Tag: debt management plan

Categories
Brandon Blog Post

DEBTS SOLUTION: STRATEGIES TO DODGE CORRUPT DEBT RELIEF SCAMS

picture of man deep in debt going over a contract to hire a debts solution settlement company
debts solution

Debts Solution: Introduction

Facing soaring expenses in housing, groceries, and fuel, Canadians grapple with amplified financial strains. The mounting necessity for a debts solution burgeons as debt problems and insolvencies surge. Seeking expert guidance becomes pivotal, steering clear of pitfalls entwined in deceptive debt relief enticements posing as saviours.

In this Brandon’s Blog, I provide insights on mitigating exposure to these cunning ploys by discussing the common warning signs that are prevalent with a debt help scammer. Unearth methods to shield you from the clutches of debt relief scams. Acquire proficiency in detecting warning signals, discerning credible services, and fortifying yourself against deceitful machinations. Delve into tangible scenarios and preemptive strategies to navigate the labyrinthine terrain of a possible debts solution, safely and securely.

Debts Solution: Recognizing Debt Relief Scams

Navigating through debt’s labyrinth often induces immense stress and a sense of being inundated, prompting many individuals to seek solace in debt alleviation initiatives. Yet, exercising prudence and vigilance within this sphere holds paramount significance. Within this industry, deceptive stratagems loom from for-profit debt settlement companies, preying on the susceptible, and exacerbating their financial woes. Deciphering these deceitful maneuvers becomes pivotal; doing so empowers you to shield yourself and judiciously discern the avenues for debt alleviation at your disposal.

Debts Solution: Scammers often ask for upfront fees and make unrealistic promises

Identifying a potential debt relief company scam often hinges on a prominent signal: the insistence on upfront fees by the entity or individual. Authentic debt relief programs typically levy charges solely after achieving a triumphant negotiation or formulation of a repayment strategy. Conversely, imposters brazenly demand payment in advance, vanishing into thin air without rendering any tangible aid.

Moreover, these malevolent actors might peddle unattainable assurances regarding debt eradication or swift resolution of financial problems. It’s imperative to grasp that an overnight miraculous debt dissolution remains an illusory prospect. Legitimate debt mitigation ventures engage in protracted negotiations with creditors, aiming for diminished interest rates or modified payment schemes. This, however, demands time and harmonious collaboration among all involved stakeholders.

When scrutinizing a debt relief initiative, exercise caution toward those espousing immediate or fanciful outcomes. Reputable entities furnish pragmatic prognoses, collaborating with you to sculpt a sustainable blueprint for enduring financial balance and security while providing you with lasting strategies to continually improve your financial situation.

Debts Solution: Beware of anyone who advises you to stop communicating with and paying your creditors

A conspicuous red flag signalling potential deceit in a debt relief scheme emerges when the program advocates severing communication and payments with your creditors. While succumbing to the allure of dodging creditor calls and missives may seem appealing, sidestepping dialogue can exacerbate your predicament.

Genuine debt mitigation programs engage in dialogue with your creditors, endeavouring to forge fresh payment terms or negotiate reduced settlements. They champion transparent communication and harmonious collaboration among all stakeholders. Conversely, swindlers might counsel total cessation of contact with creditors, precipitating escalated interest, penalties, and even legal ramifications.

Should a debt relief program advocate complete cessation of creditor payments, it unequivocally betrays your best interests. Upholding your financial commitments to the best of your capacity remains crucial while charting a course toward resolution via a reputable, trustworthy debts solution avenue.

Debts Solution: Debt relief scams may operate via social networks, text, or email

In the digital age, debt relief frauds have actually discovered their way onto various online platforms. Debt settlement firm fraudsters might connect to you with social media sites, text, or email, encouraging quick and very easy services to your financial obligation troubles.

If you obtain unwanted messages from unidentified sources offering debt settlement solutions, use caution. Reputable debt relief programs typically do not participate in hostile or unsolicited advertising and marketing tactics. It is necessary to do your research study and thoroughly vet any type of company before giving them personal information or agreeing to work with them.

When researching debt settlement choices online, be sure to verify the firm’s credentials and try to find reviews and testimonies from other customers. In addition, inspect if the firm is associated with any reliable industry organizations or if they have any accreditations that demonstrate their competence and trustworthiness.

picture of man deep in debt going over a contract to hire a debts solution settlement company
debts solution

Debts Solution: Seeking Professional Help

Seeking adept guidance from recognized experts in managing your finances and addressing debt problems is a prudent choice. Licensed insolvency trustees emerge as specialists adept in aiding individuals and companies to restructure their way through financial quagmires. Their realm encompasses proffering no-cost initial consultations, delving into your fiscal panorama, dispensing counsel, and facilitating the exploration of diverse avenues in debt management.

The following are 3 legitimate options to consider in solving debt problems. In fact, the debts solution scammers, after sucking as much money out of you as they can, then introduce you to a licensed insolvency trustee to execute one of the below options. Why not avoid the middleman debts solution scammer? All of the “services” they provide, for which they charge you thousands of dollars, you can get from a licensed insolvency trustee during the initial no-cost consultation.

Here are 3 legitimate debt relief options for anyone looking for a debts solution:

Debts Solution: Debt Management Plan


A structured repayment scheme, a debt management plan, proves instrumental in efficaciously steering individuals through their debt labyrinth. Collaborating with a licensed insolvency trustee ensures in tailoring a blueprint attuned to your distinct fiscal landscape. Herein, regular remittances through a payment schedule are made to the trustee to find dispersion among your creditors under their auspices.

The virtues of a debt management plan abound. Primarily, it amalgamates your debts into a singular monthly payment, streamlining financial oversight. Coupled with this, it commonly encompasses a diminished interest rate, harbouring potential savings in the long haul. Furthermore, active participation in such a plan potentially serves as a conduit for the reconstruction of your credit score, contingent upon consistent and punctual payments.

 

Debts Solution: Consumer Proposal

Should your financial circumstances veer toward a more severe terrain, contemplating the avenue of a consumer proposal emerges as a viable debts solution recourse. It constitutes a binding accord, ensconced in legality, forged between you and your creditors, shepherded by a licensed insolvency trustee. It is the only approved debt settlement government program. In a consumer proposal, your trustee takes over all communication with creditors, freeing you of this burden.

Within this framework, you proffer a proposal to reimburse a segment of your unsecured debts over a stipulated timeframe, commonly spanning five years. This offer is grounded in your reasonable capacity and only requires you to pay a portion of the total indebtedness. Upon acceptance by your creditors, monthly disbursements to the trustee ensue, who, in turn, channels these funds to your creditors. After completing your total set of monthly payments, your entire debt is wiped out.

The merits of opting for a consumer proposal are many. Firstly, it furnishes immediate shielding against collection calls, wage garnishments and legal action reprisals instigated by your creditors. Simultaneously, it facilitates a reduction in your cumulative debt burden, given that the repayment amounts to less than the owed sum. Additionally, resorting to a consumer proposal carries less weight than declaring bankruptcy, exerting a comparably milder impact on your credit standing.

Debts Solution: Bankruptcy as a Last Resort

As a final debts solution recourse, bankruptcy emerges as a potential remedy for individuals ensnared in insurmountable debt with no viable alternatives. This legal recourse orchestrates a fresh start by absolving a significant portion of debts, facilitating a reboot of one’s financial trajectory and life.

However, navigating the terrain of bankruptcy demands judicious consideration, given its weighty repercussions. The enduring impact on your creditworthiness, spanning multiple years, can pose hurdles in securing future credit. Furthermore, the liquidation of certain assets to reimburse creditors and potential constraints on professional accreditation warrant conscientious contemplation in discussion with a licensed insolvency trustee.

Prudent counsel from a licensed insolvency trustee assumes paramount significance before delving into bankruptcy. Our expertise enables a comprehensive no-cost evaluation of your circumstances, guiding you toward the most fitting pathway forward.

Credit counseling is an important aspect of any service provided by a licensed insolvency trustee.

Debts Solution: Protecting Yourself from Fake Loan Scams


Many times debts solution scammers combine a mandatory loan program with their debt relief package. Here are some tips on how to avoid being a victim of these loan program scams.

Be cautious of deals that require payment upfront or appear too good to be real

A substantial indicator of a spurious finance scam materializes when the lender needs payment before finalizing the loan. That is what a bogus debt relief company does or arranges for you. Reputable companies who lend money typically deduct any type of fees or expenditures from the loan itself, avoiding any kind of in-advance payment. Furthermore, lenders that appear excessively beneficial are commonly deceptive. Fraudsters often attract people with implausibly low-interest rates or guarantees of assured loan authorizations, departing from the reasonable standards of the lending world.

Phony lending rip-offs assure loans even with a negative credit history yet never provide the loan

If you have a negative credit rating, scammers may attempt to take advantage of your scenario by encouraging loans without credit history checks or with assured authorizations. Nonetheless, genuine lending institutions always analyze the creditworthiness of a borrower before approving a loan. If a lender is not interested in your credit rating and claims to supply financing to any individual despite their credit rating, it is likely a fake funding fraud. Remember, no lender can ensure funding without appropriate analysis.

