personal bankruptcy Archives - Page 10 of 10 - Ira SmithTrustee & Receiver Inc.

If you are considering personal bankruptcy you are no doubt feeling helpless as a result of a loss or significant reduction of income. The decision to declare personal bankruptcy is a serious one and should be made only after consulting with a licensed trustee. It’s not an easy fix for your financial problems and should be considered a last resort. Bankruptcy is hard on your credit rating, all debts may not be erased, you may have to surrender most of your possessions to your trustee, and you may have difficulty obtaining credit in the future for some time. There are also emotional and psychological effects of bankruptcy to consider. Although your financial problems may seem insurmountable, there are bankruptcy alternatives that may be better options for you. These include:

When is it time to consult a licensed trustee? Consult a licensed trustee as soon as possible if:

You have failed to make one or more payments on a mortgage or loan.
Your credit cards are constantly at their limit.
You are paying bills by taking credit card cash advances.
Your creditors have passed your account to collection agencies who are now calling you.
You have received notice of legal action against you to collect money you owe.

Why choose personal bankruptcy:

It is relatively quick
It can be less expensive than other options
It eliminates your unsecured debts
You will have some protection from creditors, legal action and wage garnisheeing
After your discharge your credit risk can start to improve

Can anyone declare personal bankruptcy? Anyone who is insolvent and owes more than $1,000 is eligible for personal bankruptcy in Canada.

To learn more about personal bankruptcy and bankruptcy alternatives please visit our website. Contact Ira Smith Trustee & Receiver to discuss the right option for you. There is no reason to struggle beneath a mountain of debt when you can gain back your former quality of life Starting Over, Starting Now.

If you have serious financial problems, there are options in addition to bankruptcy. In fact more Canadians are now choosing consumer proposals instead of declaring personal bankruptcy due in large part to a change in the bankruptcy law that came into effect in September 2009. Previously only consumers with debt up to $75,000 could file a consumer proposal. Now the limit is $250,000. Is a consumer proposal right for you?

What is a consumer proposal? A consumer proposal is a way to make a deal with your creditors to repay your debts, but you can’t pick and choose the debts to be included. It’s a contract – a legally binding agreement that’s offered to your creditors through a licensed trustee, as an alternative to bankruptcy. It may be proposed that you pay a lower amount each month over a longer period of time, or pay a percentage of what you owe, and the consumer proposal must be completed within five years.

Is a consumer proposal a viable option for you? If you are an individual or a couple with total debts that does not exceed $250,000, not including debts secured by your principal residence, a consumer proposal might be the right choice for you. You will need to have cashflow from income to enable you to make your proposed payments and/or a third party able to assist you with a lump sum payment.

Why can a consumer proposal be a better option than bankruptcy? You’ll have control of your assets and more cash in hand to deal with daily expenses because a consumer proposal extends the time over which creditors are paid. Creditors like consumer proposals as well because they get more of their money repaid than if you opted for bankruptcy. However, you must be able to make the monthly payments. Your credit rating will also recover faster following the completion of a consumer proposal than from a discharge from bankruptcy. This way you consolidate all of your debts into one monthly payment that you can afford.

Be aware that a consumer proposal will not:

Eliminate your support and alimony obligations
Eliminate your student loan obligations if you ceased being a student less than 7 years prior to filing the consumer proposal
Deal with your secured debts, such as your house mortgage and car loan

Only a licensed trustee in bankruptcy can act as the administrator of your consumer proposal. Go to our website for more information on consumer proposals.

Contact Ira Smith Trustee & Receiver today for a free, no obligation consultation today and take your first step toward living a debt free life Starting Over, Starting Now.