I prepared this vlog to explain the differences between a <\/span>consumer proposal <\/strong><\/a>(CP), <\/strong>one of the bankruptcies laws in Ontario<\/strong><\/span> and <\/span>bankruptcy<\/span><\/a>. \u00a0This discussion is based on the inquiries that we are asked often. Hopefully, this information will help you understand better specifically what a CP<\/span> debt settlement strategy is and how it will certainly assist you to remove all your financial obligations. \u00a0All this while AVOIDING personal bankruptcy<\/a>.\u00a0\u00a0<\/span><\/p>\n Main benefits of a CP<\/span><\/strong> How do I recognize if I have a financial problem?<\/strong><\/p>\n If you are having difficulty satisfying your debts or have actually quit paying them, you are probably <\/span>insolvent<\/span><\/a>. Another sign of insolvency is that if your assets if liquidated, will not bring in enough money to pay off your debts. \u00a0When you are all stressed out over the money you owe, for sure you will know that you have <\/span>financial problems<\/span><\/a>.<\/span> How do I know if I qualify for either a CP or bankruptcy?<\/strong><\/p>\n Any person that is insolvent and owes greater than $1,000 is qualified to file either a CP or an assignment in bankruptcy in Canada.<\/span> In CP, you will not be <\/span>giving up your assets<\/span><\/a>. \u00a0You are making an offer to your creditors less than the total amount you owe. \u00a0According to the <\/span>Bankruptcy and Insolvency Act<\/span><\/i><\/a> (R.S.C., 1985, c. B-3) (BIA), your CP has to be a better result for your unsecured creditors than they would receive in your bankruptcy.<\/span> In a CP that has been (deemed) accepted by your creditors and approved by the Court, you begin to make your payments. \u00a0There are no other requirements for your income in CP<\/a>.<\/span><\/p>\n In bankruptcy, nothing happens to your income either. \u00a0However, in a bankruptcy, unlike a CP, your Trustee at the outset has to decide if you are required to make voluntary contributions to your bankruptcy case based off of your income. \u00a0If so, this is called a <\/span>surplus income requirement<\/span><\/a>. \u00a0Also, you will have to file monthly statements of income and expense with the Trustee. \u00a0Your surplus income requirement can change, depending on if your income goes up or down. \u00a0There is no such requirement in CP<\/a>.<\/span><\/p>\n Canada Revenue Agency (CRA) has frozen my bank account and has garnished my earnings. Exactly how can I deal with that?<\/strong><\/p>\n As stated above, once you file a CP<\/a>, there is a stay of proceedings. \u00a0Upon receiving notice from the Trustee, <\/span>CRA<\/span><\/a> stops the garnishee process and lifts the freeze on your account(s). \u00a0The same is true in bankruptcy.<\/span><\/p>\n Will I still owe money after I declare bankruptcy or file a CP?<\/strong> How much time will I be under the insolvency proceeding?<\/strong><\/p>\n The duration of time in bankruptcy will depend on whether this is an initial or 2nd (or more) bankruptcy, whether you have to pay surplus income and if your discharge is opposed or not. \u00a0Depending on your circumstances, it can be anywhere from 9 months to many years.<\/span><\/p>\n In a CP, you can take up to 60 months to pay the total amount you promised to pay. Payments in a CP are required monthly.<\/span><\/p>\n Will anyone find out that I have filed either a CP or for bankruptcy?<\/strong> In either a CP or bankruptcy, your Trustee must send a notice to all of your creditors. So they will know.<\/span><\/p>\n In a CP or a shortened summary administration bankruptcy, the Trustee does not place a legal notice in the local <\/span>newspaper<\/span><\/a> advertising that you filed. \u00a0In an ordinary administration bankruptcy, the Trustee must publish a notice.<\/span><\/p>\n Generally, it is only the OSB, your Trustee and your creditors who are aware of your filing.<\/span><\/p>\n Is my partner or spouse impacted by my CP or bankruptcy?<\/strong> NOTE:<\/strong> There is a body of case-law to suggest that if your CP is fully performed, then there is no debt left for your guarantor to make good on.\u00a0 That type of discussion is too technical for this general blog.\u00a0 If you are in this situation, your spouse should get legal advice before agreeing to pay anything.\u00a0 No such argument could even be considered in a bankruptcy situation.<\/span> In Canada, CP and bankruptcy filings do not conflict with the majority of the <\/span>divorce procedures<\/span><\/a>. In a bankruptcy, the Trustee will stand in the shoes of the bankrupt spouse. \u00a0Ontario is an equalization Province; not a division of assets Province. If the bankrupt spouse is entitled to an equalization payment, that will come to the Trustee.<\/span><\/p>\n In a CP, the Trustee does not get involved at all in any way. \u00a0The BIA does not interfere at all with non-financial divorce issues such as custody. \u00a0It also does not have any effect on support or alimony.