Stay clear of offering individual or financial details to unidentified sources

Protecting your personal and financial info is vital in the electronic age. Fraudsters may pose as loan providers and demand sensitive info, such as your social insurance number, bank account details, or driver’s certificate information. Never offer such information to unknown sources or through unknown sites or channels. Genuine lenders will have protected systems in position to secure your data, and they will not ask for unnecessary individual or financial information.

picture of man deep in debt going over a contract to hire a debts solution settlement company
debts solution

Debts Solution: Conclusion

Getting specialist support from a licensed insolvency trustee is essential in working through the details of your financial debt and money obstacles. Licensed insolvency trustees stand as important wellsprings, supplying invaluable advice, support, and strength for you to navigate the puzzle of economic problems. Whether designing a debt management plan approach or considering a consumer proposal, embarking on these paths alongside a seasoned specialist will let you recover your authority over your entire life. It minimizes the difficult anxiety you have carried and moulds a course towards a much more positive financial destiny.

I hope you enjoyed this debts solution Brandon’s Blog. If you’re struggling with managing your overwhelming debt, don’t worry – there are some things you can do to take control of the situation. 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.

First, it’s important to create a realistic budget and track your expenses. From there, you can prioritize your debt repayment and make consistent payments to chip away at what you owe. It’s also a good idea to seek professional financial advice to help guide you through the process. Just remember, managing debt is a gradual process that requires commitment and determination, but you can do it! So don’t hesitate to reach out for help from financial professionals.

Individuals and business owners 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 who has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

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.

picture of man deep in debt going over a contract to hire a debts solution settlement company
debts solution
Categories
Brandon Blog Post

CONSUMER DEBT PROPOSALS: UNLEASH THE MANY PROFOUND BENEFITS OF ELIMINATING DEBT

consumer debt proposals
consumer debt proposals

consumer debt proposals

Consumer debt proposals eliminate your debt stress

Are you stressed out and overwhelmed by debt and don’t know how to begin to eliminate it? We know your pain and can help you because this Brandon’s Blog “Consumer Debt Proposals: The Ultimate Solution for Managing Debt” has got you covered! I provide realistic advice on how to manage and even get rid of debt through a binding debt settlement agreement.

I describe what consumer debt proposals are all about and also look at other debt-relief options like debt consolidation and credit counselling. I will also talk about the recent Canadian government’s warning about taking on high-interest debt from certain companies.

Consumer debt proposals: How Does a Consumer Proposal Work?

If you’re in a tough spot financially, in Canada you can submit a consumer proposal if you owe $250,000 or less (not including any debt registered against your home is one of the types of secured debts that must be paid according to your secured loan repayment terms). It’s an official way to get some debt relief, and it’s all legit according to the Bankruptcy and Insolvency Act. Basically, you work with a Licensed Insolvency Trustee who helps you come up with a plan for paying off what you owe. Then you negotiate with your creditors and hopefully, they accept the proposal.

Making a consumer proposal that unsecured creditors will accept is one of the debt solution alternatives to bankruptcy that requires a few steps to get it done:

  • Reach out to a qualified Licensed Insolvency Trustee and book a no-cost debt assessment consultation.
  • During the appointment, answer any questions the Trustee may have truthfully and to the best of your ability.
  • The Trustee will work with you to come up with a payment plan that fits into your budget and allows you to pay off your debt.

Once you’ve submitted your consumer proposal, your creditors will look it over and then decide if they want to accept it as is or negotiate an adjustment (higher) to your periodic payments to eliminate the amount you owe. They have the option to do either one.

Your creditors can decide to:

  1. Agree to the terms you have proposed (cast their vote in favour).
  2. Decline the terms (vote no).
  3. Decline the terms and suggest a meeting with creditors.
  4. Take no action (which is the same as voting yes).

Your consumer proposal is automatically approved unless more than 25% of the dollar value of the claims of your creditors indicates that they would like to have a meeting of creditors. In that case, that is what will happen.

Once you’ve taken the step of filing for a consumer proposal, you’ll be able to rest easy knowing that you have immediate legal protection from creditors and debt collectors through this financial and legal process. This is called a stay of proceedings where your creditors cannot chase you for the money you owe.

Filing under the bankruptcy process in Canada isn’t your only option! You can work out a legally binding agreement with your creditors through the popular alternative and powerful alternative of consumer debt proposals. With a consumer proposal, you and your creditors can come to an agreement on what portion of the debt you can pay off- and the rest will be written off!

consumer debt proposals
consumer debt proposals

Consumer debt proposals: The voting process

When it comes to a consumer proposal, it’s important to understand the process of how creditors come to a decision to accept or reject the plan. This section will provide insight into how the voting process works.

Once a consumer proposal is submitted, creditors are allowed 45 days to express their decision. They can either accept the proposal or reject it in one of the following ways: replying to the Licensed Insolvency Trustee with their acceptance, not responding at all (which is seen as approval), communicating their rejection or requesting a meeting of creditors.

At the creditors’ meeting, creditors will have the opportunity to decide whether to accept the consumer proposal as is or to make adjustments to it.

Consumer debt proposals: What happens if your offer is approved?

If your proposal gets the green light, you’ll need to abide by what you promised – whether that’s a single payment or regular installments to the Licensed Insolvency Trustee. Plus, you must meet any other conditions that were laid out in the proposal.

In a successful proposal, you can keep your assets (as long as you keep paying what you owe to creditors who have a lien on your assets), and go to the two financial counselling sessions held by the Licensed Bankruptcy Trustee. Of course, you’ve got to pay the Licensed Bankruptcy Trustee on time over the entire period of time your proposal is for.

Failure to do so could result in the revocation of the proposal, the accrual of interest and fees, and even legal action. It’s important to remember that while a consumer proposal can provide much-needed relief, it’s ultimately up to you to stay current with the payments you promised to make.

consumer debt proposals
consumer debt proposals

Consumer debt proposals: What happens should your consumer proposal be declined?

If 50% or more of the creditors vote to reject the consumer proposal, then the Licensed Insolvency Trustee must issue a notice and the consumer proposal dies. In this situation, creditors are free again to pursue collection actions against the debtor.

If 25% or more of the creditors request a meeting, that meeting is referred to as the Meeting of Creditors. At this meeting, an agreement will try to be reached by a majority of the creditors. If the agreement can not be reached, the debtor may need to amend the proposal and resubmit it or look for other ways to solve their financial issues.

If a consumer proposal is declined, it means that the creditors do not agree with the terms of the proposal put forth by the debtor. The main reasons for rejection may be that the debtor is not offering enough money or has proposed an unsuitable repayment schedule.

It is important to note that if you fail to fulfill the requirements of your consumer proposal, it will be deemed null and void. However, it does not free you from your existing debt, and the failure to adequately repay your loans or pay off debts within the terms of the agreement could affect your credit score. Collectors for debts are within their right to renew collection calls and seek legal action for retrieving the debts that they owe. They can sue you and if they get a judgment, they can then get a wage garnishment against you. It is never recommended to default on a consumer proposal.

Consumer debt proposals: If you fulfill the requirements of your consumer proposal

If you fulfill the requirements of your consumer proposal, you will have successfully completed the agreement between yourself and your creditors. This means that you will have made the agreed-upon payments and met all other terms of the proposal. The balance of your unsecured debts that you did not pay off is also eliminated if you fulfill the requirements of your consumer proposal.

One of the benefits of fulfilling a consumer proposal is that you will have lower regular payments monthly, which are based on what you can afford, rather than high monthly payments regardless of your income. Additionally, you will have protection from creditors, as they will not be able to contact you or take money directly from your wages.

After fulfilling a consumer proposal, it will come off your credit report maintained by the Canadian credit bureaus three years after the completion. This report will show that the consumer proposal has been successfully completed and you can rebuild your credit rating and credit score simultaneously.

You will also receive from the Licensed Insolvency Trustee (LIT) acting as the Administrator in your consumer proposal a “Notice of Successful Completion of Consumer Proposal”. This is a very important document, as you will be able to provide it to current or future credit grantors to prove that you successfully completed your consumer proposal and avoided personal bankruptcy.

It is important to note that if you fail to fulfill the requirements of your consumer proposal, it will be deemed null and void. However, it does not free you from your existing debt, and the failure to adequately repay your personal loans, lines of credit or pay off debts within the terms of the agreement could negatively affect your credit score. Creditors are within their right to use collection activity and use legal action for retrieving the debts that you owe. It is never recommended to default on a consumer proposal.

consumer debt proposals
consumer debt proposals

Advice for Consumers: Considerations for Debt Relief and Credit Repair Services

Improving your credit score or credit rating will take time, and requires showing creditors that your habits have improved and that you are paying back your debt on time. Be cautious when seeking help to pay off debt or repair your credit, as some companies may offer misleading solutions. I have been warning about the dangers of such “for-profit” debt settlement companies for years now.

