Tag: bankruptcy filings

Categories
Brandon Blog Post

BANKRUPTCY LAWYER: IS ONE ESSENTIAL TO FILE FOR BANKRUPTCY IN ONTARIO?

bankruptcy lawyer
bankruptcy lawyer

Bankruptcy lawyer: Introduction

Step right into this week’s edition of Brandon’s Blog, where we’re embarking on a profound exploration. Our focus today delves into a crucial theme that carries substantial weight within the psyche of a myriad of Canadian consumers grappling with financial adversity, as well as Canadian business owners navigating their enterprises with too many business debts through fiscal quandaries. The question at the forefront: do the circumstances warrant enlisting the expertise of a bankruptcy lawyer when contemplations of insolvency filings in Canada take center stage?

Venturing through the intricate landscape of insolvency and the realms of personal or corporate bankruptcy has the potential to stir feelings of frustration and helplessness. This sentiment amplifies mainly when the trajectory of your personal or corporate fiscal destiny hangs in a precarious balance, swaying like a delicate pendulum. The gravity of making prudent choices during this trying juncture cannot be overstated. At its core, lies the quintessential need to not only identify the right course but also to discern the adept professional from whose wellspring of wisdom guidance should be sought.

In this Brandon’s Blog, I will outline the scenarios in which consulting with a bankruptcy lawyer is highly advised, but as you will see, it is not essential in every circumstance. Whether you are taking into consideration submitting a restructuring proposal or seeking bankruptcy protection, recognizing who to turn to for specialist assistance for legal and financial advice can substantially affect the result of your financial journey.

I will discuss the intricate details surrounding insolvency as well as bankruptcy law in Canada. By diving into the significance of professional assistance and support, I intend to equip you with the understanding needed to make enlightened decisions during this difficult phase. Join me as we decipher the secrets of insolvency and bankruptcy and empower ourselves to safeguard a better financial future.

Bankruptcy lawyer: Overview of the insolvency and bankruptcy process in Canada

The bankruptcy procedure in Canada is governed by the Bankruptcy and Insolvency Act (BIA). It is a legal statute developed to supply relief to people and companies that are unable to pay their financial obligations. The process always includes the services of a Licensed Insolvency Trustee that is responsible for administering the insolvency process.

The Licensed Insolvency Trustee is first required to assess the debtor’s entire financial situation, including the causes of the insolvency, the current financial position and the nature of the assets and liabilities of the debtor. The Licensed Insolvency Trustee then needs to make recommendations to the debtor to solve their current financial crisis. Once agreed on, what insolvency or bankruptcy process will be implemented, the BIA and the restructuring consumer proposal, Division I proposal or the bankruptcy, is put into operation to offer a fresh start for the debtor while making certain there is fair treatment for the creditors.

A Licensed Insolvency Trustee is the only professional licensed in Canada by the federal government to administer the Canadian insolvency process chosen. In many cases, the process can be carried out without the advice of a bankruptcy lawyer.

bankruptcy lawyer
bankruptcy lawyer

Bankruptcy lawyer: Formal insolvency options in Canada

Navigating the intricate labyrinth of bankruptcy within Canada unfurls as a legal undertaking of profound significance, extending its benevolent embrace to both individuals and enterprises ensnared within the inescapable clutches of their fiscal commitments. This orchestrated progression finds its regulatory compass in the venerable BIA, its vigilant guardianship entrusted to a duly licensed sentinel of fiscal adversity, recognized as a Trustee.

Commencing this odyssey, the debtor sets forth to formally lodge their supplication for bankruptcy, an entreaty promptly received by the Licensed Insolvency Trustee, who, in turn, undertakes the judicious scrutiny of the debtor’s economic constellations. From this intricate appraisal blooms a stratagem, a masterwork designed to navigate the undulating terrain of debt repayment, fostering equilibrium amid the ranks of creditors.

Through the procession of this intricate ballet, the debtor finds sanctuary from the clamorous onslaught of creditor collections, an ephemeral respite nestled within the folds of the overarching process. This respite, however, is not a sojourn of idle reprieve; it entails the debtor’s obligatory participation in the convocations of credit counsel, a didactic interlude intended to illuminate the labyrinthine corridors of fiscal wisdom.

Once the intricacies of this design garner the seal of approval, the gears of asset liquidation are set into motion, unfurling a cascade of transactions wherein the debtor’s holdings metamorphose into liquid currency, a tribute disseminated among the consortium of creditors who await their apportioned spoils.

The culmination of this voyage heralds the debtor’s liberation from the shackles of residual indebtedness, a phoenix rising from the embers of fiscal duress, reborn into a realm unburdened by the obligations that once ensnared them.

The formal insolvency options in Canada are described below.

Insolvency and debt relief solutions for individuals –

  • Restructuring by making monthly payments under a consumer proposal for those who owe $250,000 or less (not including any debts secured by and registered against a person’s residence).
  • Financial restructuring under a Division I proposal, for those who owe more than $250,000.
  • Personal bankruptcy.

Insolvency and debt relief options for companies –

  • Financial restructuring under a Division I proposal as an alternative to bankruptcy.
  • Sale of assets through a receivership enforcement process initiated by a secured creditor.
  • Restructuring for companies that owe $5 million or more under the Companies’ Creditors Arrangement Act (CCAA).
  • corporate/business bankruptcies..

