Do you have a friend, partner, associate or acquaintance who is feeling the financial woes or struggling financially? Trying to make ends meet, unable to pay their debts as they become due? If they can’t see themselves paying off their debt and are just making the minimum monthly payments, they may want to know that there are options other than bankruptcy or simply avoiding their creditors.
When someone files an Assignment in bankruptcy, they sign over everything they own or have an interest in, to a Licensed Insolvency Trustee for the benefit of their unsecured creditors. Some assets are exempt, like household furnishings, a vehicle needed for work (limited to certain values), RRSPs and pensions. But a house with equity, RESPs, other vehicles vest in the Trustee who turns them into cash to be distributed among the creditors.
Instead of bankruptcy, a Consumer Proposal can be filed, which offers creditors either a lump sum amount and/or a monthly payment plan which pays a certain percentage to creditors. An individual is able to keep their assets because the Consumer Proposal will offer more in the end than what the creditors would receive from a bankruptcy.
A Consumer Proposal binds all creditors with a majority vote in favour. Some exceptions apply – ie. child support, student loans, fines – which survive and will still be payable at the end of the proposal term.
Other options for dealing with debt include entering a debt management program through a credit counsellor, applying for a consolidation loan, negotiating with creditors, liquidating assets to pay to creditors, and increasing income and/or decreasing expenses to allow more cash for debt repayment.
If someone you know is struggling financially let them know they can make an appointment with one of our Licensed Insolvency Trustees? It’s free and we have a sleep-on-it policy, so all they have to lose is the time spent to get information to be able to make an informed decision. And that’s not really much to lose; it would be time well spent.
Your Success Starts Here
It’s time to Grow
Your business growth and success is only a few keystrokes and a click away. Get in touch with our professional accountants and get your business on track for success today.