Bankruptcy availability to all Canadian adults has been put in place by the Government of Canada to allow men and women who have unbearable levels of debt on their shoulders, to receive relief by having all of their debts, in layman’s terms, cancelled. There are some exceptions for certain special kinds of debts. For the great majority of bankruptcies there is no requirement for a newspaper advertisement.
Your creditors are not allowed to call you once they know you are bankrupt. Nor are they allowed to garnish your wages. In the unlikely event that they do continue, we will look after this for you and have the calls and garnishments stopped. However a creditor may call you if you have a home or car etc. which you want to keep and they have a mortgage or lien.
If you are contemplating bankruptcy you probably, but not necessarily, already have bad credit, recorded with the credit bureau. A first-time bankruptcy will appear on your credit record for six years after you receive your discharge from bankruptcy. We will provide information on obtaining credit after bankruptcy. This will be done during your counselling sessions. Other options may also have an effect on your credit rating.
You are allowed to keep normal personal items and furniture up to $5,000 in value. You can keep one motor vehicle worth $6,500 or less for work. Otherwise the exemption for a motor vehicle is $3,000. RRSP’s and RRIF’s except the last 12 months contributions in some cases. Cash value of life insurance in some cases.
If you are a first time bankrupt you will be in bankruptcy for nine months if your income is less than the amount set by the government or 21 months if your income exceeds the amount. If you are a second time bankrupt you will be in bankruptcy for twenty-four months if your income is less than the amount set by the government or 36 months if your income exceeds the amount. If your income exceeds the amount set by the government you are required to contribute 50 percent of the excess each month. You are then discharged from bankruptcy unless someone objects to your discharge.
Yes, as long as you owe $1,000.00 or more and are not able to make your payments on time, or your assets are not sufficient to pay your debts.
In most bankruptcies you can keep your home if you maintain your payments.
In most instances you can keep your vehicle if you maintain your payments. If the vehicle is worth less than $6,500, required for work and you do not owe a creditor to buy the vehicle, you may be able to keep the vehicle.
Your student loans will only be released from bankruptcy if you have not been a part, or full time, student during the last seven years. After bankruptcy and the end of the five years after you were a student, you still may be released from these debts if you can show to the court’s satisfaction that you have dealt with Student Loans in good faith and payment would be a hardship.
Consumer Proposal availability to all Canadian adults, like bankruptcy, has been put in place by the Government of Canada. Such a proposal is used where a debtor has the ability to pay some but cannot pay all of his or her debts, in the time required by creditors. A portion of the debts are repaid under the proposal. Not all of the creditors have to accept the proposal for it to be legally approved.
Building a Consumer Proposal involves discussing your situation with your trustee. We will prepare the documents including the amounts that you propose to pay into your proposal, for your creditors.
If your debts are less than $250,000, excluding debts secured by your home, you can make a consumer proposal, provided you are not able to pay your bills on time.
Your creditors have 45 days to review your offer, after which it is automatically accepted unless creditors who are owed 25% of your total debt request a meeting in the proposal. If that occurs then a creditors meeting must be held where the proposal is voted upon. You are able during this time to make amendments to your proposal, if you wish, that would satisfy them and get the proposal approved. There is another 15 days waiting period after this, and in the very rare circumstance that an objections is raised during this time, the approval of the court is required.
In most cases creditors will accept a reasonable proposal. If, however, the creditors (50% or more of the total debt) do not accept your proposal, even if you have amended it, the proposal is not accepted and your status becomes the same as it was before the proposal. Creditors can continue in the same way as they did before the proposal was made. Often in these situations debtors will choose bankruptcy.
This is done by making payments to your trustee, who will distribute the required funds to your creditors.
If you are unable to continue with your proposal you could make an amended proposal that provides for terms that you could manage, or you could have the proposal annulled. If the proposal is annulled, the creditors can commence collection action in the same way as they did before the proposal was made.
We will send you a certificate that shows you have completed your proposal. You will not owe any money to any of the creditors that you owed when you filed your proposal, except for special situations such as fines, spousal or child support, misrepresentation, student loans, etc.
If you are contemplating a consumer proposal you probably, but not necessarily, already have poor credit as recorded with the credit bureau. This will continue for three years after you receive your completion of proposal certificate. We will provide information on obtaining credit after making a consumer proposal. This will be done during your credit counselling sessions.
A larger proposal, officially called “a Division One Proposal” is used by a debtor whose debts are in excess of $250,000, excluding the home mortgage. It is also used for a limited company which is insolvent.
In a Division 1 proposal a meeting of creditors must be held and if the proposal is approved by the creditors it must be sent to the court for approval. If either the creditors or the court do not approve the proposal, the debtor is deemed to be bankrupt.
Section 178 debts include fines, restitution orders, damages for bodily harm, sexual assault or wrongful death, alimony, support or maintenance, fiduciary debts, fraudulent debts, dividends to creditors not aware of the filing, and student loans within 7 years of finishing studies. Student loans can be included in a bankruptcy after 5 years if the court approves. Section 178 debts may be released in a Consumer Proposal if included in the proposal and the creditor agrees.
WBLI has offices across Nova Scotia. For assistance with debt consolidation in Dartmouth, Halifax or other areas in Nova Scotia, contact us. We will come to you.