In certain situations, looking for the advice of a Canadian bankruptcy lawyer is of utmost significance. An insolvency or bankruptcy filing is an intricate legal process that needs careful consideration of an individual’s financial scenario. A bankruptcy legal representative can assist with whether corporate or personal bankruptcy, as the case may be, is the best option, the kinds of insolvency processes readily available, and the connected lawful obligations and effects.

Furthermore, individuals can seek assistance from a bankruptcy lawyer to guide them through the legal procedures. It is highly recommended that consumer debtors seek advice from both a licensed insolvency trustee and a bankruptcy lawyer in certain circumstances. Some typical scenarios that warrant additional counsel from a bankruptcy lawyer well-versed in insolvency law include:

  1. They are involved in complex family law proceedings.
  2. There are one or more legal actions against you that allege unlawful behaviour, such as fraud or fraudulent misrepresentation or the conversion of someone else’s property, such as funds held in trust.
  3. The bankrupt’s application for discharge from bankruptcy is being opposed and therefore there will be a court hearing.
  4. Their financial situation is intertwined with other issues where confidential consultation with legal advice is required and that advice must be protected by solicitor-client privilege.
  5. There are special asset considerations where a privileged discussion with a bankruptcy lawyer is essential before seeking advice and assistance from a Licensed Insolvency Trustee.

In corporate insolvency situations, we always recommend that the Directors obtain legal advice from a bankruptcy lawyer in addition to the corporation obtaining legal assistance.

A bankruptcy lawyer can provide customized guidance in such touchy situations as well as representation to guarantee the most effective feasible outcome for their clients.

bankruptcy lawyer
bankruptcy lawyer

Can I file for bankruptcy without a bankruptcy lawyer in Canada?

While it is possible to declare bankruptcy without a bankruptcy lawyer in Canada, it is recommended to seek legal counsel for complex corporate and personal filings. Hiring a bankruptcy attorney supplies several advantages, including knowledge of insolvency legislation, assistance in more complex proceedings and guidance on unusual issues, specific unique creditor issues or claims and personal liability under any personal guarantees.

In addition, a bankruptcy lawyer can represent you in court proceedings such as with litigants who have obtained approval of the court to continue litigation against the debtor and on a personal bankruptcy discharge hearing. This will guarantee that your legal rights are safeguarded throughout the process. Therefore, in these kinds of consumer and corporate insolvency matters, it is smart to talk to a qualified bankruptcy lawyer to ensure a smoother and much more successful bankruptcy process in Canada.

Determining the necessity of enlisting the services of both a bankruptcy lawyer and a Licensed Insolvency Trustee: Is a bankruptcy lawyer required to initiate bankruptcy proceedings in Canada?

Filing for bankruptcy in Canada can be a complex as well as stressful process, however, as defined above, it is feasible to do it without the help of a bankruptcy lawyer. A bankruptcy lawyer cannot launch the bankruptcy process in Canada. In Canada, bankruptcy, as well as any other insolvency process, is launched and administered by Licensed Insolvency Trustees that are qualified and also supervised by the Office of the Superintendent of Bankruptcy (OSB). So when someone files for bankruptcy, it is done with a trustee in bankruptcy (this is the old name for a Licensed Insolvency Trustee).

Trustees are accountable for overseeing and handling the Canadian bankruptcy and insolvency procedures, including the liquidation of assets and the distribution of proceeds to creditors for unsecured debts. They additionally offer debtors financial counselling, therapy and support on how to handle their financial resources in the future. To end up being a Trustee, people need to satisfy particular educational and professional requirements, consisting of completing specialized training, courses and examinations. Thus, Canadians can trust that their insolvency, as well as personal bankruptcy procedures, are being managed by qualified and also experienced professionals.

Regardless of the guidance and aid regarding your financial affairs from a Licensed Insolvency Trustee before and also after the initiation of a financial restructuring or personal bankruptcy process, a Licensed Insolvency Trustee practically acts on behalf of the unsecured creditors. So, for circumstances like those described above, if any debtor has an extra complicated scenario, is associated with sticky scenarios or is concerned about the director or personal responsibility as a result of a business restructuring or bankruptcy, then the recommendations of a bankruptcy lawyer should be acquired before entering into any insolvency procedure.

bankruptcy lawyer
bankruptcy lawyer

Bankruptcy lawyer and a Licensed Insolvency Trustee: Determining the necessity of enlisting the services of both a bankruptcy lawyer and a Licensed Insolvency Trustee

There arise certain junctures where the imperative of engaging a proficient bankruptcy lawyer to adroitly navigate the intricate labyrinth of the Canadian bankruptcy process becomes unequivocal. As expounded upon earlier, should your fiscal panorama manifest intricacies reminiscent of a Byzantine tapestry, replete with an entanglement of debts and creditors, the tutelage and expertise proffered by a bankruptcy lawyer morph into an invaluable compass.

The determination of the exigency to enlist the services not only of a bankruptcy lawyer but also of a bankruptcy trustee constitutes a pivotal crossroads for both individuals and enterprises ensnared in the throes of financial quandaries. While a bankruptcy lawyer adroitly dispenses legal counsel and advocates in the corridors of justice, a bankruptcy trustee’s role expands to encompass the labyrinthine realm of debt reorganization, proposal filings, and the art of debt alchemy. Their convergence encapsulates a holistic stratagem in the pursuit of resolving the monetary labyrinth.

