Richard Killen & Associates

Brampton Consumer Proposals by a Bankruptcy Trustee

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How a Richmond Hill Bankruptcy Advisor Can Aid in Your Debt Relief

An insolvency advisor in Richmond Hill can help you comprehend how the bankruptcy procedure works to help you get financial obligation relief. An accredited insolvency trustee, or LIT (previously called a personal bankruptcy trustee), can be this kind of consultant.

A LIT can give insightful, timely and practical suggestions and orient you in the right direction as you deal with life-changing choices in a precarious financial circumstance.

Comprehending How Insolvency Functions

Bankruptcy in Canada is a legal proceeding handled in federal courts, following guidelines according to the Personal bankruptcy and Insolvency Act.

When an individual can no longer repay arrears, declaring personal bankruptcy can provide a fresh monetary start. It does this by disposing of unsecured debts, such as charge card financial obligations and medical expenses, while offering the debtor instant protection from financial institution actions like harassing collection calls and legal risks, while at the same time permitting some procedure of payment to the creditors utilizing the individual's possessions to repay a portion of the outstanding debt.

In theory, it's a win-win agreement for everyone involved; the bankrupt individual gets relief from crippling debt and creditors get a reasonable share of the settlement for what they are owed.

When you total the number of bankruptcy duties and requirements, you get your discharge. The discharge from personal bankruptcy is what removes all debts declared in the bankruptcy filing.

Debts In Personal Bankruptcy

Personal bankruptcy can get rid of most unsecured debts, including:

credit card financial obligations,

medical bills,

lines of credit,

unsecured bank loans,

tax debts,

payday advance,

unpaid utility bills, such as electrical and telephone bills.

Safe financial obligations such as home mortgages and auto loans that are guaranteed with an asset or security can not be incurred in bankruptcy.

These financial obligations receive unique treatment in insolvency:

Trainee loans that are less than 7 years old (if trainee loans are between 5 and 7 years old, the trustee might appeal and make a challenge application to have them consisted of).

Kid assistance payments.

Spousal support/ spousal support payments.

The court ordered fines and restitution payments.

Debts acquired from deceitful activities.

Richmond Hill Insolvency Exemptions

When you're faced with overwhelming debt and simply do not have a method to repay your creditors, the primary step is to talk with a certified insolvency trustee. A LIT will examine your monetary scenario and help you decide if filing for insolvency is the very best service for your financial issues.

Determining and assessing your finances will include an evaluation of:

Your earnings and budget, because you will be required to make a month-to-month payment into your personal bankruptcy based upon government limitations embedded in the Bankruptcy and Insolvency Act. If your earnings are above the limit, you are required to pay for surplus income.

Your possessions may be utilized to repay the outstanding debt.

Though your assets might be sold and used for repayment of debts, insolvency laws in Canada enable exemptions based on where you live.

If you declare personal bankruptcy in Richmond Hill, you can keep:

Individual clothing for you and your dependents.

Family furnishings and home appliances.

Equipment/tools that you use to earn money are worth as much as $14,405.

All RRSP, RRIF, and SPSP savings, other than contributions made in the last 12 months before bankruptcy filing.

Automobile, truck, or any motor vehicle worth up to $7,117.

Your home, if the equity does not exceed $10,783.

If your home has an equity value over the exemption limit, your LIT can help you make plans with your lenders to buy back the asset by paying off the amount that exceeds the limit.

Your LIT can also explore other financial obligation relief alternatives to keep you home while still dealing with your debt. Insolvency options can consist of a debt management plan or a customer proposal.

How Do You Submit Personal Bankruptcy?

A licensed insolvency trustee will do all the paperwork and filing for you. After your initial consultation, when you have actually examined all your choices and decided that bankruptcy is the best option, you will need to provide more personal details to complete all of the needed documents. Your trustee will also assist in the process of preparing a proposition or official strategy for your creditors.

