Tag: debt relief

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MARITAL BREAKDOWN AND BANKRUPTCY: WHICH COMES FIRST?

Bankruptcy, bankruptcy and divorce, Bankruptcy and Insolvency Act, bankruptcy faqs, Consumer Proposal, credit counselling, Debt, debt consolidation, debt relief, divorce, family law, if my ex files bankruptcy how will it affect joint accounts, if my ex files for bankruptcy how will it affect joint accounts, marital breakdown and bankruptcyJust like the old conundrum, “which came first; the chicken or the egg” how would one answer, marital breakdown and bankruptcy: which comes first? It has no definitive answer because excellent arguments can be made for both sides. The same holds true for “divorce and bankruptcy; which comes first”?

Each case has to be decided upon its own merit. Although marital breakdown and bankruptcy, and bankruptcy and divorce, often go hand in hand, marital breakdown doesn’t always lead to divorce if the marriage can be salvaged. As family and parental rights lawyers UT have made clear, bankruptcy and divorce are two separate legal processes that can be at odds with each other.

There are however a few indisputable facts:

  • The number one reason for marital breakdown and couples getting divorced is financial issues. Divorce.com
  • In a recent study one out of every seven people who declared bankruptcy in Canada listed separation, divorce or marital breakdown as a contributing factor to their financial problems.
  • One-third of all people facing bankruptcy are there because they are also going through marital breakdown and divorce in Ontario or a separation. Gail Vaz-Oxlade
  • Bankruptcy doesn’t eliminate all divorce debts. E.g. It does not eliminate alimony or child support.
  • Declaring bankruptcy on joint debts, even debts in divorce, will impact the other borrower.

If causing the least disruption on the children of the family during a marital breakdown and bankruptcy is of prime importance to the spouse with the debts (and presumably that will be the same as the spouse making the support payments), it makes sense to have at least the support provisions of the divorce proceedings agreed upon, including the making of the support order and then file for bankruptcy. Marital breakdown and bankruptcy process will not disturb any bona fide arrangements for support, but keep in mind it will affect property not already dealt with by the family law court.

One such area comes up in this common question: “If my ex files for bankruptcy how will it affect joint accounts?”. Family law proceedings are the one area of provincial law that is left relatively untouched by the Bankruptcy and Insolvency Act, which is a federal statute. However, the Supreme Court of Canada has confirmed that in Provinces that are an equalization jurisdiction (as opposed to a division of property jurisdiction), in a unanimous decision, the court upheld defining equalization payments as debts that are a claim provable in bankruptcy, meaning they are wiped off a person’s slate by the bankruptcy process.

Marital breakdown and bankruptcy is an extremely complicated process, made even more complicated when combined with divorce and requires the expertise of a licensed Trustee to work with your family lawyer to assess your individual situation and provide practical solutions and an action plan. If you have serious debt problems, are contemplating bankruptcy and divorce, or just wish to know more about marital breakdown and bankruptcy, just in case, check out our bankruptcy faqs and then contact Ira Smith Trustee & Receiver Inc. as soon as possible. Starting Over, Starting Now we can help you get your life back on track, even with marital breakdown and bankruptcy looming. Watch for our next blog when we’ll be addressing more issues related to marital breakdown and bankruptcy, and divorce and bankruptcy.

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THE LATEST ON DEBT SETTLEMENT COMPANIES

debt settlement, debt settlement companies, debt reduction, debt relief, debt negotiation, bankruptcy, bankruptcy alternative, credit counselling, debt consolidation, consumer proposalBack in February we did a blog warning the public to Beware of Debt Settlement Companies. At the time the U.S. Federal Trade Commission had effectively shut down debt settlement companies, but no action had been taken in Canada. Although there have been numerous consumer alerts issued about debt settlement companies by the Financial Consumer Agency of Canada (FCAC), many people are still falling victim to them. Consumers are taken in by false claims offering to settle your debts for pennies on the dollar quickly and easily. The reality is that when something seems too good to be true, it usually is. Debt settlement companies exist for only one reason – to take your money! They will not help you solve your debt problems. There is no instant or quick fix for serious debt issues.

Finally this spring the Ontario Ministry of Consumer Services publicly declared it is moving ahead with tough legislative measures to protect consumers from these unscrupulous companies know as debt settlement companies, debt reduction companies, debt relief companies and debt negotiation companies. The Ontario Ministry of Consumer Services intends to introduce legislation that will:

  • Ban companies from charging upfront fees for debt settlement services
  • Limit the amount of fees consumers are charged
  • Require clear, easy-to-understand contracts
  • Establish a 10-day cooling-off period, providing consumers more time to consider their agreements
  • Allow the licenses of non-compliant debt settlement companies to be revoked

The best advice that we can offer is beware! There are currently 60 debt settlement companies operating in Ontario just waiting to take advantage of your situation.