Grasping the complexity inherent in bankruptcy law is tantamount, and a seasoned bankruptcy lawyer deftly steers through the legal firmament, charting a course that aligns with the best nexus of legal tenets. Conversely, a Licensed Insolvency Trustee proffers a detached analysis of the financial constellation, endowing clients with an array of options extending beyond the binary realm of bankruptcy and answering any questions about bankruptcy you may have.

At its essence, the verdict to summon forth both the prowess of a bankruptcy lawyer and the sagacity of a Trustee should hinge upon the unique tapestry woven by individual circumstances and the crystalline aspirations of the client. Ultimately, it comes down to the complexity and sensitivity of the person’s or company’s overall situation.

How to find a qualified bankruptcy lawyer or Licensed Insolvency Trustee in Ontario

When confronted with financial troubles in Canada, it’s important to make informed choices. If you’re thinking about bankruptcy, it’s smart to seek guidance from a Licensed Insolvency Trustee. These professionals can assist you through the intricate procedure and also give important understanding.

For those with especially complicated financial circumstances, or who is a corporate director of an insolvency company, it might be essential to employ the help of a seasoned bankruptcy lawyer.

Starting your search for trustworthy professionals can be frustrating. Nonetheless, a calculated strategy can aid. Begin by discovering the Law Society of Ontario’s website, where you’ll discover a comprehensive list of competent legal experts that concentrate on bankruptcy and insolvency.

To locate a bankruptcy trustee near you, explore the computerized database of the OSB. This will certainly give a list of bankruptcy trustees in your locale to seek insight, advice and assistance. For both a bankruptcy lawyer as well as a Trustee, it is essential to engage in a comprehensive conversation with any prospective advisor, delving into their specialist background, navigational technique, and cost structure.

Efficiency is not the only aspect to think about; reliability and also the personal vibe you get from that person to see if you make a connection are likewise essential elements that need to inform your decision. By locating an ally who can give adept support throughout this challenging period, you can navigate this hard juncture with greater ease as well as confidence.

Finally, check out Google and other online reviews. There is nothing better than reviews from people who were in your shoes before and sought assistance from a Licensed Trustee, bankruptcy lawyer or both. Their experience and insight into specific professionals will help you immensely. Things to look for include:

  1. What service did they perform for the person?
  2. Does the reviewer live in your general area?
  3. Did the professional do a good job?
  4. What were some of the reviewer’s favourite things in working with that professional?
  5. Did they work with any specific people in the firm that they highly recommend?
  6. How did the Licensed Insolvency Trustee or bankruptcy lawyer they chose to compare to others they may have consulted with?
  7. Are there any tips the reviewer offers to others?

Bankruptcy lawyer: Conclusion

Looking for legal advice when considering bankruptcy is not needed in every scenario. However, it is necessary when it concerns complicated plans. Hiring a qualified bankruptcy lawyer can provide countless benefits. They have the proficiency as well as knowledge to advise you before embarking on a bankruptcy process and afterwards to assist you with the whole procedure.

When considering filing an assignment in bankruptcy in Canada, it is crucial to comprehend the complexities of the process and also the potential effects. While it may be possible to navigate through it without an insolvency lawyer, talking to one will supply the specialist expertise necessary to guarantee a smooth and efficient process when you have complex or unique issues in your situation.

From evaluating your financial situation to exploring alternatives such as a restructuring proposal, a bankruptcy lawyer can direct you through the legal puzzle and also suggest the most ideal strategy. When it concerns matters as substantial as bankruptcy, seeking expert help is a sensible choice to secure your best interests and also secure a fresh financial start.

I hope you enjoyed this bankruptcy lawyer Brandon’s Blog. Problems with making ends meet are a growing concern in Canada, affecting individuals of all ages and income levels.

Creating a solid financial plan can be the key to unlocking a brighter and more prosperous future. By taking control of your finances, you can prioritize your expenses, set clear financial goals, and build a strong foundation for your dreams to come true. With the right mindset and approach, financial planning can empower you to regain control, eliminate this issue as a source of stress in your life and find peace of mind.

Individuals must take proactive measures to address financial difficulties and promptly seek assistance when necessary. It is crucial to recognize that financial stress is a prevalent concern and seeking help is a demonstration of fortitude, rather than vulnerability. Should you encounter challenges in managing your finances and find yourself burdened by stress, do not delay in pursuing aid.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses with debt problems that are in financial distress. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind.

The Ira Smith Team understands these financial health concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own and it does not mean that you are a bad person. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses innovative and cutting-edge methodologies, to adeptly navigate you through the intricacies of your financial challenges, ensuring a resolution to your debt-related predicaments without resorting to the rigours of the bankruptcy process. We can get you debt relief now!

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a Trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

bankruptcy lawyer
bankruptcy lawyer

 

 

 

Categories
Brandon Blog Post

CONTACTING AN ONTARIO LICENSED INSOLVENCY TRUSTEE: PREPARE TO GET THE BEST RESULTS FROM YOUR INITIAL CONSULTATION

trustee

<h2>

Licensed insolvency trustee

If you’ve found yourself grappling with personal debt, or your company is in a tight spot because of corporate debt, seeking the guidance of a licensed insolvency trustee is a smart choice. Trustees possess the expertise and resources to assist you in navigating your financial predicament and getting back on the right course.