When all the documents are signed, the trustee will send all the paperwork to the workplace of the Superintendent of Personal Bankruptcy (OSB) and send a bankruptcy notice to all your financial institutions. At this moment, you are considered lawfully insolvent and this can not be reversed without a court order.

Upon submitting the insolvency, the automated stay of proceedings immediately works. This prevents creditors from continuing any collection actions against you. This stress eliminating feature "stays" or stops annoying phone calls, wage garnishments, freezing your bank accounts, and taking legal action against you.

If financial institutions continue to bug you, the automated stay gives you the legal protection to sue them and take them to court.

As a legally insolvent individual, you are required to carry out several insolvency tasks. These duties consist of:.

make your monthly payments.

attend 2 counseling sessions.

Report your earnings and costs regularly to your trustee,. offer essential tax details.

attend a creditors' meeting or evaluation, if needed.

If a financial institution's meeting or examination with the Official Receiver is called during the insolvency process, you will get a notice and will be required to take care of and respond to numerous questions under oath about your financial affairs.

Your trustee will meet with you before the meeting or evaluation to go through a number of questions you are likely to be asked, and help you prepare for the assessment.

An automated insolvency discharge will apply after 9 months for a first-time bankrupt. A creditor, your trustee, or the Superintendent of Personal Bankruptcy can oppose your discharge if you have not completed any bankruptcy requirements.

Your personal bankruptcy can also take longer than nine months if you have surplus income. If you have effectively completed your bankruptcy responsibilities, your discharge will not be challenged, and you can begin a new life with a fresh monetary start.

If you are thinking about eliminating unmanageable debt, speaking to an insolvency advisor in Richmond Hill can help put things in perspective. A licensed insolvency trustee is the best consultant you can talk to, as they are the only debt professionals accredited by the federal government to deal with these legal procedures.

They can help you understand how insolvency will affect you and your family and guide you through options that can likewise handle your debt problems.

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Managing Your Debts With A Bankruptcy Trustee In Scarborough

A bankruptcy trustee in Scarborough can help you sort out your bankruptcy petition and debt problems and aid you in paying your creditors back in order.

Let a bankruptcy trustee in Scarborough guide you through filing for bankruptcy and dealing with unpaid debt. In life, there are many instances where you’d need to take out a loan to pay bills or to take care of emergencies, and things get out of control.

If you ever find yourself on the verge of filing for bankruptcy, always remember that options are still available. You aren’t alone when filing a bankruptcy petition; a bankruptcy trustee’s job is to assist you throughout the process.

You won’t have to worry about how to start your petition or how to deal with your current creditors. Trustees have a variety of roles and responsibilities wherein they aid both parties in the case to reach a compromise and have a proper repayment plan.

In Bankruptcy, What Is the Role of The Trustee?

When you file for bankruptcy and request the help of a trustee, you will be appointed one by the court. These professionals have knowledge and skills regarding legal issues in bankruptcy, accounting, business, and management.

Trustees are there to oversee the bankruptcy process and manage the case when needed. Depending on the type of insolvency case, trustees or Licensed Insolvency Trustees (LITs) have the power to ensure the process is followed under the law.

LITs are compensated for the services they offer. For administering the process, they receive a commission based on the percentage paid to the holders of the secured claims. Their payment falls upon reasonable expenses depending on how the case goes.

How Do You Work With A Bankruptcy Trustee?

It all begins when you file for a bankruptcy petition. Once the petition gets approved, the court appoints a LIT to handle your case. You get a notice with all the information you need to contact the LIT assigned to you.

What might surprise you is that you only get to meet the LIT assigned to you once you go to the meeting creditors. All information presented to the court goes through the trustee, who will verify your assets and liabilities.

If you have any questions about the bankruptcy process, you can always ask the trustee assigned to you. They can answer your questions and advise you on the best options for your case. 

The Role Of A Bankruptcy Trustee

A LIT has many different roles, depending on the kind of bankruptcy petition they’ve been assigned. They can handle more or fewer roles or control when the situation needs it. Trustees are always expected to mediate the case and to be entirely unbiased.

