main benefits of a consumer proposal
take into consideration several of the benefits of the consumer proposal versus
bankruptcy you keep your property legal actions against you relating to your
property and debts such as wage garnishments cannot continue
unlike informal debt negotiation the consumer proposal creates a form where
every one of your unsecured creditors must participate in for your debt
restructuring you do not require to file an assignment in bankruptcy exactly how
do I recognize if I have a financial problem if you are having difficulty
satisfying your debts or have actually quit paying them
you are probably insolvent another indication of insolvency is that if your
assets if liquidated will not bring in enough money to pay off your debts when
you are all stressed out over the money you owe for sure you will know that you
have financial problems how do I know if I qualify for either a consumer proposal
or bankruptcy any person that is insolvent and also was greater than one
thousand dollars is qualified to file either a consumer proposal or an
assignment in bankruptcy in Canada to file a consumer proposal you must hold
less than $250,000 other than for any secured
mortgages against your home if you owe more than $250,000 there is still a debt
settlement strategy we can discuss with you will I have to give up my assets as
soon as you file for bankruptcy you will certainly have to give up your
non-exempt property to the trustee these possessions will be marketed and sold in
a consumer proposal you will not be giving up your assets you are making an
offer to your creditors less than the total amount you owe what occurs to my
wages or salary in a consumer proposal nothing you receive it as normal in a
bankruptcy nothing happens to your income either however in a bankruptcy
unlike a consumer proposal your trustee at the outset has to determine if you
are required to make voluntary contributions to your bankruptcy case
based off of your income if so this is called a surplus income requirement also
you will have to file monthly statements of income and expense with the trustee
your surplus income requirement can change depending on if your income goes
up or down there is no such requirement in a consumer proposal Canada Revenue
Agency CRA has frozen my bank account and has launched a garnishee with my
employer on my earnings exactly how can I deal with that once you file a
consumer proposal or bankruptcy there is a stay of proceedings upon receiving
notice from the trustee CRA stops the garnished process and lifts the freeze
on your accounts will as still owe money after I declare bankruptcy or file a
consumer proposal perhaps because neither a consumer proposal nor
bankruptcy covers secured creditors mortgages car loans student loans if it
is less than seven years since you cease to be a full or part-time student court
fines or penalties alimony and support payments and debts arising from fraud
how much time will I be under the proceeding
duration of time in a bankruptcy will depend on whether this is an initial or
second or more bankruptcy whether you have to pay surplus income and if you’re
discharged as a post or not depending on your circumstances it can be anywhere
from nine months to many years in a consumer proposal you can take up to 60
months to pay the total amount you promised to pay payments are required
monthly will anyone find out that I have filed as soon as you file for bankruptcy
or a consumer proposal your trustee must file a notification with the office of
the superintendent of bankruptcy Canada OSB to start either process the OSB does
operate a public database showing the status of all files in either a consumer
proposal or bankruptcy your trustee must send a notice to all of your creditors
so they will know in a consumer proposal or a streamlined summary administration
bankruptcy the trustee does not place a legal notice in the local newspaper
advertising that you filed in an ordinary administration bankruptcy the
trustee must publish a notice generally it is only the OSB your trustee and your
creditors who are aware of your filing is my partner or spouse impacted your
partner / spouse will not be impacted unless he or she co-signed as a borrower
has guaranteed payment for any of your debts just how will my consumer proposal
or bankruptcy impact my existing divorce case consumer proposal in bankruptcy
filings do not conflict with the majority of the divorce procedures in a
bankruptcy the trustee will stand in the shoes of the bankrupt spouse if the
bankrupt spouse is entitled to an equalization payment that will come to
the trustee in a consumer proposal the trustee does not get involved at all in
any way I hope you enjoyed the video the IRA
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