Before engaging in a conversation with a licensed insolvency trustee, it’s crucial to adequately prepare yourself to make the most of your preliminary consultation. This Brandon’s Blog outlines the essential steps that need to be taken to ensure a fruitful discussion. By adhering to these recommendations, you can be confident that you will derive maximum benefit from your complimentary consultation and obtain the necessary advice to chart your path toward resolving your financial challenges.

Without any further delay, let’s explore the preparations required for your initial consultation with an Ontario Trustee.

Understanding the role of an Ontario licensed insolvency trustee

An Ontario licensed insolvency trustee is a crucial player when it comes to handling financial troubles. Their key function is to help individuals and businesses in navigating the insolvency landscape and find the most effective and feasible options. Trustees are highly educated and licensed specialists who have a deep understanding of the federal government’s Canadian bankruptcy and insolvency legislation and how to apply it in every situation.

When you are drowning in personal or business debt, a Trustee can be your guiding light. They will assess your financial scenario, assist you to recognize your rights and realistic options, and offer experienced advice tailored to your personal story. Whether it’s recommending a debt consolidation loan, outlining the consumer proposal process, strategizing on the financial restructuring of businesses with debt problems or assisting in a personal bankruptcy filing, Trustees can help you get through the one that is best for you, making certain that you make educated choices each step of the way.

It is very important to note that Trustees are objective debt professionals. They aim to discover a reasonable and fair resolution that takes into consideration both your needs and the legal realities that your creditors face. So, if you’re facing economic obstacles and require someone with competence to guide you through the maze, a Trustee is definitely the individual to rely on.trustee

When should you consult a Trustee?

Navigating financial difficulties can be a challenging and overwhelming experience. If you find yourself struggling with mounting debts and unsure about the best way forward, it may be time to consult a licensed insolvency trustee. We specialize in helping individuals and businesses regain control of their financial situations. But when exactly should you seek our expertise? Here are some key scenarios where consulting a Trustee can be beneficial:

  1. Increasing debt burden: If your debts are continuously piling up, and you find it difficult to make timely payments, it’s a red flag that you should consult a licensed insolvency trustee. They can assess your financial situation, evaluate your debts, and provide guidance on the available options to alleviate your debt burden.
  2. The threat of legal action: When creditors are making their collection calls and are threatening legal action or have already initiated collection action, it’s crucial to seek professional assistance. A licensed insolvency trustee can help you understand your rights, explore potential solutions, and negotiate with creditors on your behalf.
  3. Loss of income or job: Sudden job loss or a significant reduction in income can have a severe impact on your financial stability. If you’re facing difficulties meeting your financial obligations due to these circumstances, consulting a licensed insolvency trustee can help you navigate through the challenges and explore strategies for recovery.
  4. Inability to repay debts: In the event that you have arrived at the point where the repayment of debts is no longer feasible, despite having explored alternative methods such as debt consolidation or negotiation, it is time to enlist the services of a Trustee who will offer guidance in navigating the insolvency process.
  5. Mounting stress and anxiety: The mounting stress and anxiety that often accompanies financial difficulties can have a debilitating impact on one’s mental and emotional well-being. Should you find yourself feeling overwhelmed, consistently stressed, or experiencing anxiety as a result of your financial situation, don’t hesitate to seek the guidance of a licensed insolvency trustee.

Remember, consulting a licensed insolvency trustee is not limited to these scenarios alone. If you have any concerns about your financial situation or feel uncertain about the best course of action, it’s always wise to seek professional advice. These experts can evaluate your unique circumstances and provide tailored solutions to help you regain control of your finances and pave the way toward a brighter financial future.

Importance of preparation for an initial consultation with the Trustee

Preparation is key when it comes to your initial consultation with an Ontario-licensed insolvency trustee. This is the moment where you get to meet and chat about your financial situation, explore possible solutions, and set yourself on the path to financial recovery. So, why is preparation so important? Well, here’s why:

First off, being prepared helps you make the most of your time with the Trustee. This consultation is a limited window, no longer than 1 hour, so having your ducks in a row and providing accurate information upfront allows the Trustee to understand your situation quickly and give you tailored advice. Time is precious and there is none to waste!

In order to optimize the benefits of your consultation with a Trustee, it is crucial to first correctly prepare for it. By devoting some time to think about how you got to your current financially challenged state, to consider your financial goals and concerns, you can establish a definitive plan of action. This will facilitate a focused and productive dialogue during the consultation, ensuring that the Trustee can address your unique needs with precision and efficiency.

It behooves you to also undertake thorough data collection and organization. This entails meticulously gathering and cataloging all pertinent information related to your financial history, liabilities, assets, income, and expenditures. By undertaking this preparatory work, you will be equipped with a comprehensive and precise understanding of your financial landscape. This will enable the Trustee to offer optimal guidance and recommendations that are tailored to your specific financial needs.

It is crucial to have a comprehensive understanding of the available debt relief options in Canada. Conducting thorough research beforehand allows you to enter the consultation with a well-informed perspective, equipped to ask pertinent questions, evaluate potential risks and benefits, and make prudent decisions regarding your financial future. This sense of empowerment is invaluable.