Facilitates The Meeting Of Creditors  

LITs facilitate the 341 meetings or the meeting of creditors, which is mandatory for debtors to attend. Trustees will ask you about your financial situation and the legitimacy of your documents. The sessions are often short, and only some creditors are required to attend.

Can Object To Discharge

A trustee can object to a discharge when there are false statements from the debtor to the trustee or judge. It happens when fraudulent activity is spotted in the proceedings or in the paperwork that the debtors provide.

Review Or Approve Loan Cram-Downs

Cram-downs often happen when the court is imposing a bankruptcy reorganization plan. It still happens even when there are objections from creditors. Trustees have the responsibility of reviewing or approving these types of procedures.

On The Debtor’s Side:

Reviewing The Debtor’s Financial Data

LITs are tasked to review all the data you submit to the court. All your paperwork must go through a trustee when filing a bankruptcy petition. They will also decide whether you need to provide more documents or prove that your documents are legitimate

Examining The Debtor’s Property And Assets

The trustee assigned to you will also have to look up your assets and property. It‘s essential to have a third party check them to ensure that everything is well accounted for and put into writing before finalizing any documents.

Liquidating And Collecting The Debtor’s Nonexempt Property And Assets

The debtor’s assets and properties are evaluated, measured, and liquidated by the LIT. The procedure is done to repay unsecured debts or other related debts properly. The way that the creditors are paid is through priority.

Handling The Sales Of The Debtor’s Property Or Assets

The trustee’s responsibility is representing the debtor in selling their property under a bankruptcy proceeding. They are also responsible for reorganizing a debtor's business or any assets that would continue operation after the bankruptcy petition.

Converting Debtor Assets To Cash

As the LIT is in charge of the debtor’s assets and properties throughout the bankruptcy proceeding, they also have the power to convert the assets into cash. It’s done so that the LIT can pay off creditors on the priority list easier.

Reviewing Exemptions Claimed By The Debtor

In a bankruptcy petition, debtors can claim several reasons they should be qualified for bankruptcy. It’s the LIT’s job to check whether the claims are valid and if the bankruptcy petition is legitimate enough for approval.

The Creditors' Meeting: Why Does It Matter?

You might often come across the creditor's meeting or the 341 meeting and wonder why it’s crucial. In the meeting, trustees must verify your identity and current financial documents. You have to be prepared with all your documents and paperwork for the presentation.

The LIT can also ask you questions under oath to verify whether the information you’ve given is accurate and truthful. Meetings like these are essential to help sort out your financial situation and give creditors an idea of your ability to repay your debts.

Once the meeting concludes, you can talk with the LIT to turnover nonexempt property. The LIT can then assign you a schedule based on the repayment plan you and the creditors agreed upon.

Are Trustee Relationships Important?

You can work things out better if you are familiar with a LIT's different roles and responsibilities. Understanding how bankruptcy works will make your and the LIT's responsibilities more manageable and timelier.

That means you can provide the documents and paperwork the LIT needs without getting confused. You are also aware of the actions that the trustee can take within the bankruptcy process.

You can also ask questions regarding the process of the LIT. Remember that you are working with the trustee, and a strong relationship comes from respect for each other’s roles in the procedure. You can contact a bankruptcy trustee in Scarborough if you have more queries.

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The Benefits of Credit Counselling in Brampton

If you are looking for help to manage your debt and improve your financial situation, you may have considered credit counselling in Brampton. Credit counselling can provide you with the tools and knowledge you need to make sound financial decisions and get your finances back on track.

What is Credit Counselling?

Credit counselling is a financial service designed to help consumers manage their debts and avoid future debt. Counsellors work with consumers to create a budget and payments plan and provide education on financial management.

What Are the Benefits of Undergoing Credit Counselling in Brampton?

If you are a resident of Brampton and find yourself in a difficult financial situation due to overwhelming debt, you may benefit from credit counselling. The following are some of the benefits that credit counselling can offer you if you wish to manage your debt:

1. You will be working with certified credit counsellors who are based in Brampton

One benefit of credit counselling is that it provides you with the opportunity to speak with a certified credit counsellor about your finances. This type of counselling can help you understand your current financial situation and make better decisions about your future.