<\/span><\/p>\n I hope this consumer proposal discussion about the <\/span>differences between a Consumer Proposal Canada and bankruptcy<\/span><\/a> has been helpful to you.<\/span><\/p>\n Do you have severe debt and don\u2019t know where to begin to fix it? Are your debt issues causing you to lose sleep? \u00a0Is too much debt triggering stress and anxiety, discomfort and pain? We know that discomfort better than anyone and we can get it out of your life.<\/span> If so, call the\u00a0Ira Smith<\/a>\u00a0Team\u00a0today. We have years and generations of experience helping people and companies seeking financial restructuring or a debt settlement strategy. \u00a0As a\u00a0licensed insolvency trustee<\/a>, we are the only specialists recognized, accredited and supervised by the Federal government to give insolvency advice and remedies to assist you and to prevent\u00a0bankruptcy<\/a>.<\/p>\n Call the\u00a0Ira Smith<\/a>\u00a0Team\u00a0today so you can end the stress and anxiety financial problems create. \u00a0With the special roadmap, we will develop with and special to you, we will promptly return you right into a healthy, balanced hassle-free life.<\/p>\n You can have a no-cost appointment to assist you so we can fix your debt troubles.\u00a0Call the\u00a0<\/a>Ira Smith<\/a>\u00a0Team\u00a0today. This will certainly allow you to make a fresh start, Starting Over Starting Now.<\/p>\n I prepared this Brandon’s Blog to explain the differences between a consumer proposal Canada and bankruptcy. i hope this will help explain the differences.<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[666,3733,5,562,439,799,6,766,849,847,94,863,465,33,3274,79],"class_list":["post-7294","post","type-post","status-publish","format-standard","hentry","category-brandon-blog-post","tag-assignment-in-bankruptcy","tag-bankruptcies-laws-in-ontario","tag-bankruptcy","tag-bankruptcy-and-insolvency-act-bia","tag-canada-revenue-agency","tag-consumer-bankruptcy-in-canada","tag-consumer-proposal","tag-consumer-proposal-canada","tag-consumer-proposal-vs-bankruptcy","tag-difference-between-consumer-proposal-and-bankruptcy","tag-insolvency","tag-ira-smith-trustee","tag-office-of-the-superintendent-of-bankruptcy","tag-personal-bankruptcy","tag-should-i-use-bankruptcy-or-a-consumer-proposal","tag-surplus-income"],"_links":{"self":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts\/7294","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/comments?post=7294"}],"version-history":[{"count":5,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts\/7294\/revisions"}],"predecessor-version":[{"id":8189,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/posts\/7294\/revisions\/8189"}],"wp:attachment":[{"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/media?parent=7294"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/categories?post=7294"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/irasmithinc.com\/blog\/wp-json\/wp\/v2\/tags?post=7294"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n<\/span>
\n<\/span>Take into consideration several of the benefits of the <\/span>CP<\/span><\/a> vs. bankruptcy:<\/span><\/p>\n\n
\n
CP vs. bankruptcy<\/span><\/strong><\/h2>\n
\n<\/span><\/p>\n
\n<\/span>
\n<\/span>Will I have to give up my assets?<\/strong>
\n<\/span>
\n<\/span>As soon as you file for bankruptcy you will certainly have to give up your non-exempt property to the Trustee. These possessions will be marketed and sold. \u00a0The cash from the sale of your property will be used to pay for the cost of the bankruptcy administration. The balance will be dispersed among your creditors.<\/span><\/p>\n
\n<\/span>
\n<\/span>What occurs to my wages or salary?<\/strong>
\n<\/span>
\n<\/span>Nothing. \u00a0You receive it as normal.<\/span><\/p>\n
\n<\/span>
\n<\/span>Perhaps, because of neither a CP<\/a> nor bankruptcy covers:<\/span><\/p>\n\n
\n<\/span>
\n<\/span>As soon as you file for bankruptcy or a CP, your Trustee must file a notification with the <\/span>Office of the Superintendent of Bankruptcy Canada<\/span><\/a> (OSB) to start either process. \u00a0The OSB does run a public database showing the status of all files.<\/span><\/p>\n
\n<\/span>
\n<\/span>Your <\/span>partner\/spouse<\/span><\/a> will not be impacted by your CP or bankruptcy unless he\/she co-signed as a borrower or has guaranteed payment for any of your debts.\u00a0 If they have guaranteed some or all of your debts, then those specific creditors can ask your spouse for payment in full.\u00a0 <\/span><\/p>\n
\n<\/span>
\n<\/span>Just how will my CP or bankruptcy impact my existing divorce case?<\/strong><\/p>\nConsumer Proposal Canada or bankruptcy:\u00a0 Conclusion<\/span><\/strong><\/h2>\n
\n<\/span><\/p>\n![\"consumer](\"http:\/\/www.irasmithinc.com\/blog\/wp-content\/uploads\/2018\/12\/consumer-proposal-canada.png\" "\\"consumer")
<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"