Tag Archives: Bankruptcy Trustees


Sands & Associates Answers your Top FAQs – Part I

Most people aren’t aware of how Consumer Proposals or personal bankruptcy work – so it’s no surprise that as Licensed Insolvency Trustees we get asked a lot of questions each and every day.  We’ve asked some of our knowledgeable staff to answer the top 10 questions we hear – read on!

Can I avoid bankruptcy but still deal with my debts?

Yes!  A Consumer Proposal is another option to deal with your debt.  A Consumer Proposal is simply a deal between you and your creditors to offer less than 100 cents on the dollar, in full settlement of the debt. The creditors vote on the proposal and the proposal is legally binding on all your unsecured creditors, so they can’t pursue you for payment.

Tracey Lowe, Licensed Insolvency Trustee (Burnaby office)

Is a Consumer Proposal the same as debt settlement?

A Consumer Proposal is definitely not the same as a debt settlement agreement. With debt settlement you would need to come up with a lump sum all at once, which can be very difficult; whereas in a Consumer Proposal you can make monthly payments and the payments are pre-determined, making budgeting easier. Also with a debt settlement the creditors do not have to agree to this and they can sue you, obtain a judgement against you and either garnish your wages or put a lien on your assets.

A stay of proceedings goes into effect when you start a Consumer Proposal and creditors cannot sue you anymore. I always say a Consumer Proposal is the best product available because not only is the debt itself reduced, but payments can be made monthly, the interest and penalties are stopped and on top of that the creditors cannot contact you.

Marlene Byrne, Estate Manager (Maple Ridge office)

Can I keep my house and car if I file for personal Bankruptcy?

Provincial legislation states that you are allowed to keep a number of assets, including equity in a vehicle up to $5,000, as well as a portion of the equity in your home.  Any amount over and above that exempt value the trustee has a responsibility to collect or realize for the creditors.  If the equity amount is low a person can generally pay the equity amount throughout the bankruptcy process.

It’s important to note that even if a person has equity in their car or home that is more than the exemption amounts allowed, it doesn’t mean they won’t get to keep the asset.  There are a few ways to deal with the assets in that case.

If you have a loan on your vehicle or a mortgage for your home, we establish through documentation you and your creditors provide if there is any equity (of course the exemptions mentioned above are also factored in).

If the trustee establishes that there is no equity in the vehicle, you can decide whether or not you want to keep making payments on the financing, or to let the car go back to the creditor. If you wish to return the vehicle it will be covered under the bankruptcy or Consumer Proposal.  The same basic options apply with a mortgage.

Sandra Myers, Estate Manager (Chilliwack office)

How does a Bankruptcy or Consumer Proposal impact my spouse? 

If you spouse isn’t attached to any of your loans by co-signing or guaranteeing them, it won’t affect your spouse at all.  Your spouse will be able to maintain his/her credit rating throughout your Bankruptcy or Consumer Proposal.

Cindy Wallas, Estate Manager (White Rock office)

What are your fees as licensed insolvency trustees?

In most cases our fees are legislated by the government of Canada.

All fees taken by licensed insolvency trustees are subject to the approval of creditors, our regulator (The Office of the Superintendent of Bankruptcy) and the court.  This ensures complete transparency and promotes the integrity of the insolvency system.

Individuals that are not regulated by the government or the Office of the Superintendent of Bankruptcy may charge as they wish.

Raj Hara, Licensed Insolvency Trustee (Surrey office)

Check in next week for Part II of our “Top FAQs”!

Ready to talk?  Contact us for a free, confidential consultation to discuss your situation and debt solutions.


Ask the Trustee – July Edition

Licensed insolvency trustee Blair Mantin answers your questions about how to manage debts, including options such as Credit Counselling, Consumer Proposals and Bankruptcy in BC!

Q: What is a Licensed Insolvency Trustee, or Bankruptcy Trustee?

A: Licensed Insolvency Trustees, or Bankruptcy Trustees are those legally empowered to shield you from creditors.  Even debts such as income tax and student loans can be eliminated with the help of a Trustee.  Trustees are also the only people who may file a Consumer Proposal to settle your debts in full, at a reduced amount with no interest.

Trustees are licensed and overseen by the government to administer Consumer Proposals and Bankruptcies.  They must meet specific qualifications and have successfully completed a specialized program.

