Credit Cards/ Bankruptcy

[gubby]

Since the possible bankruptcy of Crystal, I have read a few threads concerning getting monies returned in the case of a company going bankrupt with your money in a cruise line account. Of course, the majority of the posters are from the USA. What is the law here in Canada. And on a slightly different note, what about a foreign flagged company and a cc from a Canadian bank. We are planning a Grand Voyage to South America/Antarctica for Jan. 2023. Because of the past 2 years of cancelled cruises, we decided to use that unused money for one big blowout. Between 30 and 40K Cdn.  While I am willing to hand it over for a cruise, I would be upset to lose it because of a bankrupt cruise company. At this point,  we have 6K tied up in a refundable deposit.  There are payments due in June and October.

Hoping that HAL and all other companies stay solvent, but would like to understand my rights. I read my CC agreement and cannot find any clause that pertains to this. At least I don 't understand any. I hope someone can set my mind to ease. Thanks.

[lots-of-km2]

This news item suggests not waiting -- but to cancel now for a full refund:

https://www.nbcmiami.com/news/local/miami-judge-issues-arrest-warrant-for-crystal-cruises-ship/2667909/

 

Some articles online refer to Crystal as already-bankrupt. I don't know if that's accurate but the company must be in dire straits if a warrant for seizure of a Crystal ship has been issued.

 

Definitely worth calling your credit card company and asking specifically about implications of a cruise company's bankruptcy on recovering your deposit. 

 

Edited January 24, 2022 by lots-of-km2

[iancal]

I looked at this because of another vendor situation a little while ago.

 

Seems to me one of our credit card issuers had time limit of six months for challenging a charge.  Not sure about the others.

[crickette]

If you cancel it is one thing.  If the cruiseline cancels, it is another.

 

If you have the cruiseline cancellation in writing, with the words promising a refund, both VISA and Mastercard give the cruiseline 15 days to process the refund.  If not received you can begin the to dispute the payment (both deposit and final)  under the heading "services paid for, not received".

 

If your credit card payment was to a third party, the wait time is 30 days.

 

If you cancel, you need the cruiselines written cancellation also describing the refund they consider you are entitled to.  

 

This is for "recent" payments.  I have heard a maximum of 11 months back, but I don't know for sure.

 

Call the credit card dispute number and ask.  Have ready the cancellation letter (date, actual wording) and a copy of the booking confirmation (dates, embarkation/disembarkation ports, etc)

 

Hope this helps.

[Fouremco]

I'm no lawyer, so the are just some thoughts on the issues.

 

In general, once bankruptcy has been declared and a trustee appointed, there is a priority ranking of creditors. This might vary from country to country, but in Canada, under the Bankruptcy and Insolvency Act,  proceeds from the sale of assets are distributed to repay creditors in the following order:

• Secured creditors
• Reasonable funeral and testamentary expenses in respect of a deceased bankrupt
• Administration costs related to the estate such as the expenses and fees of the trustee
• A levy on dividends paid to secured, preferred and unsecured creditors
• Various types of unsecured but "preferred creditor" claims, including, certain employee claims, certain types of child and spousal support claims, some types of municipal taxes, claims by landlords, and certain claims for pre-bankruptcy execution fees and costs
• Unsecured creditors with no unique priority

I would imagine that cruise passengers would belong in the last category, and that there would be only a slim chance of recovering deposits and payments.

 

In the case of a declared bankruptcy, I don't believe that the credit card companies would be of any assistance. In situations where they would normally reimburse you, it's my understanding that they only do so knowing that they in turn will be reimbursed by the cruise line. But if the cruise line has declared bankruptcy, the credit card company isn't about to take the loss by reimbursing you with no offsetting restitution for them from the cruise line.

 

I don't know if HAL is any more or less likely to declare bankruptcy over the next year when compared to other cruise lines, but in these uncertain times, I would be reluctant spending $30-$40 K CAD to find out. Fortunately, you have six months before you need to make a decision. By then, there may be a better picture available of HAL's financial status and that of parent CCL.

