Tag Archives: Bankruptcy Trustees

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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.

AskExpertQuestion

Ask the Trustee – June 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: Am I allowed to keep any assets if I file for personal bankruptcy?

A: Absolutely! It’s a common myth that a person won’t be able to keep their assets if they are bankrupt, but the fact is, when you file for bankruptcy in BC the property you are allowed to keep is called “exempt property”, and includes allowances for:

  • RRSPs;
  • Equity in a home;
  • Household furniture;
  • Equity in a vehicle;
  • Work tools;
  • Essential clothing and medical aids;
  • Certain life insurance policies.

Most people retain all their assets in a bankruptcy; even if you own something that is not considered exempt, it does not mean that you would be required to part with it.  Provisions could be made to pay the value of the item to the Trustee, or a Consumer Proposal could be filed instead.

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.

CreditCardsdotCom

What happens to debt after you die?

Blair Mantin, Licensed Insolvency Trustee and vice-president of Sands & Associates recently spoke with CreditCards.com to help shed light on how debts are handled once a person passes away.  It’s a common belief that family is ultimately responsible for repaying a person’s debts after they die – but this is not the case!

As Blair explains, unless the debt was held jointly, or there was a guarantee or co-signer, there is no obligation on another individual’s part to repay the debts.

To read the full article, please click here.

To find out more about your debt obligations and debt solutions, contact Sands & Associates for a free, confidential consultation in one of our 15 BC offices.  We’ve been helping people become debt-free for over 25 years in British Columbia.

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Three Reasons to Manage your Debt Today

When people are facing a tough financial situation, it’s common to want to hope for the best and think that circumstances will change, making the money troubles more manageable.  Unfortunately, habitually postponing dealing with debts can have some unpleasant consequences – and while you’re waiting, the solutions could instead be underway.  If you need some motivation to tackle your debts, read on for our top three reasons not to procrastinate when dealing with debt:

  • Debt stress is real stress: We all know that stress can affect your physical self, and long-term health risks can be serious.  Stress has also been linked to emotional ailments, including depression and anxiety.

A recent study undertaken by Sands & Associates asked respondents to note the impact that their debts had on them.  Individuals overwhelmingly responded that their personal well-being, health, relationships and family all suffered as a result of being in debt.

If debt-stress is starting to show, it’s definitely time to tackle your debts!

  • Issues (and interest) get compounded: If there have been unexpected expenses, or events such as a job loss, health problems, or a divorce, those dilemmas often cause secondary financial problems.  Even once those immediate problems have passed it can be tricky to catch up and get back on track.  While people may resolve the issue that caused the debt, the debt often becomes a long-term problem.

Delaying dealing with debts usually means that the debts grow, whether it’s through interest accruing, or by continuing to take on more debts. It’s not uncommon for someone to have a budget that will allow them to make sizable regular payments towards the debts, but not see the principle balance being reduced – even for years at a time.  Many people are surprised to learn that at ‘normal’ credit card interest rates of approximately 19.9%, their debts will DOUBLE on their own in just 3.6 years, even if no further purchases are made.

If your debt payments are higher than roughly 10% of your monthly take-home pay contact a Licensed Insolvency Trustee such as Sands & Associates today to understand your restructuring options.

  • Panic leads to hurried decisions: Whatever the catalyst for realizing that debts can no longer take a backseat, people often feel a sense of urgency when they decide they need to address their debts.  Unfortunately this sense of panic can lead to decisions that can have negative effects.  For example, hastily cashing in RRSPs can mean depleted savings at retirement or a tax bill to settle later; hurriedly signing into an unregulated debt settlement program can trigger paying unnecessary upfront fees.

If you feel pressed into action, stop and evaluate your choices beforehand with a reputable professional such as a Licensed Insolvency Trustee. It’s always free to meet and discuss how to turn around the situation and get you back on track.

Every day we meet with people who have postponed seeking professional assistance, sometimes for months and even years – until they’ve reached the point of crisis.  The first step in a fresh financial start is often the most difficult, but the end goal might be easier to reach than you think!

To find out more about your debt options, contact us today for a free, confidential consultation in one of our 15 BC offices.

AskExpertQuestion

Ask the Trustee – May 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 are some actions to avoid when trying to get out of debt?

A: Hiding from creditors: Ignoring creditors can lead them taking further steps to collect, including seizing wages and assets.

Paying off family debt first: Paying family debt in priority to other debts can be viewed as preferential treatment and can cause future problems.

Getting a co-signor: By co-signing, a person is agreeing to take on 100% of the debt if you can’t pay.

Cashing in RRSPs: RRSPs are federally protected assets.  Don’t cash RRSPs to pay debt unless you fully understand the rules and the tax consequences.

Paying for debt advice: It should never cost money to discuss your options, so speak to a Licensed Insolvency Trustee first.  We can often give you the information you need to move forward in a free consultation.

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.

Money and Marriage

Relationships and Debt

Finances often play a leading role in relationship problems, in fact, a 2014 poll by Ontario-based Trustees Hoyes Michalos showed that a significant number of relationships face debt challenges from the very start.  Communication also appears to play a significant factor in paying down debts – respondents who did not discuss their debts prior to walking down the aisle were more likely to be among those adding to their debts instead of reducing them together.

One couple, two financial blueprints

Despite sharing a household, a couples’ finances are legally quite separate.  It’s a common misconception that one spouse automatically becomes responsible for their partners’ debts.  This is completely false; there is no automatic liability for debts created by virtue of marriage or cohabitation.  Even one person filing for bankruptcy (or making a consumer proposal) does not automatically assign their spouse into the same.  Make sure you know the facts about who owes what!

  • Unless a spouse has signed explicitly to be responsible for their partner’s debts, there is no ability for a creditor to try to collect from an individual who does not owe this money.
  • Care should be taken before agreeing to co-sign debts.  You are ultimately giving the creditor another set of pockets to collect from should the debt go unpaid.

Some financial Do’s and Don’ts for couples

DO:

  • Set aside time to talk about where your finances (shared and separate) are at. Be honest with your partner about your financial situation.
  • Work together to create a budget for the household.  If you have separate obligations try making three budgets; one to share, and two separate/personal budgets.
  • Set financial goals and be supportive of each other.  Money skills take time; be sure to celebrate your shared successes.

DON’T:

  • Ignore bills and assume your spouse is taking care of everything.  It’s important for both people to remain involved and informed.
  • Play the blame game.  A plan of action is far more useful than accusations.
  • Be afraid to ask for assistance.  If the financial problems are beyond your resources, there are professionals available to help you.  Financial counselors, bankruptcy trustees/proposal administrators help many couples trade financial burden for freedom.

With over 25 years of experience, Sands & Associates is BC’s largest firm of Credit Counsellors, Proposal Administrators and Licensed Insolvency Trustees focused exclusively on assisting individuals and small businesses achieve their “debt free” goals.

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