Personal Debt Solutions
If you have debt that is unmanageable and you can’t reasonably pay it back, there are solutions. Sometimes, lacking basic money management skills paired with easy access to credit can quickly lead to an unmanageable situation.
Some common circumstances that could lead to having unmanageable debt include loss of income, low income or lack of steady income, separation or divorce, illness and high medical expenses, unexpected vehicle or housing expenses or business failure.
Let us help you.
Call us at 506.638.9220 or send us a message so that we can contact you.
Explore Your Options
Powell Associates Ltd. is a Licensed Insolvency Trustee. That means that we are licensed and regulated by the federal government to help individuals understand the practical options they have for resolving unmanageable debt.
We have extensive training and experience to quickly assess your individual situation, explain the options and confidently answer your questions.
While a consumer proposal or personal bankruptcy are often the most efficient and effective options to resolve unmanageable debt, they are not the only options. We will cover every relevant option available to you such as budgeting, debt consolidation, debt management plans, and more.
The Powell Commitment
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We will not pressure you to file anything … it’s your choice when and if to file. During the initial consultation, we learn the basics of your situation and outline practical options. Dealing with debt is a serious matter and it is important to us that you fully understand your options before you do anything.
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We will not charge you any fees for a consultation which we can do in person, by video or over the phone - it’s your choice. In fact, for the vast majority of our consumer files, no payments whatsoever are made until after you have been fully educated on practical options, have chosen a path and actually filed.
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We will explain all practical options with you and make sure you understand the pros and cons of any non-legislated processes that you may be considering.
“Good to know! All Powell Licensed Insolvency Trustees are members of the Canadian Association of Insolvency and Restructuring Practitioners (CAIRP), a professional body providing additional education, professional standards and disciplinary processes for its members.”
Consumer Proposal Versus Personal Bankruptcy
One of the main purposes of the Bankruptcy and Insolvency Act is to provide an orderly and equitable way for individuals, unincorporated businesses and corporations to deal with unmanageable debts.
The Bankruptcy and Insolvency Act is federal legislation that is applicable in all provinces and territories and it provides for “bankruptcy” and debt settlement processes called a “proposal” or a “consumer proposal”. Bankruptcies and proposals must be filed with a Licensed Insolvency Trustee who is licensed by the federal government under the Bankruptcy and Insolvency Act and is highly regulated.
A Licensed Insolvency Trustee is an officer of the Court and has responsibilities to all stakeholders in the bankruptcy and proposal processes including you (as the debtor), your creditors, the Court and the Office of the Superintendent of Bankruptcy.
Personal bankruptcy and proposal processes are designed to relieve you of the burden of debts that you cannot realistically repay. The processes also include rehabilitative counselling and guidance so that you can avoid or manage the situations and circumstances that led you to have an unmanageable amount of debt.
However, it is understood that not all such circumstances are reasonably within your control. Some of the common circumstances leading to an unmanageable debt-level are loss or lack of steady employment, separation, divorce, illness, high medical expenses, low income, unexpected vehicle or housing expenses, and business failure. These circumstances, combined with a lack of basic money management skills and easy access to credit, can quickly lead to an unmanageable situation.
Often, the options to resolve unmanageable personal debt include a consumer proposal or personal bankruptcy and we have provided the following list of topics to help you understand the similarities and differences between them. This information is general and we urge you to take advantage of our free initial consultation so that you can discuss your specific situation and understand the practical options available to resolve your debts.
