Question: We are a numbered company. We have been struggling to keep our trucking business afloat, but going further behind each month. If our corporation files bankruptcy do we lose our personal assets, like our house and car?
Answer: If a corporation goes bankrupt, the owners of the corporation do not automatically go bankrupt; that’s one of the main reason for incorporating in the first place.
However, if you are a director of the corporation, and you have unpaid government source deductions or GST, the government can pursue you for those debts personally. Also, if you have personally guaranteed bank loans or leases, you can be pursued personally. In either case, it may therefore be necessary for you to go personally bankrupt in Ontario.
If you own a house with no mortgage and go bankrupt in Ontario, you will lose the house. The only way to keep the house in a bankruptcy would be to give the trustee the cash value of the house, which may be impossible, unless you have a family member who can help you raise the money. To keep the house, a proposal may be an option.
Your situation is complicated, and we have only given you a very brief answer to your question. We strongly recommend that you contact an Ontario trustee for a free initial consultation to review your options in more detail.