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Options
What are my Options?
· Informal Agreements with Creditors (credit counseling)
· Proposals
· Bankruptcy
· Financial Help: Proposals, Credit Counseling & Bankruptcy
Informal Agreements with Creditors (credit counseling) Advantages: Avoids personal bankruptcy or formal proposal
Disadvantages: Not binding on all of the creditors Creditors can proceed to legal action meaning you may still be garnisheed by a creditor not wanting the offer presented. Not available for all creditors such as income tax, GST debts, employment insurance Difficult to negotiate where there are a large number of creditors R7 on your credit bureau without the protection of the legislation Reported 3 years after completion on your credit record If the plan is more than 36 months the chance of default is higher Costs of the plan may outweigh the benefits
Proposals Advantages: Immediate protection from creditors, no telephone calls, no legal action Binding on all unsecured creditors upon acceptance, the majority passes the proposal and all creditors are part of the proposal Creditors cannot garnishee wages or seize assets, except FMEP Proposal can be a lump sum repayment or monthly payment plan and does not require full payment of debt. (i.e. 20% or 25% of debt) No interest Payments are based on your income and ability to pay Your exempt assets are not affected R7 rating on credit report and remains on your record for 3 years after completion of the proposal.
The legislation dictates that the trustee act both for the individual and the creditor Trustees are monitored by the federal government in Ottawa and the Office of the Superintendent of Bankruptcy may be able to assist you if the trustee is not performing his/her duties in accordance to legislation Trustees are supported by the creditor and legal industry
Disadvantages: Proposal must provide for a better return to creditors than bankruptcy Does not affect debts for alimony, maintenance or student loans If the proposal is not accepted there are two costs: one for proposal and one for bankruptcy
Bankruptcy
Advantages: Immediate protection from creditors Process is usually completed in nine months Cost is usually less than other options Provides one-on-one counseling with a licensed counselor Surplus income may be applicable. This will be discussed with you before you file. No co-signer required Student loans can be written off where the debt is over 10 years old Exempt assets are allowed by provincial law Can operate a business - sole proprietorship Income tax, GST debts and ICBC debts are all included Employment Insurance penalty and interest is written-off 1st time bankrupts can receive an automatic discharge at the end of nine months where there is no surplus and all duties are preformed Reestablishing credit can happen after bankruptcy Individuals are protected by provincial and federal legislation Payments are less than payments to the unsecured creditors Shortfalls as a result of a foreclosure are included in the debts Includes all debts incurred while operating a business while a director or where guarantees were provided
The legislation dictates that the trustee act both for the individual and the creditor Trustees are monitored by the federal government in Ottawa and the Office of the Superintendent of Bankruptcy may be able to assist you if the trustee is not performing his/her duties in accordance to legislation Trustees are supported by the creditor and legal industry
Disadvantages: R9 credit rating for 6 years after discharge with Credit Bureau May lose non-exempt assets (e.g. RRSP, RESP) Cannot be a Director of a limited company while bankrupt Some debts may not be released, such as student loans less than 10 years old or FMEP
Financial Help: Proposals, Credit Counseling & Bankruptcy
With branch offices in Kelowna and Kamloops, Ann Clarke & Associates Inc. is here to help with the following options:
Credit Counseling
Consumer Proposal
Bankruptcy
Budgeting and Counseling Services
Restructuring
Consulting
Contact us: - Kamloops office (250) 377-3255 or 1-866-387-3255 |
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