Consolidating Debt Through a Consumer Proposal or Bankruptcy in Ingersoll
Dealing with Debt and Debt Issues
Unfortunately, a large percentage of people in Canada deal with debt issues and have trouble handling their debt. Despite this being true, many people do not want to talk about debt, handling debt or resolving debt issues. Many people feel like they have “failed” if they end up in debt and they do not want to share these details with anyone. This secrecy surrounding debt often prevents people from finding out information that could help them.
If you are faced with a level of debt that you are unable to control or pay down, you might feel like there are no options available to you. However, this isn’t the case. Depending on your financial situation, there could be a number of different available options. One way to find out what you can do to reduce or eliminate your debt is to speak with a licensed trustee in bankruptcy.
What is a Licensed Insolvency Trustee?
Many people are scared off by the name, however, a licensed insolvency trustee does not only work with bankruptcy cases. In addition, meeting with a trustee in bankruptcy does not mean that you will end up filing for bankruptcy.
Trustees are trained and licensed by the federal government. They are able to administer bankruptcy and consumer proposal processes, but they can also assist you in understanding the debt relief options available to you. Trustees are bound by a strict code of ethics that requires them to explain all potential options, not just those that they can assist you with. This is different from other financial professionals who may only have experience in a few different solutions.
In addition, most bankruptcy trustees offer free consultations and all trustee administrative fees are set and regulated by the federal government.
When you meet with a trustee, he or she will review your financial situation and provide you with details on the different available options. The trustee will never pressure you to choose one option over another. This decision is always yours to make. A trustee will explain the options to you and provide you with the information that you need to make an informed choice for your financial future.
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Then Bankruptcy Process
One option that you may be presented with is bankruptcy. The bankruptcy process is designed to give those who are unable to pay their debts as they become due a process that allows them to eliminate most (if not all) of these debts and start fresh.
Contrary to what many people believe, the goal of bankruptcy is not to punish you or to leave you in a situation where you have nothing left.
When you meet with your trustee, he or she will let you know which assets are exempt from the bankruptcy process. Each province in Canada maintains lists of items that are deemed necessary to live a basic lifestyle as well as the value of these items. These necessary items are deemed exempt from bankruptcy, meaning that you will not lose them when you file.
If you decide to file for bankruptcy, your trustee will ensure that you are able to keep all exempt items. He or she will also help you complete and file the required paperwork and inform your creditors of your situation.
The Consumer Proposal Process
A consumer proposal is another legal process that can help those who are looking for debt relief. In a consumer proposal, you make an offer to your unsecured creditors to repay them on terms that you can afford. In most consumer proposals, a person will offer to pay a portion of the debt owing over a specific period of time in monthly payments. Once the payments have been made and the terms of the proposal are complete, the remaining outstanding debt is forgiven.
A consumer proposal allows you to repay as much of your debt as you can afford without having to deal with paying the full debt owing. If you decide to proceed with a proposal, your trustee will review your financial situation and determine what a fair offer to your creditors will be. The trustee will then send this offer to your unsecured creditors who will vote on whether or not they will accept it. If the majority of the creditors vote to accept your proposal, then all are bound by its terms.
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