Areas of the insolvency process where Consumer Proposal compare to Personal Bankruptcy:
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Why File a Consumer Proposal Instead of Filing for Personal Bankruptcy
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Criteria for qualify to file a Consumer Proposal or Personal Bankruptcy
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Will a Consumer Proposal or Personal Bankruptcy deal with Business Debt
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Can creditors stop me from filing a Consumer Proposal or Personal Bankruptcy
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Do I have to meet with my creditors if I file a Consumer Proposal or Personal Bankruptcy
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Is there a notice in the Newspaper if I file a Consumer Proposal or Personal Bankruptcy
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If there a public record of my Consumer Proposal or Personal Bankruptcy
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Can I keep my assets if I file a Consumer Proposal or Personal Bankruptcy
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Am I required to report my monthly income if I file a Consumer Proposal or Personal Bankruptcy
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Do I receive any financial counselling if I file a Consumer Proposal or Personal Bankruptcy
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How much does it cost to file a Consumer Proposal or Personal Bankruptcy
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What are my duties to successfully complete a Consumer Proposal or Personal Bankruptcy
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Can I complete a Consumer Proposal or Personal Bankruptcy earlier than the legislated time limits
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Will I get to keep my Income Tax Refunds if I file a Consumer Proposal or Personal Bankruptcy
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Will my Consumer Proposal or Personal Bankruptcy deal with my Income Tax Debt
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What happens if I receive an Inheritances, Lottery Winnings and Other Windfalls, during my Consumer Proposal or Personal Bankruptcy
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How will filing a Consumer Proposal or Personal Bankruptcy effect my credit report
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Will a Consumer Proposal or Personal Bankruptcy release me from all types and forms of debts
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Are there any other fees or costs associated with filing a Consumer Proposal or Personal Bankruptcy
- Is a consumer proposal worth it?
How your proposal is affected by...
Income Tax Refunds
In a consumer proposal, income tax refunds are paid to you and not to your Licensed Insolvency Trustee or Administrator. CRA can still apply refunds for periods up to the date of filing to amounts that you owe in your personal bankruptcy to the federal or provincial governments including income tax debts, student loans, EI overpayments, etc. If there is still a refund due, it will be paid to you.
In personal bankruptcy, there are two income tax returns filed for the year in which you filed bankruptcy. The “pre-bankruptcy income tax return” covers from January 1st to the date of your personal bankruptcy filing. The “post-bankruptcy income tax return” covers the balance of the year to December 31st.
All income tax refunds that you are entitled to for the year in which you filed for personal bankruptcy (and for any prior years) are assets of the bankruptcy estate. CRA can apply any refunds for periods before the date of bankruptcy to amounts that you owe in your bankruptcy to the Federal or Provincial Governments including income tax debts, student loans, EI overpayments, etc. If there is a refund owing to you, it must be paid to the Licensed Insolvency Trustee for distribution to your creditors.
Income tax refunds for taxation years after the year in which you filed for personal bankruptcy are not assets of the bankruptcy estate.
Income Tax Debt
Inheritances, Winnings and Other Windfalls
Credit Report Implications
Debts that Survive Personal Bankruptcy or a Consumer Proposal
Fees
As noted previously, all personal bankruptcies and consumer proposals must be filed with a Licensed Insolvency Trustee (the “LIT”) who is licensed by the federal government and is highly regulated. One of the regulated matters is fees.
In personal bankruptcy, the LIT's fees are either fixed by a formula in the legislation or must be approved by the Court. In either case, the fees are paid from assets in the bankruptcy estate including surplus income payments, equity in assets sold by the LIT, or equity paid by you in retained assets.
In some cases, there will be no surplus income payments or other assets paid into the bankruptcy estate, and, in these cases, the LIT will require you to make a contribution to cover the costs of your bankruptcy. This contribution is usually made in monthly payments that are manageable for you.
In a consumer proposal, the LIT's fees are fixed by a formula in the legislation and are paid out of the funds that you pay into the proposal. So, the payment agreed upon in your proposal covers the settlement with your creditors and the fees of the LIT for administering the consumer proposal.
Powell Associates Ltd. is a Licensed Insolvency Trustee. We are experienced, hands-on insolvency practitioners who understand the personal impacts of significant financial stress;
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You won't be stuck in an assembly line process.
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You will expect and receive prompt responses and resolution of issues from our supportive and experienced team.
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We will review your debt solution options, including filing a consumer proposal or personal bankruptcy. If you are looking to pay off debt faster, we can help.
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We help Canadians with overwhelming debt get fresh financial starts.
Once you file a consumer proposal or personal bankruptcy, we deal directly with your creditors on your behalf. Your unsecured creditors are required to stop contacting you or continuing legal proceedings against you. Contact us for a free consultation.
We offer free consultations to review your financial situation and practical debt resolution options. Contact us to discuss your situation over the phone, a video chat, or in-person in Saint John, Moncton, Fredericton, Charlottetown, Dartmouth, or Miramichi.