It is equally essential to consider the Trustee’s credentials and suitability. As a discerning individual, you must assess the Trustee’s expertise, approach, and values to ensure a fruitful partnership. Investing time and effort to gather recommendations, read reviews, and gauge compatibility will guarantee that you have selected a competent professional with whom you can establish an excellent working rapport.

Last but not least, when you come prepared, you exude confidence and engagement. Your thorough preparation gives you a boost of self-assurance, knowing that you’ve done your homework. This means you can actively participate in the consultation, ask relevant questions, and make the most of the Trustee’s guidance. It’s the difference between being in the financial game or being mired and lost!

To sum it all up, preparation is the secret sauce for a successful initial consultation with an Ontario licensed insolvency trustee. It helps you make the most of your time, gain clarity, gather necessary info, understand your options, evaluate the Trustee, and approach the discussion with confidence and engagement. So, put in the effort, get prepared, and get ready to pave your way to financial recovery and stability.trustee

The benefits of speaking with an Ontario Licensed Insolvency Trustee before you make any financial decisions

The benefits of speaking with an Ontario licensed insolvency trustee before you make any financial decisions.

Engaging in dialogue with an Ontario Trustee prior to making any financial determinations can yield considerable advantages. An Insolvency Trustee holds the expertise to both understand and dissect your financial problems and circumstances and acquaint you with the array of choices at your disposal. Trustees possess the proficiency to appraise your financial state and counsel you on the optimal resolution for your particular predicament. The Trustee, like me, may also hold the designation of Chartered Insolvency and Restructuring Professional.

If you find yourself facing economic challenges, it could be a good idea to get in touch with an Ontario Trustee. These professionals are skilled in offering counsel and guidance to individuals and companies grappling with monetary issues. They hold a license and are regulated by the Office of the Superintendent of Bankruptcy Canada. By seeking assistance from a Trustee, you can obtain the support necessary to navigate the intricacies of financial predicaments. Through their aid, you will acquire valuable insights that can influence your decision-making and guide you toward a more prosperous financial future.

Financial assessment

One of the primary benefits of consulting with an Ontario Trustee is receiving a comprehensive financial assessment. LITs possess the expertise to review your financial situation objectively, taking into account your assets, debts, income, and expenses. This assessment allows them to gain a holistic understanding of your financial standing and identify potential solutions tailored to your specific needs.

Debt relief options explained

In times of financial adversity, it is imperative to have an in-depth understanding of the various debt relief options at your disposal. By consulting with a qualified Ontario Trustee, you can gain comprehensive insights into potential solutions, including debt consolidation, consumer proposals, and bankruptcy.

Trustees will inform you of the benefits and drawbacks of each alternative, offering a complete assessment of the potential outcomes and consequences associated with any given choice. Rest assured that with their guidance, you can make an informed decision that will alleviate your financial distress and pave the way toward a brighter fiscal future.

Tailored solutions for your unique situation

Every individual’s financial situation is unique, and what works for one person may not work for another. By consulting with a Trustee, you gain access to personalized solutions that address your specific circumstances. LITs take the time to understand your financial goals, evaluate your resources, and design a strategy that maximizes your chances of achieving a stable financial future.

When you find yourself struggling with overwhelming debt, it’s common for creditors to take legal action against you. Seeking assistance from a Trustee can help you navigate these legal challenges. LITs can provide protection from creditors who have started legal proceedings. An insolvency process will invoke a stay of proceedings, that puts a temporary halt on creditor actions, giving you breathing room to implement one of your potential debt relief solutions.

Expert negotiations with creditors

Engaging with creditors and negotiating debt repayment terms can be a daunting and stressful process. However, an Ontario Licensed Insolvency Trustee takes that job and all the stress that comes with it off your shoulders, by being the one negotiating with your creditors. Their expertise and knowledge of the legal and financial framework ensure that you receive fair treatment and that your rights are protected throughout the process.

Financial education and future planning

Speaking with an Ontario Trustee offers more than just immediate debt relief. LITs can provide financial education and guidance to help you develop healthy financial habits and plan for a more secure future. They can offer advice on budgeting, saving, and rebuilding credit, equipping you with the necessary tools to achieve long-term financial stability. Two mandatory financial counselling sessions are part of the services to individuals included automatically in any consumer insolvency process.

The key questions to ask to gain a better understanding of the process and your options

In order to optimize the outcome of a discussion with a Trustee regarding your financial situation, it is imperative to approach the exchange with a clear and organized mindset. Engaging in dialogue with a trustee can furnish indispensable observations and aid in discerning informed resolutions for your fiscal outlook. The following segment offers advantageous suggestions to anticipate the tenor of the conversation and how best to equip yourself for it, guaranteeing that you derive the utmost advantage from your interaction with the trustee.

1. Gather Relevant Financial Documents

It is crucial to gather all pertinent financial documents ahead of time. This includes bank statements, tax returns, credit card statements, loan agreements, and any other records that pertain to your financial situation. By providing the Trustee with a full picture of your financial standing, they can deliver practical advice and personalized solutions that are tailored to your unique circumstances. Don’t leave anything behind – come prepared with all the necessary information.

Before meeting with a Trustee, gather all relevant financial documents, such as bank statements, tax returns, credit card statements, loan agreements, and any other records pertaining to your financial situation. These documents will provide the Trustee with a comprehensive understanding of your financial standing, enabling them to offer accurate advice and tailored solutions.