Trustees are impartial officers of the court, they will review all of your options with you for free, ensuring you have the knowledge needed to resolve your debts.

To find out more about your debt options, call us at 1-800-661-3030 or contact us here to arrange for a free, confidential consultation.



Why your Credit Score Doesn’t Really Matter

Overall, we tend to worry a lot about what other think of us – and there’s no exception when it comes to finances.  We often hear from people in serious financial crisis who are more concerned with what the bank thinks about them (via a credit score) than what difficulties and risks their financial problems are posing to their mental health, family-life and even jobs.  Here’s why you shouldn’t let your credit score be a measure of how your finances are doing:

Easy come, easy go:  Your credit score is calculated using information contained in your credit report.  Essentially a credit score is a moment in time and can change depending on your actions.  You’ll gain points for ‘favourable’ actions, and lose points for actions demonstrating difficulties, such as maxed-out credit.  Lenders have their own unique policies and rules that will determine how your credit score affects your credit application.

It’s important to remember that your score is NOT permanent and can change drastically in as little as two years!

Income and assets affect borrowing power:  Gauging your financial health by your credit score alone is a poor measure at best.  Having a “perfect” credit score doesn’t automatically mean continued access to new credit.  If your credit score is at an ideal level for borrowers, but your income or family situation has varied (ie. pay cut, divorce) then you may not be extended further credit on reasonable terms when you most need it.

Postponing seeking professional debt assistance because of the fear that it will damage your credit rating is common, but ask yourself:  “Could I actually borrow enough to consolidate all my debts if I needed to?”  For many, the answer is no – meaning that in the grand scheme of things, that credit score isn’t actually doing much (if anything) for you.

Credit Score VS. Budget:  Making regular minimum monthly payments on debts will help to keep your overall credit score to stay high – but that doesn’t really reflect your ability to pay the debt off and become debt-free.

Consider the following scenarios:  Person A has what they would consider an ideal credit score, and it’s taken them a long time to achieve that, unfortunately due to some circumstantial changes they’re unable to manage their debt effectively and pay it down in a reasonable amount of time.  Their credit score probably doesn’t provide much comfort.  Conversely, immediately following a bankruptcy, Person B’s credit score will be poor – but now they’re debt-free and can start to rebuild because of the “reset” the bankruptcy has provided.

The main thing your credit score can’t tell you, is how you’re actually doing financially on a day-to-day basis.  If you can’t see being debt-free in the next two years, your budget won’t allow for you to make more than minimum payments on your debts, or you’re consistently relying on credit to meet your living costs (or even borrowing from one account to pay the other) – those are clear indicators that it’s time to seek a professional plan to deal with your debt.

Ready to talk?  We’ve been helping BC residents become debt-free for over 25 years!  Contact us today to book a free, confidential consultation in one of our 15 offices.


How To Turn Around Your Finances – 6 Simple Do’s & Don’ts

If you’re gearing up to turn around your finances and tackle debts, check out our top six tips to help boost your results, while avoiding some common pitfalls.

Do know who you owe.  Organize your statements, online bills and any creditor communications so you have a clear picture of who is owed how much.  Getting back on track will be next to impossible without organizing your bills and working out when payments are due, and how much is to be paid.  Be sure to include smaller bills such as overdue cellphone bills or traffic tolls – small unpaid bills can still create a nuisance with credit ratings and collection calls.

Don’t cash in RRSPs.  RRSPs are a federally protected asset in the event you make a Consumer Proposal, or need to file for personal bankruptcy.  Redeeming retirement funds can cause issues down the road because there often isn’t sufficient time to save again before retirement.  Income tax is also payable on RRSP redemptions which can mean that there  might not be as much coming into your bank account as you’d need.

Do stop using credit.  In order to stop the cycle of borrowing it’s imperative you address the underlying issues that caused the debts in the first place.  Often there is an event that causes a temporary need to use credit to meet day-to-day expenses.  Make sure your cash-flow has improved as much as possible so that you don’t rely on credit each month to make ends meet.

Don’t borrow from family and friends.  Even though it can be tempting to take someone up on a generous offer of financial help, avoid letting friends and family lend you money, or co-sign debts with you.  Family-driven funds often become a temporary fix and can cause friction if not repaid.  Getting a co-signor gives your creditors more pockets to reach into in the event you’re unable to repay the debt in full.  Co-signing a debt means that the parties are both responsible for 100% of the debt – not 50/50 each as is commonly believed.