2. You will develop a “get out of debt” plan

If you’re buried in credit card bills and other debt, it can feel like you’ll never get out from under the weight of it all. But with the help of a credit counselling professional in Brampton, you can develop a clear plan to get out of debt and back on solid financial footing.

A central component of credit counselling is developing a workable plan to become debt-free with the assistance of a counsellor. You will review the advantages and disadvantages of various debt relief strategies, including credit card forgiveness and debt management.

3. You will gain financial education

Another benefit of considering a credit counselling service is that you will gain access to financial education. Credit counselling sessions allow you to assess your financial situation and identify potential improvements. During these sessions, topics like budgeting, cash flow, and income will be discussed.

This can be incredibly useful in helping you to better understand your finances, and in turn, make more informed and responsible decisions about your spending and saving habits.

Bottom Line

During credit counselling, you’ll work with a trained counsellor to review your financial situation and come up with a budget that will help you meet your debt repayments. You’ll also develop a debt management plan that will consolidate your debts and help you pay them off within a certain time frame. And perhaps best of all, you’ll have someone to provide guidance and support throughout the process.

If you are seeking help with your finances in Brampton, credit counselling in Brampton may be the best next step. Credit counselors can assist you in creating a budget and help you work towards eliminating debt.

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The Four Best Consumer Debt Solutions in Canada

Personal debt loads are at record highs in Canadian households and more people than ever need consumer debt solutions to deal with their debt and find alternatives to bankruptcy. Canadians are very lucky as they have a number of options that they can take to help them reduce or eliminate debt.

Let’s have a look at some of the safest and best debt relief solutions in the country that can help you to deal with your debt problems.

Debt Consolidation

The idea of debt consolidation is to combine all of your current debts and pay it all with a new loan. Essentially, it does not put an end to your debt, because with the new loan you have a new debt to pay. However, it can greatly help to make your debt payments more manageable. For one, if you manage to pay all your current debts with the new loan, you would be left with just one debt to pay instead of multiple debts. 

Another advantage is, if you get the loan with a lower interest rate than what you are paying with your current debts, this will automatically reduce the monthly amount that you will need to pay. 

Debt consolidation loans are not easy to obtain as you will need to have sufficient income as well as possibly some sort of collateral to secure the loan, some creditors even ask you to provide someone to cosign a loan with you.

Credit Counseling

Credit counseling is another reliable debt solution for consumers in Canada. This type of solution is often offered by a Licensed Credit Counseling Agency. One very helpful tool that can help solve your debt problems is a debt management plan or DMP.  

A certified credit counselor will review your financial situation and assess your ability to make payments. If you qualify, they will proceed to negotiate with your creditors to reduce interest and fees, and create a repayment plan that will help you to pay back your debts over a period of three to five years.

Consumer Proposal

A consumer proposal is a legal debt settlement program provided by the Canadian government under the Bankruptcy and Insolvency Act. It is a legally binding contract that can be administered only by a licensed insolvency trustee. 

The process involves your trustee negotiating with your creditors to reduce the total amount you owe them, stop interest fees and other charges and for you to be able to arrange monthly payments for up to a period of five years.

A consumer proposal is safe and reliable because it will legally bind you and your creditors to an agreement that you will pay only the portion agreed on and that they will disregard the balance. This debt relief solution allows you to avoid bankruptcy, but offers you the same creditor protection as bankruptcy.  

Personal Bankruptcy

Bankruptcy is generally considered the very last option when dealing with debt. It is a legal process managed by the federal government through a licensed insolvency trustee. You pay a monthly payment to your creditors through your trustee. 

You are provided legal protection from creditors through an automatic Stay of Proceedings. At the end of the bankruptcy, which usually last for nine months, all your debts are cancelled.

