Bankruptcy & Consumer Proposals
While there are many options that can help you get relief from debt, Filing an Assignment in Bankruptcy may sometimes be necessary. Individuals who are unable to meet their debt obligations and do not have a reasonable expectation to do so in the near future can file for bankruptcy under the Bankruptcy and Insolvency Act (Canada). If you’re considering bankruptcy, a Licensed Insolvency Trustee can help assess your financial situation. Licensed Insolvency Trustees will also be a necessary part of handling any assets and will be responsible for the administration of bankruptcy until it is discharged.
A Licensed Insolvency Trustee can advise:
- If you’re eligible to file for Bankruptcy
- What the process for filing Bankruptcy entails
- What responsibilities you’ll have to successfully discharge your bankruptcy
- What happens to secured debts
- What belongings you will be able to retain
- How long your bankruptcy will remain on your credit rating
- When your bankruptcy will be discharged
Do I have to pay for Insolvency Services?
Yes. A Licensed Insolvency Trustee will charge fees for their services. These are minimal and meant to cover the cost of items such as administrative matters, and document and tax preparation as well as client management. Typically, these fees can be paid over time rather than in one lump sum.
What is a Consumer Proposal?
Unlike Filing an Assignment in Bankruptcy, a Consumer Proposal allows you to retain assets, while negotiating a formal arrangement between yourself (the debtor) and all creditors, in order to settle any outstanding debt obligations. This is a court approved agreement where one’s creditors have accepted the offer of the debtor as a total satisfaction of debts.
Once the Consumer Proposal process has begun, creditors are no longer able to begin (or continue) any legal actions against you. Furthermore, once your creditors have agreed to proceed with Consumer Proposal, they’re unable to demand any additional payments.
Your credit score will not be as adversely impacted, compared with filing for personal bankruptcy. Some clients can apply for secured credit lines, or secured car loans, even during the active course of their Consumer Proposal term.
Any individual who is bankrupt or insolvent, and whose total debts (excluding a mortgage on the debtor’s principle residence) do not exceed $250,000 is eligible to make a Consumer Proposal. If your debts exceed $250k, you may still offer a Proposal to your creditors. Talk to us to find out of a Consumer Proposal is right for you.
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We want to help you to get out of debt. Don’t hesitate to contact us if you would like to learn more about bankruptcy alternatives like debt consolidation or consumer proposals. Contact us today for more information.