 

In the mean time, it would probably be worth your while talking to your credit card company to be 100% sure of its policy. It would also be advisable to do some research on your potential status as a creditor in a foreign bankruptcy. 

 

So, those are my musings. Hopefully someone with professional experience can shed greater light on your issue. BTW, while the dollar amounts may not be as high, I'm sure that there are meany readers with similar concerns.

 

 

 

 

 

 

 

[dawnvip]

@Fouremco You are correct, and took the words right out of my mouth. 

For bankruptcy purposes, we are considered unsecured creditors and therefore way down the list... as far as Canadian registered companies go. I believe that you would have to check what the bankruptcy rules are in the country of a foreign registered cruiseline but my guess is it would be similar to ours.

 

There may be some protection through your travel agent and/or credit card - so it pays to ask!

[gnome12]

This is a reason to book through a TICO registered travel agent (in Ontario) and their equivalents in other provinces.

https://www.tico.ca/consumers/overview

[Fouremco]

10 minutes ago, gnome12 said:

This is a reason to book through a TICO registered travel agent (in Ontario) and their equivalents in other provinces.

https://www.tico.ca/consumers/overview

Very helpful. I was aware of the protection in the event that the travel agent/agency went bankrupt, but I didn't realize that the same applied to the bankruptcy of the end supplier. Thank you for the information!

[crickette]

Thanks.  The link implies the dollars are paid to the TA.  Do many people pay the TA?  While we use a TA, and have an excellent one who we are pleased to rave about - our monies are paid to the cruiseline or the airline via credit card.  I assume this excludes us from a TICO claim, or one in another province.

[Fouremco]

1 minute ago, crickette said:

Thanks.  The link implies the dollars are paid to the TA.  Do many people pay the TA?  While we use a TA, and have an excellent one who we are pleased to rave about - our monies are paid to the cruiseline or the airline via credit card.  I assume this excludes us from a TICO claim, or one in another province.

That's what I thought, but the wording of the link provided by @gnome12 suggests otherwise, at least to me:

 

Subject to the Regulation, the Fund provides reimbursement of monies paid to an Ontario registered travel agent for travel services that are not provided due to the bankruptcy or insolvency of an Ontario registrant or an end supplier airline or cruise line, where a reimbursement has not otherwise been provided.

[crickette]

1 minute ago, Fouremco said:

That's what I thought, but the wording of the link provided by @gnome12 suggests otherwise, at least to me:

 

Subject to the Regulation, the Fund provides reimbursement of monies paid to an Ontario registered travel agent for travel services that are not provided due to the bankruptcy or insolvency of an Ontario registrant or an end supplier airline or cruise line, where a reimbursement has not otherwise been provided.

Not to argue, please understand. 

Subject to the Regulation, the Fund provides reimbursement of monies paid to an Ontario registered travel agent for..

[Fouremco]

38 minutes ago, crickette said:

Not to argue, please understand. 

Subject to the Regulation, the Fund provides reimbursement of monies paid to an Ontario registered travel agent for..

Thanks, @crickette. After reading your post and rereading the text you've highlighted, I'm happy to say that I've changed my mind and agree with you fully.  

 

And please, never refrain from providing a different point of view. Your post is an excellent example of how we can all benefit from a different perspective presented in a friendly fashion.

[crickette]

1 hour ago, Fouremco said:

Thanks, @crickette. After reading your post and rereading the text you've highlighted, I'm happy to say that I've changed my mind and agree with you fully.  

 

And please, never refrain from providing a different point of view. Your post is an excellent example of how we can all benefit from a different perspective presented in a friendly fashion.

You are most kind.

[gubby]

How refreshing to read different points of view that are presented in a friendly and mannerly way instead of belligerent and calling one another disrespectful names. Also my sincere thanks to all who have certainly given us some idea of the chances we would have to recover any funds due to a cruise line bankruptcy. We will have to do some heavy thinking as to when or if we make further payments for the Grand Voyage on HAL.

Of course, in a perfect world, not only do all cruise lines, airlines and travel suppliers stay solvent, and profitable, but the horrible pandemic becomes very manageable,  thus sparing our brave and exceptional health care workers and the system we rely on.