With many consumer debt solutions available, it can be hard to find the right solution for your situation. Talking to a debt expert, like a licensed insolvency trustee, can greatly help you to understand the advantages and consequences of each so can make the best choice for you and your family.

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5 Reasons for Working With a Licensed Insolvency Trustee

When facing financial problems, you could work with a licensed insolvency trustee to find appropriate solutions. It can be overwhelming to face your debts on your own, and sometimes you feel like there’s no other way but to file bankruptcy.

A licensed insolvency trustee assists you by giving your guidance and advice on how you could handle your financial troubles. The good thing about this is that these professionals help you by offering services that allow you to solve your financial problems over time.

What Is a Licensed Insolvency Trustee?

A licensed insolvency trustee or LIT works with individuals who need debt assistance. These professionals have seen all kinds of debt situations and have more than enough experience under their names.

Their main goal is to help inform people about other viable options to solve their financial difficulties. Not everyone is well informed about the many choices to make paying loans easier. A LIT is the best person to work with to explore and consider these options.

LITs help make sure that you don’t get abused by creditors. On the other hand, your creditors also have rights, and LITs ensure that these are respected. LITs function as your third party when dealing with your creditors.

Does the Government Assign a Licensed Insolvency Trustee?

The government licenses a LIT through the Superintendent of Bankruptcy. They are federally regulated professionals and will not charge you for preliminary consultations. They work with the Canadian Government to help people out of their debts.

It’s also important to know that the Government of Canada does not employ these professionals. LITs are accountants that various debt service companies employ. To be qualified as a LIT, they undergo training and get licensure.

When to Call for the Help of a Licensed Insolvency Trustee

You have loans you need to pay, but you’re not sure when to call a LIT for help. One way to know is if you are already struggling with how to pay off your loans. You don’t have to wait until you need to file for bankruptcy to ask for help.

Call a trusted licensed insolvency trustee to assist you if you know you will struggle to pay. LITs will not only give you advice but also help you handle your loan problems and guide you toward the right path. Here are some reasons why you should seek LIT's assistance.

1. To Get Advice on Your Debt Problems

LITs could give you professional advice on how you could deal with your financial troubles. You could confide your financial problems to them and present any obstacles or struggles that you face while paying your loans.

You could trust that LITs have the proper experience and knowledge to give you the right advice. They will usually meet with you and will start with a debt assessment. During this process, they will understand your situation more and could offer more sound advice.

2. To Help You Calculate the Appropriate Amount for Your Debt Settlement

As you work with LITs, they will help you create debt settlement solutions. That means you must consider what amount from your budget you will set aside to pay all your debt. LITs will help you plan the percentage you could pay for specific obligations.

Planning is essential when paying debts since, as much as possible, LITs don’t want you to end up in bankruptcy. You must ensure you have enough for yourself and pay off a good percentage of your monthly loans.

3. To Help You Create Proposals for Debt Management

LITs could help create consumer proposals for you. Not everyone is familiar with creating consumer proposals to help them deal with their dues. Trusted licensed insolvency trustees could step in and assist you in creating a proposal that you submit to your creditors.

Not every creditor has the same qualifications and rules. You might get approval from some creditors, while you might not get approval from others. The best-case scenario is when you and your creditor agree on a proposal that enables you to pay your loans more manageable.

4. To Conduct an Assessment of Your Financial Situation

As mentioned before, LITs conduct an assessment of your financial standing. You are informed of your financial status not only to understand your situation better but also to be aware of it. Through this process, they could give you valuable counseling when needed.

Usually, you have to attend at least two credit counseling sessions. Your LIT will then give you advice and tools that could help you improve or avoid future debts. Unlike debt counselors, LITs have the authority to negotiate deals to help you pay less or have lesser interest rates.

5. To Help You Find the Proper Debt Management Options

LITs don’t only help you create consumer proposals, but they could also assist you with bankruptcy. Even though the goal of asking for help is to avoid bankruptcy, some people have to deal with the consequences, and reliable licensed insolvency trustees also help them.

