Giving Sydney man credit akin to giving child gun, bankruptcy ruling finds
A Cape Breton man who declared bankruptcy for the fifth time still owes $37,750 after a registrar of the Supreme Court of Nova Scotia refused to discharge him of the debt.
Gerard Francis Ongo, 54, of Sydney first declared bankruptcy 20 years ago. His recently filed again after racking up a car loan, payday loan and credit card debt, according to the decision from a Nova Scotia bankruptcy court registrar.
"Enabling … Mr. Ongo to have access to credit would be akin to providing a firearm to a child," wrote Raffi Balmanoukian in his decision, which was delivered Dec. 17 in Sydney.
He said Ongo, who works in the food industry, didn't appear to be "rogue or dishonest" — traits he saw referenced in other bankruptcy rulings.
However, Balmanoukian determined "not only is Mr. Ongo unable to operate within his business' means, but is also unable to operate within his own."
Balmanoukian said he had a responsibility to balance Ongo's interests with creditors', pointing out counselling for debtors has been in place through Ongo's previous bankruptcies: in 1998, 2000, 2005 and 2011.
Those instances were attributed to business-related tax and other debt.
Told to learn to live within his means
Balmanoukian ordered Ongo to disclose monthly income and expense statements until Feb. 2020 and said he can reapply for a discharge in 2028.
"That will interrupt the two-to-seven year pattern Mr. Ongo has had for the last 20 years, and bring him to the edge of his senior years," Balmanoukian said in his decision.
"Hopefully, that will do what the prior procedures and counselling have not done, namely instill the necessary habits to live within his cash flow."
The ruling also means Ongo must disclose his bankruptcy if he borrows more than $1,000. Failing to do so would violate the federal Bankruptcy and Insolvency Act.
When people who are bankrupt receive a discharge, they're not legally obligated to pay back what they owe, with some exceptions including child or spousal support.
A discharge usually happens automatically when it's a person's first or second time filing for bankruptcy so they don't have to go to court. People have to meet conditions including two financial counselling sessions and the discharge must not be opposed by creditors, a trustee or the Office of the Superintendent of Bankruptcy.
5-time bankruptcies rare across Canada
But when people file for a third time or more, it's up for a court to decide. There are a variety of possible outcomes, from wiping the debt to imposing conditions on getting rid of it.
"The main purpose of a discharge from bankruptcy is to release honest but unfortunate debtors from their debt, with some exceptions. The discharge from bankruptcy allows them to obtain a fresh start and to regain control of their finances," the federal Department of Economic Development, which oversees the Office of the Superintendent of Bankruptcy Canada, said in a statement.
When a discharge is refused, as it was in Ongo's case, creditors "are still entitled to be repaid and can take action to recover what is owed to them," the department said.
Between Jan. 1 and Nov. 30, 2018, there were 51,239 bankruptcies in Canada.
Across the country last year, there were 17 cases where people filed for bankruptcy for the fifth time or more. Over the previous four years, there was an average of 11 cases a year. None of these was in Nova Scotia.