2. Be Transparent and Honest

It’s crucial to be open, transparent, and honest about your financial circumstances during the conversation with the Trustee. A professional code of ethics and confidentiality binds them, so you can feel confident in sharing sensitive information. Providing a complete and accurate picture of your financial situation will enable them to offer the best possible guidance and solutions.

3. Prepare a List of Questions and Concerns

To make the most of your conversation with the Trustee, prepare a list of questions and concerns in advance. Consider what specific areas of your financial situation you’d like to address or any uncertainties you may have. Having a well-prepared list will ensure that you cover all relevant topics and get the information you need during the discussion.

4. Understand the Available Options

Educate yourself about the various debt relief options available to you before the conversation with the Trustee. Research bankruptcy laws, debt consolidation, consumer proposals, and other relevant solutions. This background knowledge will allow you to have a more meaningful discussion with the Trustee, as you can ask targeted questions and better understand their recommendations.

5. Take Notes During the Conversation

During your conversation with the Trustee, it’s helpful to take notes. Jot down key points, advice, and recommendations provided by the Trustee. These notes will serve as a reference later on and help you recall important details when making decisions about your financial situation.

6. Ask About Potential Consequences and Long-Term Implications

Inquire about the potential consequences and long-term implications of different debt relief options. Understanding the pros and cons, as well as any legal or financial ramifications, will enable you to make an informed decision. The Trustee can provide insights into how each option may impact your credit score, assets, and future financial stability.

7. Discuss a Realistic Financial Plan

Collaborate closely with the Trustee to formulate a pragmatic and attainable fiscal blueprint. This comprehensive scheme must harmonize with your aspirations while considering your revenue, expenditures, and liabilities. Leveraging the Trustee’s proficiency, forge a viable budget and delve into tactics that can curtail your debt burden and enhance your long-term financial standing.trustee

How to follow up after the consultation with the licensed insolvency Trustee to ensure all your concerns are addressed before making any decisions

After finishing your initial consultation with a licensed insolvency trustee, there will always be some lingering questions or concerns. You should always follow up with the Trustee to clear up any confusion. It is definitely a lot of information to digest in one consultation. This will empower you to better understand the process, your available options, and any further actions you may be required to take.

Be sure to take notes of all crucial details discussed during the session and jot down any additional questions that come to mind. You may contact the Trustee via phone or email to seek clarification on any doubts or queries before making any critical financial decisions. By engaging in a follow-up conversation with your Trustee, you can ensure that you are fully informed and confident in your financial decisions.

Common things that people want to know from the Trustee during the initial consultation

What are my debt solution options? A Trustee provides a wide range of options for debt relief that are tailor-made to suit your specific needs. For individuals, this could involve presenting a consumer proposal or a Division I restructuring proposal to unsecured creditors, allowing you to negotiate a repayment plan based on your financial capacity. For corporations, if timely intervention is possible, it may entail financial restructuring. Your Trustee will carefully consider the pros and cons of each option and recommend the most suitable course of action based on your unique circumstances. In certain cases, bankruptcy may be the only viable solution.

How will this affect my credit score? Many individuals express concerns about potential negative impacts on their credit score when meeting with a Trustee. However, it is important to note that the act of simply meeting with a Trustee does not have any direct impact on your credit score. It is the chosen insolvency process itself that can have an effect on a person’s credit rating.

What are the costs involved? When seeking the assistance of a Trustee, it becomes crucial to take into account the related expenses. The charges imposed by a Trustee vary based on the chosen insolvency procedure and are contingent upon the complexity of one’s financial predicament and the extent of services provided.

However, it is of utmost importance to acknowledge that these expenses are subjected to regulation by the Office of the Superintendent of Bankruptcy Canada and necessitate court approval in instances of bankruptcies and consumer proposals. Throughout the primary consultation, the Trustee will furnish an open and all-encompassing breakdown of all charges, guaranteeing absolute transparency and lucidity during the course of action.

Is this consultation confidential? Yes, it is a confidential consultation. However, keep in mind that we are not lawyers.

Trustee conclusion

To wrap things up, it’s of utmost importance to have thorough preparation in place to ensure a highly productive initial consultation with a Trustee. I’ve delved into various pivotal measures you can adopt to optimize the utilization of your time during the consultation and obtain relevant guidance pertaining to your debt-related predicaments.

Bear in mind, forthrightness and transparency regarding your financial circumstances are vital, enabling the Trustee to furnish tailor-made solutions that align with your unique requirements, whether it is a personal or corporate matter. Lastly, seize the opportunity presented by this cost-free consultation to pose any inquiries or voice any apprehensions that may be lingering within. The Trustee is dedicated to aiding you in navigating through your financial hardships and ultimately steering you toward a triumphant financial destiny.

I hope you enjoyed this Trustee Brandon’s Blog. Managing your personal or business financial affairs in today’s ever-challenging and changing business landscape is no small feat, but with the right plan in place, it’s possible to stay or get back on track.

Revenue and cash flow shortages are critical issues facing people, entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Are you worried about what your fiduciary obligations are and not sure if the decisions you are about to make are the correct ones to avoid personal liability? Those concerns are obviously on your mind. Coming out of the pandemic, we are also now worried about the economic effects of inflation and a potential recession.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team uses innovative and cutting-edge methodologies, to adeptly navigate you through the intricacies of your financial challenges, ensuring a resolution to your debt-related predicaments without resorting to the rigours of the bankruptcy process. We can get you debt relief now!