A LIT is the only professional authorized to handle government-regulated insolvency proceedings. Bankruptcy is one of those proceedings since it is a way for a person to get discharged from their dues.

Be Free From Dealing With Your Debts Alone

You don’t always have to face your financial troubles alone. Many people feel embarrassed or anxious to share their economic plights with anybody else. LITs are a great choice to work with since they are licensed professionals.

LITs could help deal with creditors. Once done with your consumer proposal, your LIT will directly deal with your creditors. Unsecured loans can’t collect or pursue legal proceedings against you.

You won’t have any trouble looking for trusted licensed insolvency trustees. They are easy to locate as you only need to search the registry in Canada. You could always find LITs in any part of the country, even in the furthest remote locations.

Don’t hesitate to work with LITs for your financial problems. It’s never a good idea to wait until the last minute to find the solution you need. Sometimes you also have to take the initiative and contact a licensed insolvency trustee to start solving your financial problems quickly.

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Why Seek the Help of a Bankruptcy Advisor in Richmond Hill

When contemplating bankruptcy, it is critical to consult with a bankruptcy advisor in Richmond Hill. Although the bankruptcy process can be intricate and intimidating, a seasoned advisor can help you manage the process and make the most advantageous steps for your financial wellbeing.

What is Bankruptcy?

Bankruptcy is a legal process that allows you to deal with debts that you can no longer afford to repay. When you declare bankruptcy, an official receiver is appointed to manage your finances and assets. They will work with you to try to repay as much of your debt as possible.

Bankruptcy can be a perfect solution if you're struggling to repay your debts, but it's not right for everyone. You should speak to a financial advisor to see if bankruptcy is the best option for you.

When Can You Declare Bankruptcy?

There are several factors to consider before deciding to declare bankruptcy. The type of bankruptcy filed will determine the requirements and consequences. For example, Chapter 7 bankruptcy requires the sale of assets to repay debts, while Chapter 13 bankruptcy enables the retention of assets but requires the repayment of debts over time.

Additionally, one must weigh the impact of bankruptcy on your credit score and future ability to obtain loans. Bankruptcy is a significant decision with implications that must be fully understood before taking this step.

What Can a Bankruptcy Advisor in Richmond Hill Do for You?

If you are from Richmond Hill, receiving guidance from a bankruptcy advisor can assist with making this decision.

1. It Can help you determine if bankruptcy is the right option for you.

If you're considering bankruptcy, you probably have a lot of questions. How will it affect my credit score? What are the long-term consequences? A bankruptcy advisor can answer all of these questions and more. They can help you understand the pros and cons of bankruptcy and make an informed decision about whether or not it's the right option for you.

2. A bankruptcy advisor can help you create a financial plan after bankruptcy.

The decision to file for bankruptcy can be difficult, but it does not have to mark the end of your story. A bankruptcy advisor can help you create a financial plan to rebuild your life post-bankruptcy. With the right guidance, you can make a successful comeback after filing for bankruptcy.

Bottom Line

If you're considering bankruptcy, it's important to seek professional guidance. A bankruptcy advisor can create a personalized plan that fits your unique situation, and provide valuable guidance on how to navigate the bankruptcy process, improve your credit, and make smart decisions about your future.

Don't go through bankruptcy alone – reach out to a bankruptcy advisor in Richmond Hill today.

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Declaring Bankruptcy in Brampton is a decision not to be taken lightly as Licensed Insolvency Trustees can provide other solutions that can solve your debt problem.

If both your loan payments and other expenses per month exceed your income, you should start looking for a reputable debt consultant who can supply you with advice on debt elimination strategies.

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There are many solutions to debt if you consult a Pickering Licensed Insolvency Trustee as they can provide you with the best solutions and services for any debt concern

We’ve helped many clients solve their debt problems through the years and we understand the comfort a debt remedy can bring into your life. Maybe you’re having second thoughts about calling our office, but it could be one of the most tension alleviating calls you can ever make.

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Personal bankruptcy in Georgetown can mean a new financial beginning for people with debt, so consult a Licensed Insolvency Trustee to see if it is right for you.