One option for getting help with debt is a debt management plan, which is an informal proposal made by a non-profit community credit counselling agency credit counsellor to your creditors on your behalf. This plan consolidates your debts into one affordable monthly payment and in some cases, you may not have to continue to pay interest on your debt.

However, consumers should be aware that the “for-profit” debt settlement companies may charge high fees, including upfront or advance fees, and may not be able to get creditors to reduce your debt. Additionally, it is important to note that even while using a debt management plan, you are still required to keep making payments on any other debts you owe, which may result in no change to your credit score.

Overall, it is important to be cautious when seeking help to pay off debt or repair your credit and to thoroughly research any company or solution before proceeding. It is also important to consider the potential consequences, fees and overall effectiveness of the solution. A LIT during an initial no-cost consultation will provide many of the services that a “for-profit” debt management company charges for.

Consumer debt proposals: Organizations or firms cannot guarantee the resolution of your financial obligations

Be aware of companies or agencies that claim they can quickly resolve your debt problems by negotiating a deal with the companies you owe money to and letting you only pay back a fraction of your debt. These promises may not be reliable, so it’s best to be wary.

It’s important to remember that if certain creditors don’t agree to your payment plan, you may need to work out a different agreement with them directly. Alternatively, you can consult a LIT about doing a consumer proposal.

It’s also worth keeping in mind that anyone can call themselves a debt consultant, but that doesn’t mean they have the proper training or they’ll be able to help you with your finances.

consumer debt proposals
consumer debt proposals

Consumer debt proposals: No company or agency can give you a fast and easy boost to your credit rating

No Canadian debt consultant, company, or agency can promise a fast solution to your credit score. Improving your credit rating takes time and commitment; you have to show a history of paying your debts punctually.

If you’re looking to boost your credit score, one option to consider is a non-profit credit counselling agency. A credit counsellor can offer a variety of services like one-on-one advice, group sessions, and tips on how to better manage your debt. Just keep in mind that simply talking to a credit counsellor won’t do the trick.

If you’re looking to give your credit score a boost, try paying off some of what you owe. Bringing down your debt-to-credit ratio to under 75% of your credit limit will help. You could also ask your credit card companies or financial institution lenders to raise your credit limit and perhaps even amend your terms of repayment (though the latter will be very difficult) – that’ll help increase your credit score. Ideally, try to use less than a third of your available credit and keep it low, ideally below 30%.

Remember, there’s no shortcut when it comes to improving your credit score. Anyone promising you the fast and easy way is not looking out for your best interests. It takes determination and effort to get your credit back on track. Do your research and make sure you understand any associated fees or consequences before you commit.

Consumer debt proposals: Paying off a consumer proposal early

Sure, you can settle your consumer proposal early, but that might not be the best choice for everyone.

If you’ve got the funds, paying off your consumer proposal earlier could help kickstart your credit repair – but don’t expect it to save you money or guarantee a good credit rating. So think carefully before you commit to paying it off early. In the following section, I describe a very troublesome issue which has now attracted the attention of the Office of the Superintendent of Bankruptcy Canada (OSB).

Paying off your consumer proposal early will do wonders for your mental health – and it’s perfectly acceptable! It’s no secret that financial hardship is incredibly stressful, and five years seems like a lifetime. So treating yourself to an early payoff will help you feel a huge weight being lifted off your shoulders.

If you want to shorten how long your consumer proposal lasts, you can change how often you make your proposal payments. Usually, they’re monthly, but if you switch to making extra payments by paying bi-weekly, you can pay off your proposal faster. Once you’re done paying off your consumer proposal, the unsecured debts you’ve been worrying about will be marked as taken care of on your credit report.

consumer debt proposals
consumer debt proposals

Consumer debt proposals: LITs cannot talk you into getting a loan with a high-interest rate to pay off your consumer proposal early

On January 11, 2023, the OSB issued its position paper titled “LITs Promoting and Facilitating Loans to Debtors“. The problem is that some lenders are offering high-interest loans to people who are about to or are going through a consumer proposal. It looks like they’re giving loans to help people pay off their consumer proposals early, but it’s really just taking advantage of people’s tough financial situations.

The OSB has noticed that some LITs are promoting and encouraging people to take out loans without mentioning the potential drawbacks. They do this by talking up the positives and downplaying the negatives, and they may even pressure people into taking out a loan.

The OSB has come to the conclusion that it’s not in line with the Code of Ethics for Trustees or a LIT’s duties under the Bankruptcy and Insolvency Act and General Rules for LITs to promote or facilitate such loans. Furthermore, such actions are not allowed.

There is also evidence that LITs who receive engagements directly from “for-profit” debt consultants, may be entering into inappropriate arrangements with them. No trustees should ever accept a commission, payment, or any other type of reward from a third party for recommending work concerning a professional engagement, nor should they give out any commission, compensation, or another type of benefit to a third party for obtaining a professional engagement.

For the record, my Firm does not have any arrangements with any party regarding the referral of files and we neither accept nor pay a referral fee

Paying off your consumer proposal early isn’t really an issue. In fact, it can be great if you can afford it thanks to a financial windfall or change in circumstances. Everybody benefits in that scenario. But if you don’t have the means to pay off your consumer proposal quickly, don’t worry. Don’t take out an interest-bearing loan to pay off a consumer proposal. The consumer proposal itself should be considered an interest-free loan.

Look, if a debtor is trying to rebuild their credit with a loan after insolvency, there’s nothing wrong with that. They’re making the choice themselves, so it’s all good. In this case, LITs should explain the pros and cons of these loan products to the debtor. And, it’s important that they don’t push any company or product in particular.

The OSB believes that LITs should not be promoting or facilitating loans since it contravenes the Bankruptcy and Insolvency Act and its Rules. This practice has a negative impact on the LIT profession and the insolvency system. The OSB will be keeping an eye on this issue and taking appropriate action.

You Have Outstanding Financial Obligations — Consumer Debt Proposals

I hope you enjoyed our consumer debt proposals Brandon’s Blog.

There are many financial blogs. Ours focuses mainly on issues of importance to those individuals and businesses with financial challenges or worse, financial hardship, caused by debt problems. Income and cash flow shortages are critical issues facing Canadians, be they employees, entrepreneurs or companies and businesses with debt problems. Are you now worried about just how you or your business are going to survive? Those concerns are obviously on your mind. Coming out of the pandemic, we are now worried about its 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 makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. 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.

We understand 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.

consumer debt proposals
consumer debt proposals

 

 

 

Categories
Brandon Blog Post

CONSUMER PROPOSAL CALCULATOR: CONSUMER PROPOSAL GREAT SECRETS REVEALED!

consumer proposal calculator
consumer proposal calculator

Consumer proposal calculator: When should you think about a consumer proposal?

Debt can be a heavy burden, and it seems like there’s no end in sight. If you’re having a hard time making ends meet and debt is taking over your life, you may be asking yourself if a consumer proposal is right for you.

If you’re finding it impossible to pay off your financial debt, a consumer proposal could be a perfect choice for you. As soon as approved by your creditors and also authorized by the court, a consumer proposal is an enforceable deal between you and your creditors. You only need to pay off a part of your financial debt and in return, they write off the balance. This is an excellent method to pay off your debt as well as get your life back on course.

There are 2 main points to keep in mind when thinking of a consumer proposal. First, just an insolvency trustee (Trustee) can carry out a consumer proposal. They will first evaluate your situation and determine if this is the very best choice for you.

Secondly, you need to be able to make the promised payments to the Trustee. If you cannot, then a consumer proposal may not be right for you. There are also several non-insolvency debt relief options for people when looking at their unsecured debt and I describe them below.

Knowing how much you may need to pay in a consumer proposal in order to extinguish all of your unsecured debt is an important part of the decision-making. That is why I created this consumer proposal calculator located down below in this Brandon’s Blog.

Consumer proposal calculator: Option 1 – Pay off your debt on your own

If you have adequate savings and are in a financial situation to pay your financial obligations in a timely manner, excellent. Yet that is not every person’s circumstance. It’s not unusual for individuals to find themselves in a state where they have financial obligations coming due for payment, but, they do not have the cash. If you’re in this situation, you might be unsure about exactly how you can repay the money you owe but do not have.

There are a couple of things you ought to remember if you’re seeking to pay off the financial debt by yourself. First, you need to ensure you have a clear plan for exactly how you’re likely to pay off the money. This means establishing a budget plan and staying with it.

Second, you ought to keep communication open with the individual or company you owe the money. By doing this, they’ll understand what you’re doing to pay back the debt and can provide support if needed.

