  
|
|||||||||||||||||||||||||||||||||||||||
 |
|||||||||||||||||||||||||||||||||||||||
  
|
|||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||
|
|
 
 
|
|
FAQ'S ABOUT BANKRUPTCY
Can I deal with my financial problems without declaring bankruptcy? When dealing with any professional, it's important to get references. Speak to other people who have worked with the trustee. Make sure they understand your concerns and have experience dealing with similar situations. Ensure you're comfortable working with your trustee, and that they are responsive, helpful, and compassionate. Also, see if your trustee is willing to offer you enough information to make an informed decision without pressuring you into a first meeting. TOP
What should I look for when meeting a bankruptcy trustee? Not every licensed bankruptcy trustee is the same. The most important things you should look out for are:
Make sure you are comfortable with your trustee. After all, they are the people who will be guiding you through a very challenging period in your life. TOP
What should I gather from an initial meeting with a bankruptcy trustee? After a first meeting, you should have a good understanding of what you need to do to regain your financial security and peace of mind. You should also have a complete picture of your financial position, including the amount of your debts, the value of your assets, your monthly income and expenses, the options available to you, and what may happen to your various assets under different options. TOP
What is a consumer Proposal and how can it help me? A Proposal is an arrangement between you and your creditors that lets you pay only a portion of your debts and/or extends the time you have to pay off your debts. When you file for a Proposal, interest generally stops on most debts while your creditors review your Proposal and decide if they should accept it. After a Proposal is accepted and you make the agreed-upon payments, your debts are considered to be settled in full. Plus, through a Proposal you get to retain all your assets and reduce your debt load. TOP
What are the benefits of a consumer Proposal? With a consumer Proposal, you get to tailor your monthly payments to suit your situation, keep your assets and accumulate more without risk of seizure, stop making interest payments, and stop most lawsuits and garnishments. Plus, your creditors may be willing to accept less than full payment, and your credit rating is affected less than in a bankruptcy. However, preparing a Proposal can be quite complex, which is why it makes sense to rely on a qualified trustee. That way, you get the best possible advice and don't have to deal with your creditors personally. TOP
I can't afford to pay my student loan. What can I do? If you go bankrupt within ten years of leaving school, current legislation says you still have to repay your student loan, with ongoing interest charges. Nevertheless, you will get a certain level of protection by filing a Proposal or a bankruptcy. These filings create a period of time during which student loan authorities are prevented from taking legal action against you. They also let you settle your non-student loan debts in a more structured and manageable way, which should provide you with a stronger future cash flow to deal with your student loan obligations. TOP
What exactly is bankruptcy? Bankruptcy is a legal process that immediately stops all collection efforts and legal actions by your creditors, including lawsuits, asset seizures, and wage garnishments. It gives you the opportunity to free yourself from debt and start over. The process includes counseling sessions to help you regain control over your finances. In some cases, you can even keep certain assets, like your house or car. TOP
How will I know which option is best for me? Whether you file a consumer Proposal or declare bankruptcy, each option has advantages and disadvantages, depending on your personal circumstances. To understand which option is best for you, it makes sense to consult a professional trustee who can help you structure a tailored plan of action. TOP
How will a consumer Proposal or bankruptcy affect my credit rating? If your debt payments are significantly in arrears, the credit bureau has probably already been notified. However, when a bankruptcy or Proposal is filed, the credit bureau is notified again. A first-time bankruptcy stays on your record for seven years, and a second bankruptcy for 14 years. A Proposal stays on record for three years after you've paid off your debts. This means you'll have to prove your ability to pay before you can get credit again. TOP
What assets can I keep during a bankruptcy? In addition, to company pension plan amounts, RRSPs in insurance companies, and cash surrender value of life insurance policies where the beneficiary is your spouse, child, grandchild, or parent, you can keep the items listed below. Most other assets are valued by the trustee and sold unless you make arrangements with the trustee to keep and pay for them. You might also be able to keep assets secured by a bank or finance company if you make arrangements with the creditor. The current exemptions in Ontario, as of December 14, 2005, are as follows:
What is a "discharge" from bankruptcy? This discharge is the legal process within a bankruptcy that releases you from your debts. Usually, a first-time bankrupt will receive discharge after nine months. If you've been bankrupt more than once, you won't be automatically discharged. Either way, the trustee or a creditor can oppose your discharge. If it's opposed, you have to attend a court hearing, at which point the court may grant your discharge, suspend it, attach conditions, or refuse a discharge in unusual circumstances. TOP
What debts are not affected by bankruptcy? Bankruptcy relieves the honest person of almost all normal debts, including credit cards, bank loans, and debts owed to the Canada Revenue Agency. However, certain debts can't be extinguished, including alimony and child support; damages awarded for bodily harm, sexual assault, or wrongful death; fines, including traffic violations; liabilities arising out of fraud; and certain student loans. With the help of a professional trustee, you may be able to stop actions by these creditors until your discharge and/or reduce the amounts you owe. TOP
Will Canada Revenue Agency agree to a Proposal for tax owed? In most cases, Canada Revenue Agency (CCRA) is treated like a regular creditor, and can accept or reject your Proposal like other creditors. CCRA has also recently set up special bankruptcy teams to deal with these situations, and review your prior tax payments. However, new legislation may allow CCRA to become a secured creditor over any or all of your assets. TOP
What happens to assets that I've borrowed against? Secured creditors, like banks, credit unions, and finance companies can collect against the asset you've borrowed against even if you declare bankruptcy. If there's no value in the asset, the trustee will release its interest. If you want to keep the asset, you can make arrangements with the secured creditor. TOP
What about income tax and GST refunds? When you declare bankruptcy, your trustee must file a tax return from January 1st to the date of your bankruptcy, and last year's tax return (if it hasn't already been filed). The trustee may also file a tax return from the date of the bankruptcy to December 31st. If any of these returns generate tax refunds, that money will be used to pay off your debts. If it's found that you owe tax, it will remain owing. In some cases, GST can be returned to you. TOP
Am I allowed to have a bank account? Yes. However, any cash balance in your account on the date of your bankruptcy must be turned over to the trustee. You can only keep the amount you need for your day-to-day living expenses. TOP
How do I rebuild my credit after bankruptcy or consumer Proposal? During a bankruptcy or Proposal, you'll receive counseling to help you rebuild your credit. To improve your credit, it helps to have a stable employment history, and evidence of a stable or growing income, the ability to save or accumulate assets, and the knowledge of how to manage money effectively. Having a co-signor also helps, as does adhering to all your credit contracts, such as paying your car loan or lease, making mortgage payments, etc. At A. Farber & Partners, we have creative options to help you obtain credit after bankruptcy or consumer Proposal. TOP
What are the early warning signs of financial difficulty?
If you answered yes to any or all of these questions, you may benefit from the advice of a qualified insolvency professional. Remember, the sooner you address your financial problems, the more options you have. Possible solutions could include:
[ CORPORATE ] [ PERSONAL ] [ LOCATIONS & CONTACTS ] [ CAREERS ]
Copyright © 2004 A. Farber & Partners Inc. All rights reserved.
|
|
|||||||||||||||||||||||||||||||||||