If you are experiencing serious debt problems, there is help available. Contact Ira Smith Trustee & Receiver Inc. We are licensed by the Government of Canada and subject to a stringent code of ethics. As trustees in bankruptcy we will evaluate your situation and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy. If ultimately consumer proposals or bankruptcy is the best option for you, you will have to use a trustee in bankruptcy. Contact us today and take your first step towards living a debt free life Starting Over, Starting Now.

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WHAT IS A SECURED CREDIT CARD CANADA & HOW TO GET ONE

secured credit card, secured credit cards, prepaid credit card, prepaid credit cards, credit bureaus, credit history, bad credit, bankruptcy, consumer proposals, Vaughan, WoodbridgeIn our last blog “How to Fix Bad Credit”, one of the points that we touched upon was the use of a secured credit card to help you build a good credit history. Since the blog was published we’ve had several inquiries about secured credit card offers and how to get one.

What is a secured credit card? Secured credit cards require you to leave a deposit with the credit card issuer as a guarantee. The deposit is usually equivalent to the card limit, but it can be higher. The advantage of a secured credit card is that individuals with no credit history or a history of bad credit have the opportunity to build a positive credit history because most companies report regularly to the major credit bureaus. You can use your secured credit card in the same way as you would use any credit card. Be diligent and pay the balance regularly!

What is the difference between a secured credit card and a prepaid credit card? A secured credit card gives you a credit limit. A prepaid credit card works like a debit card; you have to keep reloading it with your own money. In addition, prepaid credit cards don’t give you the chance to build a credit history because no payment information is reported to the major credit bureaus. So, when you receive those secured credit card offers and prepaid credit card offers, you should know the difference between the two.

How do I qualify for a secured credit card? Most people will qualify for a secured credit card because you deposit the funds to secure the card in advance.

Can I get a secure credit card if I’m in bankruptcy or in a consumer proposal? In most cases, a secured credit card Canada is available as soon as are fully discharged from your bankruptcy. If you are in a consumer proposal, once it has been accepted by your creditors, you are eligible to apply for a secured credit card, but not necessarily guaranteed to be accepted.

Are all secured credit cards the same? No, not all secured credit cards are the same. According to the North Shore Advisory Inc., here are some precautions you should take when looking for a secured card:

  • Be cautious about secured card offers from unknown institutions. If you have doubts about the integrity of a secured credit card offer, contact FCAC toll-free at 1-866-461-3222.
  • Beware of secured card offers from issuers outside Canada. If you have problems, it may be difficult to resolve them if the company is not located in Canada.
  • Avoid offers for secured cards that do not have a recognized brand name such as VISA, MasterCard or American Express. These cards may only be accepted at a small number of stores or may require you to make purchases from a specific catalogue.
  • Read and make sure you understand all the terms and conditions associated with a secured card before you accept it.

How can I apply for a secured credit card from a reputable and recognized brand? For information on a Home Trust Secured Visa* Card click here.

Contact Ira Smith Trustee & Receiver for more information on secured credit cards and for professional advice on insolvency, bankruptcy and managing debt. You can live a debt free life Starting Over, Starting Now.

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Are You Living in a Financial Dangers Zone?

bankruptcy alternatives, consumer debt, consumer proposals, credit counselling, Debt, debt consolidation, debt problems, debt relief, financial dangersAre you living in a financial dangers zone? Many Canadians have been managing to stay afloat but Bank of Canada officials and federal government ministers have been warning about the financial dangers of accumulating too much debt. With interest rates so low many Canadians have been over borrowing; but what are you going to do once the interest rates go up?

Canadians have serious debt problems:

  • Statistics Canada reports that families now owe about $1.65 for every dollar of after-tax income
  • TransUnion reports that the average Canadian’s consumer debt load hit $27,485 at the end of 2012, a 6% increase over the previous year’s level and the first time the figure has been above $27,000

Consumer debt in Canada has reached an all time high. Are you too far in debt? Are you in a financial dangers zone? The Office of Consumer Affairs (OCA) has listed 8 warning signs that tell you when you are too far in debt, in a financial dangers zone and need to make changes in order to avoid bankruptcy:

  1. Frequently pay bills after their due date
  2. Regularly bounce cheques
  3. Use an advance from one credit card to pay the minimum amount on another card
  4. Receive calls from a collection agency
  5. Regularly ask friends or family members for loans
  6. Have your utilities cut off (telephone, hydro, water)
  7. Have cut back on regular budget expenses such as clothing and recreation, or necessities such as food
  8. Are considering taking a second job in order to help pay your bills

If you are living in a financial dangers zone, now is the time to take action. Contact Ira Smith Trustee & Receiver Inc. We can help you with your debt problems before they reach the critical level. Bankruptcy is not the only option to a financial crisis. There are bankruptcy alternatives which include credit counselling, debt consolidation and consumer proposals. Starting Over, Starting Now you can have debt relief.

Call a Trustee Now!