Declaring bankruptcy in Ontario gives you the opportunity to have a fresh financial start which puts an end to the infuriating phone calls and also the intimidating messages you may be receiving from collection agencies or creditors.

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Declaring Bankruptcy in Brampton is a decision not to be taken lightly as Licensed Insolvency Trustees can provide other solutions that can solve your debt problem.

If both your loan payments and other expenses per month exceed your income, you should start looking for a reputable debt consultant who can supply you with advice on debt elimination strategies.

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Debt experts like Richard Killen and Associates will identify bankruptcy alternatives in Brampton to you after a free comprehensive consultation and assessment.

It is important to know the alternatives of debt solutions to consider if you’re looking for a way to address your increasing financial debt problems.

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Mississauga Consumer Proposals Are a Better Alternative for Paying Debts

Many people think that bankruptcy can be dreadful and it is the last thing they would want to consider as a solution for paying off their excessive debt load. For many people,  Mississauga consumer proposals may be a great alternative to avoid bankruptcy and to settle their debts once and for all.

If it is an option that you can take, a consumer proposal is one of the easiest ways to get your finances back on the right path. There are numerous upsides to consumer proposals that you might want to take into account.

No new loan to make

Other debt relief programs can be effective to help you pay off your debts, like a loan consolidation for example. It would be very easy to take on one new loan to pay off all your debts and have just one loan to worry about paying. But then, there is still a new debt to pay off with new interest charges growing each month. It’s also not very possible that the new loan would cover all your existing debts unless the loan is a very large amount which would require high-interest charges and a rising monthly payment amount, plus a collateral to secure the loan. In a consumer proposal, however, you wouldn’t have to take on a new loan. All your unsecured debts are arranged to a fixed monthly payment with no interest payments until the total sum is paid off.

Lower the amount of your total debt

In a consumer proposal, there is a big chance that all your unsecured debts can be reduced to a  lower amount. Very likely by up to 50 percent for most debts. A licensed insolvency trustee will negotiate repayment terms with your creditors, which can result in some of your debts being forgiven by some creditors, interest charges are waived, and monthly payments are staggered over a period of three to five years without it ever increasing in order to make payments more manageable.

Stop all collection activities

Once you file for a consumer proposal, it immediately puts a stop to any collection activity geared towards you, such as wage garnishments, harassing phone calls from creditors, collection demand letters, and debt collection lawsuits. This gives you tremendous relief from stress, panic, and worry, especially from the aggressive and intimidating tactics used by creditors and collectors to pressure you to pay.

Protect your assets

You won’t have to sell or touch any of your assets, like your home, car or RRSP savings, to pay off your creditors. Once you and your trustee set up a repayment plan and it is accepted by your creditors, it becomes legally binding and you and your creditors have to honor the terms of the consumer proposal. This means that they can no longer run after any of your assets and you can continue to keep them and enjoy them as long as you keep paying what is due every month until all your debts are fully paid.

Negative impact on your credit score is less severe

In a bankruptcy, your credit score automatically becomes an R9, which is the lowest rating. This means that potential creditors will regard you as a high-risk borrower and you will have fewer chances to get approved for loans or mortgages. The R9 rating will also remain on your record for the next six years and will take you longer to get new loans to rebuild your credit.

In a consumer proposal, your credit rating becomes an R7. It’s still not a score many creditors will want to see, but it won’t leave them with a very bad impression of you either because most creditors prefer to see a consumer proposal over a bankruptcy at any time. The R7 score will stay on record for three years after you finish repaying your debts, so this means you can start rebuilding your credit sooner than in a bankruptcy.

No creditors in Mississauga would want you to go bankrupt as it could mean never receiving any money from you. This is why Mississauga consumer proposals will always be the better alternative to a bankruptcy as it can benefit both you and your creditors.

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Many people in Scarborough, Ontario who are bogged down with a very heavy debt load and simply need more time to pay are probably wondering if a consumer proposal in Scarborough is the right debt...