Do investigate all of your legal options and be careful who you take advice from.  Whether it’s well-meaning but uninformed friends and family, or a debt settlement agency aiming to collect fees – there are a lot of opinions when it comes to what to do with debts.  Always do your research before you sign any agreements and be sure that you fully understand all of your rights and responsibilities with contracts.

Don’t pay for debt advice.  It should never cost you money to find out what your financial options are.  A Licensed Insolvency Trustee will meet with you for free to discuss your specific situation and evaluate your options with you.  Being able to make fully-informed decisions about your future is priceless – but it shouldn’t cost you anything!

Conquering your finances can seem overwhelming, especially at the beginning – but taking the right steps can make being debt-free a goal you can attain!

For more information on how a Licensed Insolvency Trustee can help you achieve a fresh financial start please contact us for a free, confidential consultation.


Is Bankruptcy Right for You?

Personal bankruptcy is an option to achieve a fresh financial start, yet many people have misconceptions about this debt resolution option.

Click the infographic to enlarge.

Click the infographic to enlarge.

Speak with a Licensed Insolvency Trustee to find out if a personal bankruptcy is the best way for you to get back on track!

To meet with a representative for a free, confidential consultation in one of our 15 BC offices, please contact us.


Five Reasons why you should File a Consumer Proposal

If you’re researching how to deal with your debts using a debt consolidation, credit counselling or even bankruptcy then you’ll also want to consider a Consumer Proposal.  Consumer Proposals have gained popularity in recent years, but they’re still a relatively unknown federally legislated solution that Canadians can use to manage their debts.  Check out our five reasons to file a Consumer Proposal, Canadians’ number one alternative to bankruptcy:

Repay what you can afford – A major benefit of filing a Consumer Proposal is that the amount that needs to be paid in full settlement of the debt is typically reduced by a significant amount; it is not uncommon for people to repay only 20-30% of what they owed initially.  Not only is the amount you need to pay to settle the debt in full often greatly reduced, but your creditors must stop charging interest by law.  Accumulating interest is often what hinders people who make regular payments towards their debts from paying off their debts completely.

Deal with all your debts – Instead of juggling several balances, everything can be taken care of by making one simple payment each month, as nearly all creditors can be part of a Consumer Proposal.  Where traditional consolidation loans and plans may not address certain government debts like income taxes or student loans, these types of debts and more can all be consolidated under a Consumer Proposal.

Protection from creditors – Because a Consumer Proposal is a federally legislated debt resolution mechanism, it provides an automatic “stay of proceedings”.  What this means is that once your Consumer Proposal has been filed by the Licensed Insolvency Trustee, your creditors can no longer pursue you for payments, or collection of overdue accounts – they must only communicate with the trustee.  If creditors are seizing your wages or bank account, you’ll further benefit from this stay of proceedings as the garnishment must cease immediately.

Regulated licensing and fees – The Office of the Superintendent of Bankruptcy – Canada oversees all aspects including licensing, filings and fees related to Consumer Proposals – this makes the entire process very transparent.  The trustee’s fees are fully regulated and legislated, which means you can feel assured that there are no hidden fees or other charges.   To start a consumer proposal, there is no ‘lump sum’ or ‘up front’ fees required.  Once you and the Trustee have worked out the monthly payment amount, you make this payment ONCE to the Trustee, and the Trustee sends the proposal out to be voted on by your creditors.  Consumer Proposals are a specialized tool that only a licensed insolvency trustee is legally empowered to administer.  Beware of imitators!

Rebuild your credit – A Consumer Proposal will provide a “reset” on your credit history, allowing individuals the opportunity for a fresh financial start.  Two credit counselling session focused on budgeting and boosting your credit rating are required as part of the Consumer Proposal.  Because you’ll have the means to strengthen your credit rating following the Consumer Proposal AND no longer be carrying debts, your ability to meet future financial goals will be that much greater.

The best way to determine whether or not a Consumer Proposal could be a solution for you is to contact a Licensed Insolvency Trustee at Sands & Associates for a confidential assessment.  Consultations are always free and you’ll walk away with information about not only Consumer Proposals, but other possible options and solutions specific to your situation.

Learn more about Consumer Proposals today!  Contact Sands & Associates for a free, confidential consultation.