We have helped many entrepreneurs and their insolvent companies who thought that consulting with a Trustee and receiver meant their company would go bankrupt. On the contrary. We helped turn their companies around through financial restructuring.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

The Ira Smith Trustee & Receiver Inc. team understands that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.trustee

Categories
Brandon Blog Post

DIFFERENCE BETWEEN CONSUMER PROPOSAL AND BANKRUPTCY: THE PROVEN CANADIAN WAY TO GET DEBT FREE

difference between consumer proposal and bankruptcy
difference between consumer proposal and bankruptcy

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

If you would prefer to listen to the audio version of this Brandon Blog, please scroll to the very bottom of the page and click play on the podcast.

Difference between consumer proposal and bankruptcy: Know your options

Regular readers of my Brandon Blog know that there are a lot of steps you need to go through to financially reorganize your life. I have written before different blogs on various aspects of both consumer proposals and bankruptcy. The purpose of this Brandon blog is to discuss in one place, the difference between consumer proposal and bankruptcy.

Many people opt for one of these options because life has thrown them a curveball, they no longer have the cash flow to pay off their debts and want to start fresh. There are some great benefits to filing bankruptcy. They include eliminating creditors and debts, getting control over your personal finances, and having a stress-free life, Starting Over, Starting Now. But if you’re considering a first-time bankruptcy, or the bankruptcy option even if you are familiar with the Canadian bankruptcy process from a prior time, you should consider the pros and cons of a consumer proposal, the only government-approved debt settlement plan in Canada. It will be good for you to know the options that I explain below.

Consolidation loans vs consumer proposals

What’s the distinction between a consumer proposal and a debt consolidation loan? The consumer proposal process is an insolvency procedure that allows you to resolve all the amounts you owe to your unsecured creditors via an arrangement with your creditors. It does this without needing you to file bankruptcy. A consumer proposal can only be carried out by a licensed insolvency trustee. A consumer proposal allows you to get rid of all the amount owed by repaying only a part of your financial obligations over time.

A consolidation loan means that you still have sufficient assets and income and a good enough credit score, in order to borrow the total amount you owe. The loan must carry an interest rate lower, and hopefully much lower, than the average interest rate of your combined total debt. You use the loan proceeds to repay 100% of your debts. You now have only one loan with a monthly payment you can afford. Taking out a consolidation loan is not an insolvency process.

difference between consumer proposal and bankruptcy
difference between consumer proposal and bankruptcy

The main difference between consumer proposal and bankruptcy

The consumer proposal is a fundamental part of our personal insolvency system. It is an insolvency procedure controlled by the Bankruptcy and Insolvency Act (Canada) (BIA) that allows individuals who owe $250,000 or less (not including any financial debts secured against their principal home). It permits you to pay a portion of your financial debts with time, yet eliminate all of them if fully executed. It is an alternative to declaring bankruptcy. It is an alternative to bankruptcy.

Bankruptcy is also a fundamental part of our insolvency system under the BIA. However, rather than restructuring, in personal bankruptcy, the person surrenders all of their non-exempt assets to the licensed insolvency trustee for the benefit of the person’s creditors. Once the bankrupt person has fulfilled all of their duties, they are entitled to receive a discharge from bankruptcy, subject to the Trustee or a creditor opposing it.

Personal bankruptcy involves the liquidation of the bankrupt’s assets in return for the eventual elimination of their unsecured debts. It is not considered a restructuring like a consumer proposal is.

Difference between consumer proposal and bankruptcy: The process of filing a consumer proposal vs bankruptcy

You start by talking to a Trustee who will provide you basic guidance on both a consumer proposal and also bankruptcy. The Trustee will likewise inform you specifically just how each process functions. If at the end of that discussion you inform the licensed bankruptcy trustee that you really feel good in wanting to take the next steps with them, the Trustee will provide you with their intake form. When the form is completed, you send it to the Trustee, including supplying any kind of backup documents asked for, the Trustee can then provide you advice for your unique financial difficulties.

If you choose a consumer proposal, the licensed insolvency trustee will prepare the necessary filing documents for you to sign. This includes assisting you with preparing the best possible proposal that works for both you and your creditors. You then meet with the Trustee to sign the documents. The Trustee then files the documents electronically with the Office of the Superintendent of Bankruptcy (OSB). The OSB then issues the Certificate evidencing the filing and the formal process begins.

After seeing your completed intake sheet, the Trustee will advise on whether or not a consumer proposal would work for you, or if your best or only option is filing for bankruptcy. Similarly, in bankruptcy filings, the Trustee prepares all the required filing documents for your signature. The Trustee explains all of them to you, you sign them and the Trustee then electronically files the filing documents with the OSB. The OSB then issues its Certificate evidencing the bankruptcy and that formal process begins.

You initially meet with the licensed bankruptcy trustee, in-person, by video or phone, to share details of your personal situation, and working together, you determine whether a consumer proposal, an alternative to filing bankruptcy, or personal bankruptcy is the best option for you. With COVID-19, we have been holding all of our no-cost consultations and meetings by phone and video. We can do the sign-up process by video and email. We have found this is very convenient for our clients as they are not required to take the time to attend our office in person.

