  26,603
• Median Income 18,516
  21,955

Statistics Canada, Income trends in Canada
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Bankrupts Net Income Alberta

• Bankrupts
  N1,968 General Population (2001)
• Average Income 19,184
  26,613
• Median Income 19,182
  21,750

Statistics Canada, Income trends in Canada
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Total Family Net Income National

• Bankrupts
  N14,185 General Population (2001)
• Average Income 23,483
  47,140
• Median Income 22,200
  39,252

Statistics Canada, Income trends in Canada
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Total Family Net Income Ontario

• Bankrupts
  N4,713 General Population (2001)
• Average Income 24,154
  53,582
• Median Income 22,980
  44,856

Statistics Canada, Income trends in Canada
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Total Family Net Income Alberta

• Bankrupts
  N1,968 General Population (2001)
• Average Income 25,196
  51,103
• Median Income 24,000
  44,398

Statistics Canada, Income trends in Canada
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Individual Filings in Our Efiling
DatabaseAverage Number of Dependents for
Individual Filingsfrom Jan 01, 2003 to Aug 31,
2003
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Individual Filings Home Ownershipfrom Jan 01,
2003 to Aug 31, 2003
Note Total estates in our Efiling database
13,556 from Jan 01, 2003 to Aug 31, 2003 General
population home ownership percentage 64
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Estimated Value for RRSPsfrom Jan 01, 2003 to
Aug 31, 2003
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Average Unsecured Creditors Per Filefrom Jan 01,
2003 to Aug 31, 2003
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Annex
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