Finally, it is very important to be patient. Settling a financial debt can take time, however as long as you’re sticking to your strategy and seeing progress, you’ll ultimately get there to financial freedom.

consumer proposal calculator
consumer proposal calculator

Consumer proposal calculator: Option 2 – Debt consolidation

Combining your financial obligations, such as the total debt on all your credit cards, into one new debt consolidation loan can aid you to become debt-free faster and get your funds back on the right track. It can help you to repay your financial debts a lot faster and also right-size your finances. Before consolidating your financial debts and making debt consolidation payments, there are a couple of things you need to understand:

  1. Prior to you trying to settle your financial debts through debt consolidation, it’s important to recognize just how debt consolidation loan payments work as well as what type of impact it can have on your credit rating.
  2. See to it that you recognize what you’re getting into. Consolidating your financial debts through new loan funding to settle your existing financial obligations, ensure you recognize the terms of the new financing, including the rate of interest and how much the regular monthly payment will be.
  3. Search for the very best deal available. There are a variety of companies that provide financial debt consolidation funding. Shop around to find the best rates of interest as well as terms.
  4. Combining your debts will lead to a lower single monthly payment. Make sure it fits into your budget.
  5. Making your new loan monthly payments on time will work to improve your credit rating.

Consumer proposal calculator: Option 3 – Credit counselling

If you’re struggling with credit card debt, you’re not alone. It’s one of the most common types of debt in Canada. But there’s help available. Credit counselling can help you get your debts under control and develop a plan for you.

Credit counselling can be a very therapeutic process that assists people to address their debt obstacles as well as enhance their total financial health and wellness. Your best choice is to go for credit counselling offered by a nonprofit credit counselling agency.

Credit counselling commonly involves working with a credit counsellor to develop a spending plan, understand your economic alternatives, and produce a plan to settle your financial debts. More often than not the credit counsellor can get your creditors to agree to allow you to pay off the principal amount of your debt without adding any more interest charges.

Credit counselling can aid you to get out of debt, improve your credit score, and also teach you how to make better financial decisions in the future. If you’re seriously thinking about credit counselling as an option for you, it is very important to pick a reputable firm to deal with in order to produce a personalized plan to address your unique financial situation.

consumer proposal calculator
consumer proposal calculator

Consumer proposal calculator: Option 4 – Debt Settlement

If you’re struggling to make your financial debt settlements and are dealing with economic difficulty, financial debt settlement may be a great choice for you. This is where you work out with your creditors to resolve your debt for less than the amount of the individual debt amounts you owe.

  1. There are a couple of points to remember if you’re thinking about financial debt settlement:
    Your credit score will take a hit.
  2. Your creditors might send your debt to their lawyer to take legal action against you or they might send your debt to a collection agency to plague you with collection calls as soon as you divulge that you cannot settle them in full.

If you’re looking at this kind of financial debt negotiation, it is very important to evaluate the pros and cons and speak with a professional advisor to see if it’s the right option for you.

WARNING:

A for-profit debt settlement company charges fees, just like any other business. Before any of your money is used to settle your personal debts, you must pay their fees upfront. No fees are charged by the non-profit credit counsellor.

When you cannot pay anymore, the for-profit debt settlement company walks you over to their friendly Trustee for you to file either a consumer proposal or an assignment in bankruptcy.

Please stay away from for-profit debt settlement companies. I do not recommend for-profit debt settlement arrangements or debt settlement programs. These types of debt counsellors are not the debt-help professionals you should go to see.

Consumer proposal calculator: Option 5 – About consumer proposals

If you’re battling with a mountain of debt, do not worry, there is help and it avoids bankruptcy. A consumer proposal is a legal process that is the only federally-approved debt settlement process. A consumer proposal can only be carried out by a Trustee.

If you’re thinking about a consumer proposal, it is very important to understand just how the process works and also what it will indicate for your financial future. I have actually written several of Brandon’s Blogs giving a comprehensive on what consumer proposals are and how they work.

If you’re insolvent and owe $250,000 or less to your creditors (excluding any secured creditor debt like mortgages or lines of credit that are secured by registration against your personal residence), you can qualify for this government-sanctioned debt settlement plan.

This could be a good option for people who are employed and can budget their money to make the required monthly payments under this plan to the Trustee. It helps to avoid personal bankruptcy, and not have to deal with collection calls from agencies anymore. This is the best alternative to bankruptcy.

For more information, check out either one of the following Brandon’s Blogs:

consumer proposal calculator
consumer proposal calculator

Consumer Proposal Calculator: What will my monthly payments be in a consumer proposal?

Here is how a debt calculator calculates your total debt and estimates what your monthly payments will be in a consumer proposal debt management plan. Below you will be asked for all your unsecured debts, including any government debt or income tax debts.

Consumer proposal calculator$
What is the total of your credit card debt?
What is your income tax debt?
What is the total of any online loan?
How much is your other government debt?
Total of other unsecured debt?
What is your payday loan debt?
Total unsecured personal loan debt?
Your total unsecured debt
# of months you wish to take to pay (max 60 months)60
Monthly payment = (Your total unsecured debt
divided by # of months) X20%

Use this consumer proposal calculator method to compare what a monthly payment would be for you under a consumer proposal as compared to what your monthly debt payments are now. Keep in mind that in a consumer proposal, you are getting rid of all your debt if successfully completed. Right now, you may only be paying the interest charges and not making any dent in the principal reduction.

To figure out your exact monthly payment, give us a call.

Consumer Proposal Calculator: We can help you with a consumer proposal

I hope you enjoyed this consumer proposal calculator on Brandon’s Blog.

Income and cash flow shortages are critical issues facing Canadians, be they employees, entrepreneurs or companies and businesses. Are you now worried about just how you or your business are going to survive? Those concerns are obviously on your mind. Coming out of the pandemic, we are now worried about its 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 makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. 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.

We understand 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.

consumer proposal calculator
consumer proposal calculator
Categories
Brandon Blog Post

PROS AND CONS OF BANKRUPTCIES CANADA: A HEALTHY FRESH START OR THE LAST RESORT?

pros and cons of bankruptcies canada
pros and cons of bankruptcies canada

Evaluating the pros and cons of bankruptcies Canada: Introduction

When you are in debt, it can feel like you are stuck in quicksand – the more you struggle, the deeper you sink. If you are considering bankruptcy, you are not alone. According to the Office of the Superintendent of Bankruptcy (OSB), almost 100,000 Canadians filed either a consumer proposal or for bankruptcy in 2021. The numbers for 2022 are rising above the 2021 level.

Before you make a decision, it is crucial to weigh the pros and cons of filing for bankruptcy in Canada. On the positive side, bankruptcy can give you a fresh start. It can discharge your debts and give you a chance to rebuild your finances. On the negative side, bankruptcy can damage your credit score more than one of the bankruptcy alternatives.

If you are struggling with debt, there are other options to consider before bankruptcy. You may be able to negotiate with your creditors and set up a payment plan. You can also improve your financial situation by cutting expenses and increasing your income. If you decide that you do need an insolvency process, a consumer proposal or a Division I Proposal may be better for you.

In this Brandon’s Blog post, I wish to aid you in gaining a better understanding of the pros and cons of bankruptcies Canada. Then you can make a much more educated choice about your financial debt issues.

What are the pros and cons of bankruptcies Canada?

When it comes to making the decision to file for bankruptcy, it is important to understand all of the implications that this will have on your life. In Canada, bankruptcy is a legal process that allows individuals to discharge all of their debts if they are unable to repay them. This process is overseen by the OSB, and there are certain requirements that must be met in order to be eligible for bankruptcy.

While bankruptcy can provide relief from debt, it is not without its drawbacks. Once you have been declared bankrupt, your credit rating will be significantly damaged, which can make it difficult to obtain new lines of credit in the future. Additionally, your assets may be seized in order to repay your creditors.

Before making the decision to file for bankruptcy, it is important to weigh the pros and cons carefully. Speak with a financial professional to get advice that is specific to your situation. Now for a more detailed discussion on the pros and cons of bankruptcies Canada.

pros and cons of bankruptcies canada
pros and cons of bankruptcies canada

The pros of bankruptcies Canada

A fresh start

If you’re sick of being in debt, bankruptcy might be a good option for you. It can be a fresh start, and it’ll get creditors off your back. You can move on with your life without all that stress.

Rebuild your credit

As stated above, bankruptcy will cause some damage to your credit. However, it can stop the continuous damage you may be facing now. You can begin rebuilding your credit rating, rather than having to face extra charges from missed payments as well as receiving those pesky telephone calls from bill collectors.

Get rid of most if not all of your debts

In most cases, all of your obligations will be cleared by your bankruptcy discharge. Normally cleared debts are your unsecured debts like credit card debt, lines of credit, personal loans, payday loans, and income tax debts. A bankruptcy filing will let you not worry about a ton of bills but will force you to focus on balancing your budget.

There are some obligations that bankruptcy cannot clear, like child or spousal support payments, or payments for fines or penalties awarded by a court. You can get your student loans discharged too as long as you’ve been out of school for 7 years or even more.