As you can see, the process of filing a consumer proposal vs bankruptcy is not that different. For filing, there is not really a difference between consumer proposal and bankruptcy.

difference between consumer proposal and bankruptcy
difference between consumer proposal and bankruptcy

Major difference between consumer proposal and bankruptcy

Is there a major difference between consumer proposals and bankruptcy? Yes. So far in this discussion, there have not really been major differences. But there really are as the consumer proposal is akin to filing for bankruptcy protection while the other is bankruptcy. Both provide legal protection from creditors. But a consumer proposal gives a person what the media calls filing for bankruptcy protection. When you file for bankruptcy, that calls for the liquidation of non-exempt assets.

Both bankruptcy and a consumer proposal can be excellent options for somebody who is experiencing a challenging financial position. A consumer proposal is an excellent choice for individuals who have the ability to make monthly payments to their creditors totalling less than the amount they owe, yet eliminating all their debts, while keeping the equity they have in assets they wish to keep. Bankruptcy is an excellent choice for those who are bewildered by their financial obligations, and who don’t have a consistent income, making it actually hard or impossible to manage making payments at any level to their creditors.

While both bankruptcy, as well as a consumer proposal, can supply a financial clean slate, there are a few vital distinctions.

In a consumer proposal, you normally get to keep all of your assets. In a bankruptcy, if you have equity in assets that you want to keep, you or someone friendly to you has to pay that equity to your Trustee for the benefit of your creditors. Otherwise, you need to surrender all non-exempt assets to the Trustee for the Trustee to sell them and then put the cash towards the claims of your creditors. The assets covered by your bankruptcy exemptions do not need to be surrendered.

In bankruptcy, you also have the issue of needing to obtain your bankruptcy discharge. If either the Trustee or one or more creditors object to your discharge, then you will not get your automatic bankruptcy discharge and you will have a discharge hearing in Court. You may also be subject to surplus income payments in a bankruptcy, which you will need to make to your Trustee (21 months for a first time bankrupt, 36 months for a second time or more bankruptcy).

The amount to offer your creditors in a consumer proposal has to be a better amount than they would receive from your bankruptcy. After doing the calculations I spoke about above, including any surplus income obligation, you will better understand what amount needs to be offered to your creditors.

Another difference between consumer proposal and bankruptcy is that there is a benefit of a consumer proposal in that you can spread the monthly payments for the amount determined over a term of up to 60 months, interest-free. In a bankruptcy, you are typically required to make any required payments over the term of your bankruptcy, which is much shorter than in a proposal. Therefore the consumer proposal allows you to term out a slightly higher settlement over a longer period of time. This makes the monthly repayment less complicated on your cash flow as well as your budget plan.

Once your consumer proposal is (deemed) accepted by the creditors and (deemed) approved by the Court, you just need to make your promised monthly payments to the Trustee. The Trustee handles making payments at regular intervals to your creditors. Once you have completed the payment promised under the consumer proposal, you receive your Certificate from the Trustee showing that you completed the consumer proposal. That is it. No discharge hearing can be opposed and no extra surplus income payments. It is already accounted for in the amount offered to your creditors in your consumer proposal.

The cost difference between consumer proposal and bankruptcy

When doing a consumer proposal, the fee of the licensed insolvency trustee is included in the payment you negotiate with your creditors. As I mentioned above, the calculation of what to offer in a consumer proposal does not include what the fee and costs are. Rather, it is compared to what the unsecured creditors can expect in bankruptcy.

However, if you were to file bankruptcy, the fee is based on the surplus income you may have to pay (based upon a criterion that includes income and family size) and also any assets that you are required to assign over to the Trustee. You might also have to make month-to-month contributions to cover the fee and costs if your income and non-exempt assets are insufficient to pay for the bankruptcy proceedings.

If there is no surplus income or assets, you, or someone on your behalf, will need to pay the bankruptcy fee which will be approximately $1,800 plus HST.

difference between consumer proposal and bankruptcy
difference between consumer proposal and bankruptcy

Difference between consumer proposal and bankruptcy: What’s worse? Credit rating impact of a bankruptcy vs consumer proposal

Both a consumer proposal and bankruptcy are insolvency proceedings under the BIA. Therefore both will negatively affect your credit rating. In a consumer proposal, your credit rating will show as an R9 on your credit report while you are making payments. Once you have completed your consumer proposal, your credit rating will be an R7 for 3 years after completion.

For a first-time bankrupt, if you were to file for bankruptcy, your credit report will show an R9 rating for 6-7 years after being discharged.

The difference between consumer proposal and bankruptcy summary

I hope that you found this difference between consumer proposal and bankruptcy Brandon Blog interesting. Problems will arise when you are cash-starved and in debt. There are several insolvency processes available to a person or company with too much debt.

If you are concerned because you or your business are dealing with substantial debt challenges, you need debt help and you assume bankruptcy is your only option, call me.

It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties with debt relief options as alternatives to bankruptcy. We can get you the relief you need and so deserve. Our professional advice will create for you a personalized debt-free plan for you or your company during our no-cost initial consultation.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people with credit cards maxed out and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do as we know the alternatives to bankruptcy. We help many people and companies stay clear of filing an assignment in bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need to become debt-free, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We hope that you and your family are safe, healthy and secure during this COVID-19 pandemic.

Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

Call a Trustee Now!