Can I really be “debt free”?

“Debt free” is simply an advertising term used by many firms, Licensed Insolvency Trustees and otherwise. For most of us, we don’t want to be “debt free”. Paying on a mortgage, paying on a car loan, are good positive forms of debt. Building and having a good credit report helps us accumulate the assets most of us want in life. That said, too much debt, collection agency phone calls, income tax arrears cause stress in our life that requires most of us to get help. It is that help a Licensed Insolvency Trustee can provide.

Do I really need to file bankruptcy?

The decision to file a bankruptcy is a very personal decision. If you are not able to pay all your bills on time as required by your creditors, you should get advice from a Licensed Insolvency Trustee. Make sure if you go to a company that advertises themselves as Licensed Insolvency Trustees that you are actually talking to a Licensed Insolvency Trustee, otherwise you are simply talking to a salesperson. Whether you need to file and what you may best benefit from filing, a bankruptcy or a proposal is based on many different factors, and what is right for you is not necessarily right for anyone else.

What is a Proposal?

A Proposal is an offer made by an individual or a Company to their creditors to repay all or part of their debt, without interest on terms agreed upon as part of the Proposal.

How much does filing bankruptcy cost?

Although a simple question, there is no simple answer. The cost of bankruptcy depends on your income, the realizable value of your assets, whether or not you have previously been bankrupt and whether one of your creditors chooses to participate in the bankruptcy. The minimum cost of a bankruptcy is $1,875.00 payable on terms as agreed upon.

Are income tax debts included in bankruptcy?

Yes. Pursuant to Canadian bankruptcy law income tax debt is part of the debts included and discharged by bankruptcy.

Can a business go bankrupt?

Yes.

Can I get credit after filing bankruptcy or a Proposal?

Yes.

Do I have to wait 7 years to after filing a bankruptcy or a Proposal to get credit?

No. You can apply for credit as soon as 60 days after filing a Proposal, and in the event of a bankruptcy, you can apply for credit as soon as you are discharged from the bankruptcy.

Am I freed from my debt as soon as I file a bankruptcy or a proposal?

No. The filing of a bankruptcy or proposal stops creditors taking or continuing legal action to collect the debt, so legal cases are stopped and garnishments are lifted. However, the individual is not freed of the debt until they have completed their proposal, or have been discharged from a bankruptcy.

Can I keep my house or my car if I file a bankruptcy or a proposal?

Yes. In both cases, you are usually able to keep your assets. There are two conditions, 1) If you have a mortgage or a car loan, the lender has to agree to allow you to keep the asset; 2) If there is any equity or value in the asset after deducting the value of the mortgage or car loan, then you may have to buy back a portion of that equity as part f the bankruptcy or proposal process.