Stop debt collectors cold

Creditors and their debt collectors making their collection calls can be pretty aggressive when they’re trying to get paid. Bill collectors demand and try to scare you as to what will happen if you do not pay up. Answering your phone or checking your VM becomes terrifying. You might also have a ton of mail from them stacking up in your mailbox, inbox, and so on.

If you’re losing the battle of staying up to date with your bill payments, personal bankruptcy might be a good option for you. Declaring bankruptcy stops all collection efforts, including calls as well as letters from your creditors. This is called the “automatic stay of proceedings”. When you’ve filed an assignment in bankruptcy, the automatic stay goes on and offers you some breathing space.

Get rid of any wage garnishment

If you file for bankruptcy, you don’t need to worry about wage garnishment or legal action anymore. The stay of proceedings also prevents any further attempts at collection, including wage garnishment. Creditors and collectors also won’t be able to take you to court.

Bankruptcy is not forever

So, if you’re thinking about filing for the bankruptcy process, know that it usually takes about nine months to go through the process for a first-time bankrupt who does not have any surplus income payments to make to your Trustee. And, if the Licensed Insolvency Trustee handling your case finds that you have surplus income, you won’t be able to get a discharge for 21 months.

If this is your second bankruptcy, it will take longer. If you don’t have surplus income payments to make, it will take 24 months. If you do need to make surplus income payments, it will take 36 months.

These are the pros when considering the pros and cons of bankruptcies Canada. Now for the cons!

pros and cons of bankruptcies canada
pros and cons of bankruptcies canada

The cons of bankruptcy

There are many cons of filing bankruptcy, including:

Your credit rating

If you file for bankruptcy, it’ll rank you as an R9 on your credit report, which is pretty bad news for your credit score. The damages to your credit rating will not last forever. Your very first personal bankruptcy will be noted on your credit record for 6 years after the day of your bankruptcy discharge. A second bankruptcy will certainly harm your credit score for a lot longer.

At the outset of your bankruptcy journey, you cannot see the light at the end of the tunnel. At least you now have a roadmap to restoring your credit and have a date when your credit will be cleared of any damage. You can start to rebuild your credit even before you are discharged from bankruptcy.

Your assets may be liquidated

This doesn’t mean that you’ll lose everything. Your personal belongings – like clothes, household items, work tools, and even a car under a certain value – usually can’t be taken away from you in bankruptcy. This means that the proceeds from the sale of your other non-exempt assets will be used to repay your creditors.

RRSP contributions in the past 12 months are not exempt

Your retirement savings are protected, but any contributions you made in the past 12 months to your RRSP are not exempt.

Surplus income and the cost of bankruptcy

If you’re making more money than the surplus income threshold, you’ll also have to make surplus income payments to your Licensed Insolvency Trustee. If you don’t have any assets and don’t have to pay the surplus income requirement, you or a relative will have to pay your Trustee’s fee.

Complete financial disclosure

You will need to make full financial disclosure to your Trustee. Your Licensed Insolvency Trustee will use that information to help you complete a Statement of Affairs. This disclosure details your financial position and will even potentially highlight certain financial transactions. Essentially your Trustee and the court will know everything about your finances and your creditors will get a peek too.

When you’re going through bankruptcy, you’ll need to hand over your tax docs and pay stubs to show how much you’re earning. This is how the Trustee decides if you’ve gone over the surplus income threshold.

A lasting record

Once you file for bankruptcy, the paperwork will become part of the public record in Canada. To start your bankruptcy, your Licensed Insolvency Trustee files your bankruptcy documents with the OSB. It then becomes part of the public record.

Most people who file for bankruptcy will only have their Trustee, the OSB, the court, their creditors and the two Canadian credit bureaus know about it.

pros and cons of bankruptcies canada
pros and cons of bankruptcies canada

Bankruptcy alternatives from pros and cons of bankruptcies Canada

Now that you understand the pros and cons of Canadian bankruptcies, you must just consider this option as a last choice. If you can solve your financial problems without experiencing the unfavourable elements of personal bankruptcy, that is the most effective way to go.

During your initial no-cost consultation, the Licensed Insolvency Trustee will help you should explore all the bankruptcy alternatives. I have written before in more detail about each of the bankruptcy alternatives listed below. I have included a link to each of those more detailed blogs. The main alternatives to bankruptcy are:

Debt consolidation

If you’re aiming to leave financial debt behind, debt consolidation could be a good alternative for you. By rolling all your financial obligations into one financing with a lower rate of interest, you will save money from the lower rate of interest on the new consolidation loan and leave your debt behind much faster.

Just make sure that you understand the current interest rates you are being charged, the total of your monthly payments that you currently may or may not be able to afford, the interest rate being offered to you on a debt consolidation loan, what your new monthly payment will be and make sure that you have a realistic budget of your monthly income and monthly expenses that shows that you can afford the new payments on a monthly basis.

Credit counselling

Credit counselling is a process whereby a person in debt meets with a credit counsellor to discuss their options for dealing with their debt. The credit counsellor will assess the person’s financial situation and provide advice on how to best deal with the debt. This may include negotiating with creditors to reduce interest rates or monthly payments and setting up a debt management plan.

As I have written many times before, you should only go to a community-based non-profit credit counselling agency that does not charge any fees. If the credit counsellor you choose wants to charge you fees, get out of there. It is not the best choice for you.

Debt settlement

Debt settlement is a process in which you can negotiate with your creditors to pay less than the full amount you owe. This can be a good option if you are not able to pay your debts in full and you are willing to negotiate with your creditors.

Debt settlement works well if you only have 1 or a few creditors. If you have many creditors, debt settlement is much more difficult in making sure that everyone remains on board with the negotiated settlement and that you will have enough money to pay the lower settled amounts you promised.

Many times with a multitude of creditors, either a consumer proposal or a Division I Proposal is the most effective way to bind everyone in a debt settlement process.

Like in credit counselling, I urge you to stay away from debt settlement companies that charge fees. What they do is charge you unnecessary fees, try to sell you products you don’t need and then when they cannot sell you any more products and their debt settlement techniques do not work, they then walk you to their favourite Licensed Insolvency Trustee for an insolvency process, which might just be a bankruptcy.

I would rather see you use your accountant or lawyer if you do not feel comfortable negotiating yourself. Those professionals will have your best interests at heart in return for their fee. They also won’t try to sell you more products.

Consumer proposals

When it comes to debt of $250,000 or less (other than for secured debts registered against your home), there are a number of options available to help you get back on track. One option is a consumer proposal.

A consumer proposal is a formal debt relief and debt-settlement option available in Canada. It is a legally binding agreement between you and your creditors. Under a consumer proposal, you agree to repay a portion of your debts, and your creditors agree to forgive the rest.

A consumer proposal can be an attractive option for many reasons. First, it can help you get out of debt without having to declare bankruptcy. Second, it can help you keep your assets, such as your home or car. Third, it can give you a fresh start by wiping away most, if not all, of your unsecured debts.

If you’re considering a consumer proposal, it is necessary to obtain assistance from a qualified expert. A Licensed Insolvency Trustee, who is also a consumer proposal administrator in Canada, can walk you through the process and answer your questions. This will allow you to see if it’s the right choice for you.

Division I Proposal

If you owe more than $250,000, a Division I Proposal is a great option to settle your debts. It’s not as streamlined as a consumer proposal, but it’s still a great way to get out of debt.

Other than these technical differences, it has the same aim as a consumer proposal: to provide a debt settlement option that will bind all unsecured creditors and get the person back onto their feet free of the stress and burden of their unmanageable debts.

Either a consumer proposal or a Division I Proposal are excellent debt relief options approved by the Canadian government. One of the other benefits of either of these two debt settlement options is that the person will also receive two mandatory financial counselling sessions. Getting this education will help put the person on the right track for the rest of their life.

Understanding the advantages of bankruptcy and also the disadvantages of bankruptcy for companies

When a company faces overwhelming debt, bankruptcy may seem like the only way out. However, there is only one advantage and one disadvantage to bankruptcy for a company.

One advantage of this situation is that the Trustee may be able to sell the assets to a purchaser who will then be able to use those assets to continue the former business of the company in a profitable way. This could potentially save some jobs, at least for the key employees of the old business.

The one disadvantage is that unlike a person, when a company goes bankrupt, the corporate legal entity is now dead.

Before the Directors of a company decide to bankrupt the company, they should determine if certain divisions or parts of the business can be saved and operate profitably if the unprofitable part(s) could be eliminated. If so, a financial restructuring can be done to turn this unprofitable company into a viable and profitable one and save some jobs in the process.

pros and cons of bankruptcies canada
pros and cons of bankruptcies canada

Pros and cons of bankruptcies Canada: Summary

I hope you enjoyed this Brandon’s Blog on the pros and cons of bankruptcies Canada.

People are falling behind with stagnant wages or tiny wage increases while there is runaway inflation and they are falling deeper and deeper into debt. Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses. Are you now worried about just how you or your business are going to survive? Those concerns are obviously on your mind. Coming out of the pandemic, we are now worried about its 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 makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now, while explaining the pros and cons of bankruptcies Canada or any other of our recommendations.

