How Does Bankruptcy in Quebec Differ?
Bankruptcy in Quebec Differs From Other Provinces
If you live in Quebec and you are exploring different debt relief options, you may be wondering, how does bankruptcy in Quebec differ?
We all know that Quebec is different from the rest of the Canadian Federation and there are different laws in place, but most people don’t know how this affects bankruptcy proceedings.
Quebec works within the Civil Law tradition, rather than the common law that governs the rest of Canada.
In basic terms, this means that all decisions about bankruptcy in Quebec are made based on the Quebec Civil Code and the Civil Code of Procedure.
As a result, the laws surrounding property ownership, procedure, and general administration during bankruptcy are slightly different from what they would be in the rest of Canada.
If you are filing for bankruptcy in Quebec, it’s important that you understand the differences.
Personal property in Quebec, for example, is not considered an asset of the bankruptcy unless it has a sale value of at least $6,500.
Anything that is worth less than that is considered exempt by the civil laws, so you can keep it and your trustee cannot recover it during the bankruptcy process.
In the rest of Canada, there are clear laws about exemptions that cover things, like cars, tools that are used for working, and equity in your home.
Unfortunately, in Quebec, there are no defined laws to exempt these items.
Instead, it is decided on a case by case basis by the courts and no asset can be considered exempt without a prior declaration.
Exemption Laws in Quebec
There are, however, clear exemption laws for the cash value or loans held against a life insurance policy or RRSP in Quebec.
This only applies if the recipient of the policy is a direct descendant or ascendent (child or parent), or spouse of the person that is filing for bankruptcy.
The way that taxes are handled during bankruptcy is different in Quebec as well.
In the rest of Canada, when you file for bankruptcy, your tax refunds are considered an asset that will be collected by the trust and paid to your creditors.
You will fill out tax returns for the years prior to your bankruptcy, as well as the year that you file, and you will lose any returns.
However, in Quebec, your provincial tax refund is not considered an asset and you will be allowed to keep it.
Any solidarity tax credits (Quebec’s alternative to GST refunds) are not affected by your bankruptcy either.
If you are weighing up your different debt relief options and you live in the province, it is important that you ask, how does bankruptcy in Quebec differ?
If you still have any questions or you need more information about debt relief options in Quebec or any other area of Canada, get in touch today and we can answer all of your questions.
You can reach us on the phone or fill out an evaluation form and we will get back to you as soon as possible.