Debt Stress:
Debt stress is an understated factor in our homes, communities, and work force.
It is an unpleasant feeling that one is unable to meet financial demands, afford the necessities of life, and have sufficient funds to make ends meet. The feeling normally includes the emotions of dread, anxiety, and fear, but may also include anger and frustration.
Financial problems can negatively affect your life in general. Specifically, debt stress can affect your mental and physical health; your social life; your performance at work; your family life; your marriage; ( A prominent psychologist claims debt stress is the leading cause of divorce. ) and particularly your children. The stress can also cause you to try and find solace through the consumption of alcohol, or the use of narcotics.
Some ways to deal with the consequences of debt stress are: Consult with a marriage or family counsellor; attend a substance abuse centre; and/or contact a Credit Counsellor and Trustee in Bankruptcy.
There is no shame in having financial problems. So don’t hesitate to seek professional help. When you eliminate your excessive debt, you’ll eliminate your stress. Then you can start your life anew.
Your options:
If you are in financial difficulty, you may have some questions. Such as what are your options are for paying off your debts? What solutions are best for you?
There are a variety of options to resolve your financial difficulties. The starting point is a free consultation to assess your situation. At this point answers will be provided which will serve to help you obtain a debt free life.
Option 1: Financing: Your options could be: Liquidation of existing assets including your vehicle; Funding from family or others; Second mortgage; Consolidation loan; Managing family spending; Budgeting.
Option 2: Consumer Proposals: In a Consumer Proposal you offer to pay your creditors a portion of your debt over a specified period of time, and the residual is forgiven. The amount of money you pay depends on your personal situation and the amount of money you make.
Option 3: Personal Bankruptcy: Bankruptcy will assist you to get a fresh financial start and be relieved of most of your debt. When you declare bankruptcy, a Trustee will deal directly with your creditors on your behalf.
Doing nothing is not an option: If you do not take action, your creditors will continue to demand money using collection agencies. They may even file a statement of claim in a court action. If you do not defend the claim, it could result in a court judgment allowing your creditors to collect their money by other means.
What is Bankruptcy?
One of the main purposes of Bankruptcy legislation is to afford the opportunity to a person, who is burdened with excessive debt, to free themselves and their family of the debt and stress, and start fresh - a new lease on life. To go into Bankruptcy it is necessary for a person to be insolvent. To be insolvent means to: Owe at least $1000. and not able to meet your debts when they are due to be paid.
Bankruptcy is a simple process:
Generally in a first time personal Bankruptcy, once you file, all you are required to do is:
- Attend two counseling sessions.
- Report any changes in your financial, family, and residential status.
- Pay a monthly requirement.
- File an income and expense report.
Do I need a lawyer?
If you’re experiencing excessive debt, and are considering filing a proposal or declaring Bankruptcy...you don’t need a lawyer.
A lawyer will explain that according to "The Canadian Bankruptcy and Insolvency Act" only a Trustee can legally initiate and process Proposals or Bankruptcy proceedings. However, a Trustee will work with counsel on more complex personal restructuring.
Working directly with a Trustee in Bankruptcy will save you money by providing a free consultation to determine if, when, and how you should proceed. Plus, you receive proper, concentrated attention throughout your entire proceedings. A Trustee will deal with your creditors on your behalf. You could end up paying only a portion of the money you owe, with one low affordable monthly payment, no interest. A Trustee will explain your options other than Bankruptcy, such as consolidation loans; re-mortgaging your house; loans from family or friends; budgeting; Consumer Proposals; Sale of your vehicle; or liquidation of existing assets.
Call Doyle Salewski direct ... We help people every day.
Who will know?
The Bankruptcy and Insolvency Act; (BIA) sets out whether a bankruptcy notice has to be published in the newspaper. For the vast majority of bankruptcies, a notice will NOT be published. Usually, very few people are aware of a consumer bankruptcy. Only creditors and their agencies are advised by mail. Doyle Salewski Inc. will only discuss matters concerning a client with that client, creditors, counsel, and officials sanctioned by the B.I.A. Family members and friends will not have access to information unless permission has been granted by the client.
Income tax, GST, & PST liabilities
We can help people who have tax liabilities far in excess than they can afford to pay, such as owing tax on their income, or because of a statutory liability as a director of a corporation.
We can prepare a customized proposal to creditors and seek to reduce the overall level of debt, and set a repayment schedule aligned with family and business/practice requirements over a two to five year period.
What about my wages during bankruptcy?
There are standards supplied to the Trustee by the Superintendent of Bankruptcy which instructs the trustee to collect funds, for the benefit of creditors, from any earnings above what is reasonable for the number of people in the family and the bankrupt’s personal situation. These standards are known as surplus income standards and in some cases may result in you making a mandatory payment to the Trustee.
What do you do if you think that C.R.A. (The Canadian Revenue Agency) is going to register a secured position against you?
If the debt is large enough, you should see a trustee immediately. A search of the Personal Property Security Registry or land titles will reveal whether C.R.A has filed a secured claim against you. You may want to consider filing a Proposal, or filing for Bankruptcy under the Bankruptcy and Insolvency Act prior to C.R.A. taking such action.
What is counselling and do I have to take it?
You must take counselling in order to be eligible for a discharge from bankruptcy and to complete your Consumer Proposal. The counselling can be one on one with yourself and your Trustee firm. The first counselling session must be held between 10 and 60 days following bankruptcy. The second counseling session must be held no later than 210 days following the date of Bankruptcy. Counselling sessions cover areas such as: Money management skills/budgeting; Enhancing clients well being; Improving money management skills; Goal setting; Implementing lifestyle changes; How to prevent a relapse; Securing family co-operation; Examining what brought about financial distress.
When is my Bankruptcy over?
For those people who have not been bankrupt before, an automatic discharge will usually take place after nine months if there is no surplus income and the creditors, Superintendent of Bankruptcy or Trustee have not opposed your discharge, you have submitted monthly income and expense reports, and have participated in two counseling sessions. It is rare that creditors object and the matter goes to mediation or is heard before a Registrar or a Judge. The discharge is usually granted where the bankrupt is only earning sufficient income to keep himself and his dependents reasonably provided for. It is the discharge of the bankrupt, with minor exceptions, that cancels the bankrupt’s debts.