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. There are many pros and cons of bankruptcies Canada. Whatever process we recommend for you will, we will do so in order to minimize any cons you may experience.

We understand 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 financial life, Starting Over, Starting Now.

 

 

pros and cons of bankruptcies canada
pros and cons of bankruptcies Canada pros and cons of bankruptcies canada
Categories
Brandon Blog Post

WHAT DOES A LICENSED INSOLVENCY TRUSTEE DO TO HELP IN YOUR MANAGING DEBT FOR A PROFOUND QUALITY OF LIFE?

what does a licensed insolvency trustee do

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

What does a licensed insolvency trustee do?: What is a licensed insolvency trustee?

Frequently I am asked what does a licensed insolvency trustee do? How is it different from a bankruptcy trustee? The answer is it isn’t different. The term bankruptcy trustee is dated.

The new title is Licensed Insolvency Trustee. The Office of the Superintendent of Bankruptcy (OSB) changed it in 2015. Among the reasons for the name change were the submissions made by the Canadian Association of Insolvency and Restructuring Professionals. As the name suggests, a licensed insolvency trustee can offer a wider array of financial solutions.

This Brandon’s Blog is intended to describe what does a licensed insolvency trustee do and to provide useful information for you to help you better understand the debt relief advice that a Trustee provides to people, entrepreneurs, and their companies experiencing financial trouble.

What does a licensed insolvency trustee do?: Licensed insolvency trustees are professionals who are federally regulated

There are many terms in the insolvency field that the average person isn’t familiar with, which is why it’s important to understand what the licensed insolvency trustee does. Trustees are licensed and supervised by the federal government through the OSB to act as personal and corporate insolvency administrators. This means they act to protect the interests of all involved parties while assisting debtors, acting as a debt counselor, a restructuring advisor, and if required, overseeing the bankruptcy process.

Licensed insolvency trustees are professionals with a background in finance, law, accounting, and insolvency. They assist businesses and individuals who are struggling financially. Typically, licensed insolvency trustees meet with clients to discuss their financial situation and offer advice and recommendations to help get the client out of a financial bind.

what does a licensed insolvency trustee do
what does a licensed insolvency trustee do

What does a licensed insolvency trustee do?: The credit counselor or a debt management program as an alternative

Financial guidance is offered by licensed insolvency trustees, credit counselors, and debt management programs. These services differ greatly from each other.

A licensed insolvency trustee can simply offer you financial advice and help you plan on how to repay your debts if that is all you need. A trustee is also the only person who can file a bankruptcy or consumer proposal for you. A Trustee will provide you with an initial no-cost confidential consultation to see if there are alternatives to bankruptcy for you. Credit counselors, credit counselling companies, and debt management businesses can give you financial advice and information. They can help you make a budget and make plans to repay your debt.

What does a licensed insolvency trustee do when you have debt but do not need to resort to one of the insolvency processes? During the free initial consultation, if a consumer proposal or bankruptcy is not right for you, the Trustee will refer you to see a community organization-based credit counselor who will be able to help you and also will not charge you a fee.

What does a licensed insolvency trustee do?: The Consumer Proposal Process

Consumer proposals to creditors are made by debtors and are legally binding agreements. You group all your debts into a consumer proposal to creditors. This is a debt solution to avoid bankruptcy. Your creditors agree to accept a reduced amount as full payment. The consumer proposal is a legal alternative to bankruptcy. Only a licensed insolvency trustee can administer it.

The only consumer insolvency restructuring proceeding regulated by the Canadian government is referred to as a consumer proposal (which is the only one of the consumer insolvency government-regulated insolvency proceedings that allow debt consolidation, debt settlement, or debt adjustment). In the end, your creditors write off the remainder of your debt, and you are released from those legal obligations.

If you owe $250,000 or less (not including any personal mortgages) and are insolvent, then you can qualify for a consumer proposal. Month-to-month payments over no more than 60 months need to be made to the Trustee. You pay just a part (generally 25%) of your total financial obligations gradually to the Trustee and when ended up, the rest of the balance owing to your unsecured creditors is written off.

what does a licensed insolvency trustee do
what does a licensed insolvency trustee do

What does a licensed insolvency trustee do?: The bankruptcy process

Canadian bankruptcy is a process whereby a person or company can declare itself bankrupt. The bankruptcy process starts in the provincial or territorial office of the OSB where the debtor is located.

In Canada, personal bankruptcy entails a number of stages. The debtor must be insolvent, meaning that they cannot repay their debts with the assets that they own or the income they earn. With the help of the Trustee, they must file statements of affairs and a statement of current income and expenses. There are other obligations on an undischarged bankrupt but that is not the purpose of this blog.

Upon receiving their discharge from bankruptcy, that is the moment that the debtor’s debts are forgiven or discharged.

What does a licensed insolvency trustee do?: The assignment of assets

When people file assignments in bankruptcy, what does a licensed insolvency trustee do with the assets? Any assets not charged by a secured creditor are available for the Trustee to take possession of. Those assets are usually things like real estate, cash, and vehicles. When assets are seized in bankruptcy the proceedings usually lead to them being sold and the proceeds are shared with creditors.

This is the main difference between a consumer proposal and bankruptcy. In a consumer proposal, there is no assignment of assets to the Trustee like in a bankruptcy. The debtor in a consumer proposal keeps their assets and makes monthly payments. It is the total of the monthly payments that the Trustee distributes to the creditors in a consumer proposal. In a bankruptcy, it is the proceeds of the asset sales.

what does a licensed insolvency trustee do
what does a licensed insolvency trustee do

What does a licensed insolvency trustee do?: Opting for a consumer proposal

Many people I deal with have significant debt problems. However, a consumer proposal may not be the best option for everyone. Opting for a consumer proposal means not only do you qualify under Canadian insolvency legislation to use one. It also means that it is a better alternative for you than personal bankruptcy. It means that you are able to restructure and not need bankruptcy services from a licensed insolvency trustee.

A consumer proposal is a way to get out of debt without declaring bankruptcy. If you are having trouble paying back credit card bills, medical bills, rent payments, and you don’t want to declare bankruptcy, a consumer proposal might be right for you.

Before opting for a consumer proposal, you must meet the following requirements:

  1. Total liabilities of $250,000 or less.
  2. Monthly payments can be made to your creditors, but not 100% of the total amount due.
  3. You cannot repay all of your debts with the money you have.
  4. If you work and are able to budget, you can pay your budgeted monthly expenses and have money left over for regular monthly payments to the Trustee. Under a debt management plan, your creditors will agree to write off a portion of your debt if you pay a fraction of what you owe.
  5. You may also be lucky enough to have a relative willing to put up a lump sum of money that represents a fraction of what you owe so that your unsecured creditors will accept it instead of all that you owe. This means that you can be in and out of your consumer proposal fairly quickly if you are in this fortunate position.

To summarize, consumer proposals are best suited to people with a sufficient disposable income. Consumer proposals offer the best way of restructuring, eliminating your unsecured debts, and avoiding bankruptcy.

There are restructuring provisions in the Bankruptcy and Insolvency Act (Canada) for people who owe more than they can discharge in a consumer proposal or in business insolvency. Despite some differences in the rules, the overall theme of restructuring remains the same.

What does a licensed insolvency trustee do?: Going the bankruptcy route

Given the above, what can a person do to eliminate their unsecured debt if they cannot qualify for filing a consumer proposal as an alternative to bankruptcy? Going the bankruptcy route will probably make the most sense.

Bankruptcy is when a person cannot pay their bills. They file Canadian personal bankruptcy to get a fresh start. Filing a consumer bankruptcy must be your last resort after exhausting all other options to avoid bankruptcy. Bankruptcy means debts are written off when the person receives their absolute discharge from bankruptcy. The bankruptcy law in Canada protects people from dishonest, unfair, or abusive practices by creditors.

However, in return for getting the relief of eliminating debts through bankruptcy, an undischarged bankrupt also has certain responsibilities.

These include:

  1. Making full disclosure to the Trustee.
  2. With the assistance of the Trustee, preparing the sworn Statement of Affairs and Statement of Income and Expenses.
  3. Delivering all assets and properties to the Trustee to be sold (other than for certain provincial exemptions).
  4. Attending the First Meeting of Creditors if one needs to be held.
  5. Attending two financial counselling sessions with the Trustee or a member of the Trustee’s staff. Attendance at credit counseling sessions is also the case in a consumer proposal.
  6. Providing monthly statements of income and expenses while an undischarged bankrupt.
  7. Generally providing any assistance requested by the Trustee.

