After writing and recording this blog, the Office of the Superintendent of Bankruptcy issued a position paper on measures to limit public disclosure of personal information while meeting legislative requirements to establish a public record. So watch next week for our video and blog titled “ONLINE BANKRUPTCY SEARCH: THIS CANADIAN INSOLVENCY RECORDS SEARCH RENEWAL (IRS) WON’T CHASE YOU FOR MONEY!” where we will describe what they have advised to date.
Bankruptcy filings free public records: Introduction
Ottawa’s planning to drop the $8 online search cost for personal bankruptcy records. The change to bankruptcy filings free public records may make it harder for some people. Especially those with earlier economic problems to get a job or a home.
Bankruptcy filings free public records: No cost personal bankruptcy records search
The Office of the Superintendent of Bankruptcy Canada is updating its online bankruptcy document search that allows users to get access to public documents on bankruptcy estates. Their database allows users to search online for bankruptcies as well as receiverships. The have not explained yet why they are considering dropping the search cost so that the information becomes bankruptcy filings free public records.
Bankruptcy filings free public records: Why does a licensed insolvency trustee need to search for bankruptcy filings
A licensed insolvency trustee (LIT) maintains an account with the Superintendent of Bankruptcy. A LIT is allowed to do a bankruptcy search through its account for free. The bankruptcy system requires a LIT, prior to accepting either a personal bankruptcy or consumer proposal file, to do such a search.
The reason is that a LIT is required to find if the person considering filing has ever used the Canadian insolvency system before. If they have, what were the circumstances and what was the outcome?
This is important because one aim of the Canadian insolvency system is rehabilitating the honest but unfortunate debtor. For the person who is currently in financial trouble, the LIT must understand past problems, if any. The LIT must also find if the current problems are a result of the same behaviour and reasons as in the past or something different.
The LIT then has a duty to take all these factors into consideration when advising the person what their options are and the recommendations the LIT will make.
Bankruptcy filings free public records: Who else normally searches bankruptcy filings public records?
Right now, for $8 per search, employers, property owners, marketers or just meddlesome neighbors can conveniently access minimal information about an applicant’s, occupant’s or neighbour’s bankruptcy data. This will allow them to make assumptions about that person’s financial problems, credit worthiness or even trustworthiness.
The problem in doing so is that it is without proper context. If the federal government eliminates the $8 search fee, personal bankruptcy records can be searched for free.
Bankruptcy filings free public records: Reasons for personal bankruptcy
Bankruptcy filings free public records: What will personal bankruptcy case records search show us?
A search only tells the:
- date when the specific person filed for bankruptcy or the consumer proposal;
- overall worth of their assets and obligations;
- name of the LIT;
- whether they successfully completed their consumer proposal or obtained their absolute discharge from bankruptcy; and
- discharge date of the LIT.
Bankruptcy filings free public records: Will this change to find personal bankruptcy records mean anything really?
The $8 cost likely limits random searches. A potential employer or landlord will not be deterred by this cost, but a nosy neighbour will be. This charge therefore provides some small security to personal information.
I believe the federal government earns about $4 million a year in bankruptcy search fees. That $4 million annually is a rounding error in terms of the size of the federal government’s budget.
However, in times where our Prime Minister Trudeau and our Finance Minister Morneau are looking to increase revenue, why give away $4 million? The government could use some of that money to give financial education to Canadians.
For the reasons I stated above, I doubt dropping the $8 search fee will increase the number of searches. You still have to know how to do the search. Nosy neighbours probably won’t spend the time to learn.
Equifax and TransUnion pay the Superintendent of Bankruptcy to get access to the bankruptcy search records. Therefore, the bankruptcy or consumer proposal information is available, if granted authorization, by obtaining a person’s credit report.
The Superintendent of Bankruptcy stated it will certainly protect the documents from trolling marketers. Exactly how they will do this has not been described. They also have not yet made public the date the searches will start to be free.
Bankruptcy filings free public records: Take our free consultation before your name appears in a Canadian bankruptcies search
If you have actually been declined for a loan through a normal lender, then that is a signal that you have debt concerns that have to be handled.
Contact Ira Smith Trustee & Receiver Inc. today. We are professional trustees. As such, the Canadian government licenses and supervises us. First, we will assess your situation and help you to come to the very best possible solution for your troubles.
When you come to us for your free consultation, we first check and figure out with you if one of the bankruptcy alternative choices is best for you. These include credit counselling, debt consolidation or a consumer proposal. If none of those options are available to you, only then will we discuss the bankruptcy route. Starting Over, Starting Now we can help recover you to financial health.