Posts tagged debt solutions
August 2016 - Personal Bankruptcy & Consumer Proposal Statistics

Canada - There was no increase in personal bankruptcies and consumer proposal filings were up 7.2% as compared to the 12-months ended August 31, 2015.

New Brunswick - Personal bankruptcies were down 2.9% and consumer proposal filings were up 1.7% as compared to the 12-months ended August 31, 2015.

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Guaranteed, Co-Signed and Joint Loans

Generally, a co-signor is usually jointly and severally liable for 100% of the debt.  This means that, if there is a default, the lender will pursue the primary debtor and the co-signer at the same time and will be happy to collect their entire debt out of whomever they can recover from first.

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How to Avoid Bankruptcy

You can’t go bankrupt if you have no debt.  Bankruptcy is a relief valve for debtors who find themselves unable to cope with overwhelming debts.  Bankruptcy is not the only option for resolving debts but the availability of other options is dependent upon individual circumstances.  The sooner you identify and seek to address significant debt, the more options will be available to you.

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Dealing With Debt - Understanding the Two Types of Proposals

Division 1 Proposal Is when a consumer debtor owes more than $250,000 in debts, excluding the mortgage on their principal residence. If creditors don’t accept this proposal there is a deemed personal bankruptcy.

A consumer proposal is when a consumer debtor owes less than $250,000 in debts, excluding the mortgage on their principal residence. There is no deemed personal bankruptcy if the creditors reject the consumer proposal.

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Dealing With Increasing Insolvency Rates

There are lots of factors but, I think the greatest single contributor is the proliferation of easy credit combined with low levels of financial literacy.  High debt levels limit financial flexibility and the ability to weather and recover from financial setbacks resulting from job loss, reduced income, illness, separation/divorce, and other life events.

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February 2016 - Bankruptcy & Consumer Proposal Statistics

Canada - Personal bankruptcies were down 1% and consumer proposal filings were up 9.5% as compared to the 12-months ended February 28, 2015.

New Brunswick - Personal bankruptcies were down 3.9% and consumer proposal filings were up 19.9% as compared to the 12-months ended February 28, 2015.

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Tackling Your Finances Head On

Hiding from the reality of your financial situation will do nothing to improve it. People have a pre-disposition to hide from the truth, particularly when the truth is ugly. Unfortunately, we see this every day.

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Announcement - New Designation for Insolvency Professionals

The Office of the Superintendent of Bankruptcy Canada released Directive 33, Trustee Designation and Advertising, updating the designation to be used by Licensed Trustees with regards to the advertisement, promotion, and communications related to their services.  All trustees will now adopt the professional designation “Licensed Insolvency Trustee”.

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Will I Have To Go Bankrupt Or File A Consumer Proposal If My Spouse Does?

No, if one spouse files personal bankruptcy or a consumer proposal, it may not be necessary for the other spouse to file. This depends on several facts which a Licensed Insolvency Trustee will assist the couple to review. The couple can then make an informed decision as to which option best meets their needs and allows them to achieve their financial goals.

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Consumer Proposal vs. Credit Counselling?

With all of the choices facing financially distressed consumers, it’s important to compare your options. The following chart provides you with information to help you choose the debt repayment solution that best meets the needs of you and your family.  

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How Are Secured Debts Treated In Personal Bankruptcy or a Consumer Proposal?

When an individual files personal bankruptcy or a consumer proposal these loans are not always impacted and the assets can usually be kept as long as the loan payments are current and continue to be made in accordance with the credit agreement.

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Can I Declare Bankruptcy If I Live Outside of The Country?

Generally speaking, under the Bankruptcy & Insolvency Act, if you reside outside of the country you can still declare bankruptcy as long as you meet certain criteria. If you are a previous Canadian resident and are have debt issues you should contact Powell Associates Ltd. to determine if you meet the criteria to file personal bankruptcy or a consumer proposal in Canada.

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Using RRSPs to Pay Down Debt

If you are unable to keep up with your debt payments you should consult a Licensed Insolvency Trustee to discuss your options before cashing-in any of your investments.   Your investment savings may be exempt from seizure so you may be able to keep them if you file for personal bankruptcy or settle your debts through a consumer proposal.

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Can I Claim Bankruptcy a Second Time?

Yes, you can declare personal bankruptcy even if you have been bankrupt in the past as long as you have been discharged. A second time bankrupt you will be eligible for an automatic discharge after 24 months as long as you do not have surplus incomecomply with all of the terms and cooperate with your trustee in the administration of the estate.

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Does My Bankruptcy/Proposal Trustee Work For Me or My Creditors?

The Trustee’s job is to administer the BIA in relation to your bankruptcy or proposal.  The Trustee works for the Court, the creditors and you the debtor; the Trustee is accountable to all parties.  The Trustee should administer your bankruptcy or proposal in a fair and even-handed manner so that your rights and those of the creditors are respected.

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Personal Bankruptcy and Income Taxes – What You Need to Know

When filing a personal bankruptcy income tax debts are discharged the same as any other unsecured debt, such as credit cards and personal loans. If you are struggling with income tax debt or have had your wages garnished then you should seek the assistance of a professional.

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Good Debt vs. Bad Debt

Good debt is for purchases that appreciate in value or significantly improve your quality of life.  Bad debts on the other hand typically do not provide you with any long-term benefit.  If you carry a heavy amount of bad debt and are only able to make minimum payments then it’s time to look for help.

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Beware of Debt Settlement Offers

The debt settlement and credit counselling companies would have you believe that they can easily have your credit balances reduced and save you hundreds if not thousands of dollars.   The problem is they cannot guarantee any results.  They will require that you pay them monthly administration fees and/or a percentage of the settlement amount as payment for their services.  But you need to read their documents very closely to find out what happens to all of those fees that you have paid if they are unable to reach agreements with some or all of your creditors.

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