In providing debt-relief options, the Canadian bankruptcy system is designed to provide fairness to both debtors and creditors while allowing the person to financially rehabilitate themselves.

what does a licensed insolvency trustee do
what does a licensed insolvency trustee do

What does a licensed insolvency trustee do?: Final thoughts

What does a licensed insolvency trustee do? Licensed insolvency trustees are insolvency practitioners. They are debt professionals who deal with and provide services to individuals and businesses with debt problems that are experiencing financial issues that can only be resolved through an insolvency process. Licensed insolvency trustees are professionals, offering affordable solutions to financial struggles.

I hope you found this what does a licensed insolvency trustee do Brandon’s Blog about helpful. Sometimes things are too far gone and more drastic and immediate triage action is required.

Do you have too much debt? Are you in need of financial restructuring? The financial restructuring process is complex. The Ira Smith Team understands how to do a complex restructuring. However, more importantly, we understand the needs of the entrepreneur or the person who has too much personal debt. You are worried because you are facing significant financial challenges.

It is not your fault that you are in this situation. You have been only shown the old ways that do not work anymore. The Ira Smith Team uses new modern ways to get you out of your debt troubles while avoiding bankruptcy. We can get you debt relief freedom.

The stress placed upon you is huge. We understand your pain points. We look at your entire situation and devise a strategy that is as unique as you and your problems; financial and emotional. The way we take the load off of your shoulders and devise a debt settlement plan, we know that we can help you.

We know that people facing financial problems need a realistic lifeline. There is no “one solution fits all” approach with the Ira Smith Team. That is why we can develop a restructuring process as unique as the financial problems and pain you are facing. If any of this sounds familiar to you and you are serious in finding a solution, contact the Ira Smith Trustee & Receiver Inc. team today.

Call us now for a free consultation.

We will get you or your company back on the road to healthy stress-free operations and recover from the pain points in your life, Starting Over, Starting Now.

The Ira Smith Trustee Team is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting. We hope that you and your family are safe and healthy.

what does a licensed insolvency trustee do
what does a licensed insolvency trustee do
Categories
Brandon Blog Post

DEBT MANAGEMENT IN ONTARIO PLAN: HOW TO GET A METICULOUS ONE TO WORK FOR YOU IMMEDIATELY

We hope that you and your family are safe, healthy and secure during this coronavirus 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 and click play on the podcast.

debt management in ontario
debt management in ontario

What is debt management in Ontario?

The term “debt management in Ontario” can mean a lot of things to Ontario residents. There are debt management companies that offer a range of services, from credit counselling to debt settlement. In Ontario, these organizations offer their debt management services exclusively to individuals and not to businesses. Debt management is a process that helps you manage your debt and get it under control. A debt management program can only be successful if the person also learns new behaviours in how they deal with money and debt.

WARNING: The Canadian government has put out a consumer alert. This alert, titled Consumer Alert: What you need to know when getting help to pay off debt or repair your credit, warns Canadians about unscrupulous debt settlement companies and what you need to know. In many Brandon Blogs, I have also put out that same warning. There are only two choices when seeking the right credit counsellor to review your alternatives to deal with out-of-control unsecured debt, including tax debt. Legitimate debt management services in Ontario are provided via two types of specialists: accredited community-based non-profit credit counselling agencies and federal government accredited and supervised licensed insolvency trustees.

I recognize that debt is a huge issue for many people in Ontario and all of Canada. Most individuals do not also understand the massive influence it can have on them but trust me, it is all too genuine. In this Brandon Blog post, I review the different alternatives readily available to people looking for debt management in Ontario.

What is debt management in Ontario plan?

A debt settlement plan (debt management plan or DMP) is a tool supplied by a non-profit credit counselling agency that can help you get control of your money and back on course to living the debt-free life you wish to lead. Your dedicated credit counsellor can help you identify if becoming part of a DMP is appropriate for you. If not, the non-profit credit counsellor can lay out all your available alternatives.

For hard-working people who struggle to meet their monthly bills, a debt management plan might be the answer. Under the terms of a DMP, a person consolidates all of their unsecured debt under one plan. This plan, developed by any one of the many qualified counsellors, usually involves making a single regular payment, a monthly payment, under a debt repayment program, to the credit counselling service. The non-profit accredited credit counselling agency then distributes this money to creditors.

This kind of repayment plan can take normally as long as 5 years to pay off 100% of your unsecured type of debt, but it can also be the solution that allows a person to become debt-free quickly. It’s important to note that such an informal debt management in Ontario plan may not be the best option for everyone.

What to consider before you sign up for debt management in Ontario

There is one major thing to consider before you sign up for a DMP. Before you take out a DMP, you want to make sure that you are in a position that allows you to pay off your debt without the assistance of your creditors.

In a DMP, you are promising to pay your creditors 100% of the principal you owe them when entering into the debt management plan, with no reduction from the total owing. So you need to have established a realistic budget working with your credit counsellor, for the entire DMP period showing you will be able to afford to maintain the monthly payment you are promising to make.

Will creditors continue to contact me while I’m on a Debt Management Plan?

debt management in ontario
debt management in ontario

Most people view the DMP as merely a temporary solution until you have paid off all debts. But in fact, if done properly and taken seriously, it is a legitimate solution and behavioural modification program. If you learn the budgeting skills and accept the financial advice in the program and follow them as a permanent change to your money management behaviour, it will allow you not only to focus on paying down your debt load while you are in the program but teach you the necessary skills to not get into financial crisis in the future. You will have the money to make each regular payment to pay off your normal bills and live a financially healthy life.

Once you’ve signed up for a DMP, your credit counsellor will communicate with your unsecured creditors to advise that you are under their program and that payments to creditors will be coming from the non-profit credit counselling agency. Your unsecured creditors will note that in their respective files and focus their communications to be with the debt management program credit counselling agency.

Does debt management in Ontario hurt your credit?

Most people entering a program for debt management in Ontario are on the financial edge of the ledge already. If they default on their debts, it will produce a lower credit score. While a DMP will lower your credit score at first, in the long run, if you keep up with the program and stick to your payment schedule and make your debt payment plan payments on time as agreed, your credit score will eventually improve.

Do I have to give up my credit cards in debt management in Ontario Program?

The question of whether you need to give up your credit cards in a DMP is among the most common inquiries we get asked by debtors. The answer is although there is no law that says you must surrender your bank card for financial debt management in Ontario plan, you do need to quit borrowing. This includes using your existing credit cards.

However, you can still utilize a secured credit card up to the limit you set with your financial institution that issued it. More likely though, the credit card firm will certainly remove your account once they obtain notification of your DMP.

When you’ve effectively finished your financial debt management in Ontario program, you will become eligible for a normal credit card once more.

What to do during your debt management plan

The Canadian government recommends that you:

  • ask the credit counselling agency for timely written reports on the status of your plan,
  • keep good records of all amounts you pay to the agency, and
  • get receipts of all money you pay to them as well as regular reports of amounts they pay to your unsecured creditors for you.

Carefully review your records and the regular reporting you receive from the agency. Ensure they are paying your creditors on time. This will keep you clear of any type of late fees or further adverse notations on your credit report.

debt management in ontario
debt management in ontario

What are the disadvantages of debt management in Ontario plan?

There are a few possible drawbacks to hopping on a DMP. However, in my view, they are not enough to stop you from doing one if you can afford it. The disadvantages are also common to any debt settlement in Ontario plan.

In no particular order, they are:

  • It won’t cover every one of your outstanding debts. DMPs typically won’t include your secured debts and some unsecured debts, such as student loans. This is especially true if you are still in university or college, have not finished your course of study and need to continue to apply for student loans because you wish to continue either as a full-time or part-time student.
  • Credit counsellors can guide you but will have to take your secured debt payments into account when establishing your monthly budget. You’ll typically need to manage those debts on your own. If you do not have any money left over each month after accounting for secured debt payments, rent or mortgage, food, income tax and other essential monthly purchases, then a DMP will not be possible for you.
  • There could some service charges to pay for the DMP.
  • As indicated above, no real accessibility to credit.

During the initial counselling session, the credit counsellor can help you review your realistic options. Perhaps you can still qualify for an Ontario debt consolidation loan. Keep in mind that if that is an option, you will need to be mindful of the effective interest rate you will be paying on your loan, albeit at an annual rate much less than on your existing debt.

If neither a DMP nor a debt consolidation program are viable debt consolidation options or debt settlement options for you, then you will need to explore with a licensed insolvency trustee the other debt relief options of either a consumer proposal or bankruptcy to eliminate your unsecured debt.

How long can you legally be chased for debt in Ontario?

The answer is two years. A Judge of the Ontario Superior Court of Justice In Bankruptcy and Insolvency recently released a decision. It was an appeal from the decision of a Master sitting in the same court. The case was about the issue of a claim which is statute-barred under the Ontario Limitations Act.

Section 4 of this Act says that you cannot enforce an outstanding debt for a claim the creditor has after 2 years from when the claim was discovered. This includes the day on which a creditor initially should have recognized they had a claim which called for enforcement.

