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Deciding to Meet with a Licensed Insolvency Trustee in Toronto

licensed insolvency TrusteeIf you are having financial issues, it can be tough to know where to turn. Often, these situations feel very isolating. Many people do not feel comfortable discussing financial problems with friends, relatives or even their partners. There is still, wrongly, a lot of shyness associated with financial difficulties. However, you do not need to deal with these challenges alone. For many people, speaking with a insolvency trustee can help.

What is a Licensed Insolvency Trustee?

A licensed insolvency trustee is an individual who has received training and studied for many years in order to become licensed by and registered with the federal government. A licensed insolvency trustee can administer bankruptcy and consumer proposal processes.

However, a trustee can also provide you with important information that could help you with your financial future. Most trustees offer an initial consultation at no charge. During this consultation, the insolvency trustee will review your financial situation and provide you with information on the options that are available to you that could help you improve your financial position.

Differences between a Licensed Insolvency Trustee and Other Financial Professionals

One of the main differences between a licensed insolvency trustee and other types of financial professionals is that insolvency trustees provide you with information on all of the possible options available, not just the ones that they themselves offer. This is different from many other financial professionals who may only give you details on one or two options that they know best.

A licensed insolvency bankruptcy trustee is bound by a strict code of ethics that requires the trustee to give you details on all options.
In addition, the fees of a licensed insolvency trustee are set and regulated by the government. This gives you peace of mind when you are working with a trustee.

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Possible Options that May be Presented by a Licensed Insolvency Trustee

Each financial situation is different and, therefore, the options that are presented by the trustee will be different as well. However, some options that may be available to you include:

Debt Settlement

  • You may be able to speak with your creditors individually and negotiate with them. In some cases, creditors may agree to lower interest charges or give you additional time to pay back your debts.
  • However, not all creditors will be willing to negotiate and there is nothing that obligates them to do so. Those who do not negotiate could file legal action against you to collect their debts.

Debt Consolidation

  • In some situations, it might be possible for you to consolidate your loans in order to save money on interest. The way this usually works is that you take out a new loan with a lower interest rate than the overall interest rate on your existing loans. You then use this loan to repay your other loans, saving you interest charges.
  • Depending on your financial situation and credit history, it may be difficult for you to get a loan with a favourable interest rate.
  • This strategy could save you money on interest, but it will not reduce the overall amount owing.

Consumer Proposal

  • A consumer proposal is a legal process that is administered by a licensed insolvency trustee. With a consumer proposal, you make an offer to your unsecured creditors to pay them a portion of what is owed in monthly payments for a specific period of time. Once your proposal is complete, the remaining outstanding debt is eliminated.
  • If the majority of your unsecured creditors agree to the proposal, all are bound by its terms.
  • A consumer proposal is noted on your credit report and this note remains for three years after the proposal has been completed.

Bankruptcy

  • In general, bankruptcy is the last option considered, chosen after all other options have been exhausted. However, it does provide those who cannot pay their debts with an opportunity to eliminate most (if not all) of their debts and start fresh.
  • Personal bankruptcy is noted on your credit report for six years after you have been discharged, if it is your first time filing for bankruptcy.

Your bankruptcy trustee will provide you with the information that you need on all possible options. It will then be your choice as to how you wish to proceed.


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