This case was about a creditor filing a proof of claim in a debtor’s personal bankruptcy. The licensed insolvency trustee disallowed the claim because the claim was statute-barred. The creditor appealed the Trustee’s decision to the Master sitting in bankruptcy court. The creditor argued that although legal action cannot be taken on the debt, it does not mean that the debt still does not exist. The Master dismissed the creditor’s appeal and upheld the Trustee’s decision.

The creditor then appealed the Master’s decision to a Judge sitting in the same court. The Judge reviewed the matter and upheld the Master’s decision.

What this decision says is that not only can a debtor not be chased for a debt if no legal action was commenced within the 2 year period, they can’t even file a proof of claim in the debtor’s consumer proposal or bankruptcy!

However, keep in mind that just because it is no longer a legal debt, the creditor would have made a notation with the credit bureau for your credit report before the two-year period ended. So the damage to your credit score has already taken place.

Can a Trustee do a debt management plan?

The answer is a Licensed Insolvency Trustee can do for you the equivalent of a DMP. Consumer proposals can only be administered by a Trustee. Consumer proposals are also the only federal government-approved debt settlement plan in Canada. To be equal to the result of a DMP, you would offer to your unsecured creditors to pay them 100% of all the unsecured debt that you owe. Remember, above I stated that a DMP pays 100% of your unsecured debt.

There are many similarities between a consumer proposal and a DMP if you offer 100%. But as I indicate below, you can still have a successful consumer proposal by offering less than 100% to settle all of your unsecured debts. For details on how a consumer proposal works, check out my Brandon Blog, CONSUMER PROPOSAL FAQ: ANSWERS TO 10 TANTALIZING CONSUMER PROPOSAL QUESTIONS.

debt management in ontario
debt management in ontario

Which is better? A debt management plan In Ontario vs consumer proposal

Everyone’s financial situation is unique. A DMP will not be as harmful to your credit score as with a consumer proposal, nor will it jeopardize any of your assets as with bankruptcy. You’ll also gain money management skills that can help you in the long term and avoid debt in the future. But if you cannot get an Ontario debt consolidation service loan or a debt management plan is not appropriate for you, then there is another formal option that avoids bankruptcy.

In a consumer proposal, you will also gain money management skills. In addition to your no-cost initial consultation, there are also 2 mandatory credit counselling sessions with an accredited credit counsellor in the Trustee’s office. In a DMP, you need to pay 100% of your unsecured debt. In a consumer proposal, the amount you need to pay is calculated against what your unsecured creditors can expect to receive from your bankruptcy. In most cases, it will be much less than 100%. On average, you can expect to only repay about 25% of your total outstanding unsecured debt, including any tax debt.

A consumer proposal is for any person that owes $250,000 or less, other than for any loans secured against your principal residence. If you owe more than this limit, or your company owes too much debt, then you can still get debt relief under a different proposal section of the Bankruptcy and Insolvency Act (Canada) (BIA).

Bankruptcy is of course the very last option anyone should consider. This should be considered only if you do not have the necessary cash flow to successfully complete any debt management plan.

So what is best for you? Give me a phone call and I will let you know whether debt management in Ontario plan or a proposal under the BIA is better for you. I will tell you at no cost to you.

Debt management in Ontario summary

I hope that you found this debt management in Ontario Brandon Blog informative. Many people feel that they are trapped in a cycle of credit card debts, unsecured lines of credit, tax debt and generally an unmanageable level of debt. You may want to do something about those debts but you aren’t sure what to do.

If you have any debts they can be overwhelming because they are so much money and you don’t know how to deal with them. There are various debt management plans available that can help you reduce the amount of money you owe and help you deal with your debts.

If you are concerned because you or your business are dealing with substantial debt challenges 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 while avoiding bankruptcy. We can get you the relief you need and so deserve.

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 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. We help many people and companies stay clear of 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, Contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

We hope that you and your family are safe, healthy and secure during this coronavirus 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.

Categories
Brandon Blog Post

CONSUMER PROPOSALS: HOW MANY ARE REJECTED?

Introduction

When people with high debt come to see me for their free consultation, many times I shock them. They are shocked when I tell them that bankruptcy might not be required. I then tell them about consumer proposals. I also explain why I think they would be able to successfully complete a consumer proposal (CP) and therefore avoid bankruptcy.

What are consumer proposals?

I have written on the topic many times. In summary, a consumer proposal is a streamlined process under the Bankruptcy and Insolvency Act (Canada) (BIA). This process allows insolvent people to make a formal deal with their creditors. This government approved debt settlement plan is to repay only a portion of what you owe and you can take as long as 5 years of regular monthly payments to do so.

To qualify, the person must be insolvent and owe $250,000 or less to all creditors, other than for any debts secured by way of registration against your principal residence, such as a mortgage.

The person will then ask me how many we have done were rejected. They are trying to determine what the odds are for their deal to be accepted by their creditors. What I tell them is that I first do an assessment and tell them what amount of offer I think they need to make to gain the approval of their creditors. I also tell them that so far, anyone who has followed my advice has had their consumer proposal accepted by their creditors. Therefore, the number of those rejected by people who follow my advice is ZERO.

The benefits

There are benefits to submitting a successful debt settlement payment plan sanctioned under the BIA. The benefits include:

  • Unlike an informal debt arrangement, the CP develops a forum where each of your unsecured creditors has to participate in for your debt restructuring.
  • You maintain your assets and don’t have to give them up.
  • Lawsuits against you or your property and financial debts, or enforcement actions such as wage garnishments, cannot proceed.
  • You do not need to submit an assignment in bankruptcy

The process

Once prepared, the CP is submitted to the Office of the Superintendent of Bankruptcy Canada (OSB), the government department that controls Licensed Insolvency Trustees (formerly called bankruptcy trustees) (Trustee). The Trustee acts as the Administrator of the CP.

Once it is submitted, you will quit paying your unsecured creditors for past debts. The Trustee will send a notice of the filing along with a copy of the CP to all creditors affected by the CP. This includes anyone suing you or garnishing your earnings. Those activities against you will stop also.

Your creditors will have 45 days to accept or decline the debt settlement CP deal. If your unsecured creditors are disappointed with the proposal, they can vote against. In that case, the Trustee will discuss modifications with you that the Trustee believes the creditors might accept. That discussion will take place prior to the against vote counting. Usually, this means offering more money to them over the maximum 5 year period. The key is that you have to be able to afford to make those higher monthly payments. It will still be only a portion of the total you owe.

In order for consumer proposals to be accepted, a simple majority of your creditors by dollar value who has filed a proof of claim must approve it. If creditors who have filed a proof of claim choose not to vote, that is considered a vote in favour. You also may not even need to have a meeting of creditors. Unless creditors holding 25% in dollar value of the claims filed to request a meeting, or the OSB requests a meeting, there is no need to hold one. If a meeting is not requested, the proposal is deemed to be accepted by the creditors. This is all part of the streamlining.

Acceptance and performance

If your CP is accepted, the OSB (or any type of other interested parties) has 15 days to ask the Trustee to go to court to have the deal court approved. If no such demand is made, the debt plan is deemed to have actually been accepted by the court. More streamlining.

After acceptance and approval, the person is then accountable for making the regular monthly payments to the Trustee that was promised in the debt management plan. There will also be 2 counselling sessions for the person to attend with the Trustee to help them with their financial issues and behaviour.

If you miss 3 monthly payments, or you are greater than 3 months overdue since your last payment, the proposal will be considered annulled. This indicates to your creditors that they are now able to either resume or begin collection actions against you. Not a good thing.

Full performance

As I previously mentioned, the person must successfully complete the debt management settlement plan by making all the required payments and attending the 2 counselling sessions. When completed, the person is entitled to receive a Certificate of Full Performance. This means that you have successfully completed the CP and that all debts caught by it are discharged.

The Trustee will then finalize the administration of your debt settlement plan, get the necessary OSB approval and distribute the money to all the creditors who have filed a proof of claim. The Administrator also is entitled to the government approved fee.

Summary

Consumer proposals must provide your creditors with a better outcome than what they would get in your bankruptcy. I have never had a consumer proposal rejected for someone who took my advice and made all the payments required.

Are you in financial distress? Do you not have enough funds to pay your bills as they come due?

As a Trustee, we are the only professionals acknowledged, accredited and also managed by the federal government to provide insolvency advice and services. A consumer proposal is a federal government licensed debt settlement approach to eliminate your debt. We will certainly help you to pick what is best for you to clear your own debt issues.

Call the Ira Smith Team today so we can eliminate the stress, anxiety, discomfort and pain from your life that your cash problems have produced. With the distinct roadmap, we develop just for you, we will swiftly return you right into a healthy and balanced problem-free life.

We have years and generations of experience assisting people and companies looking for debt restructuring to PREVENT bankruptcy. You can have a no-cost analysis so we can help you to fix your financial troubles. Call the Ira Smith Team today. This will certainly allow you to go back to a new healthy and balanced life, Starting Over Starting Now.

consumer proposals

Call a Trustee Now!