Is bankruptcy the best way to shed the debt?
Bankruptcy is a legal proceeding that resolves all of your unsecured debts. It covers credit card balances, taxes owed to the Canada Revenue Agency, 407 ETR bills, loans with private lenders, car loans, payday loans, overdue utilities, cellphone bills, and any other unsecured debts.
Secured borrowing, such as your mortgage, a home equity line of credit, or any loans secured by your home equity, is not retired through a bankruptcy.
Determining whether bankruptcy is the best way for you to shed the debt is not something you can decide alone. It’s best to work with a licensed insolvency professional like Goldhar to review your entire financial situation.
Only a licensed Trustee in Bankruptcy, like Goldhar, can file your assignment in bankruptcy.
Watch Trustee Richard Goldhar discuss bankruptcy in brief.
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Heavy debt loads don’t always mean you’re bankrupt.
You are eligible to file for bankruptcy only if you are truly insolvent to the point that the total of all your unsecured debts exceeds the combined value of all your assets. Your cash flow may not be enough on a month to month basis to keep up with the cost of servicing your debts. However, if the equity built up in your home, or the value of your unincorporated business, or the tools and equipment you use to run your business, or other personal effects such as artwork, jewellery, or valuable collections add up to more than the sum of your unsecured debts, technically you are not bankrupt. In this situation, a consumer proposal may permit you to settle your debts for cents on the dollar, with payment made to your creditors over a period of up to 60 months. Read more about consumer proposals here.
As a licensed Trustee in Bankruptcy, Goldhar is qualified to review your financial situation and advise you on the debt relief options best suited to your situation.
How do you know if bankruptcy is the right choice for you?
Goldhar will help you assess if bankruptcy is the most desirable way, or the only way, for you to realistically discharge your debts.
If you are truly unable to pay your bills and make debt payments when they are due, and you cannot afford to make an offer to your creditors through a consumer proposal or Division 1 proposal, or your proposal has been rejected by your creditors, bankruptcy may be the only viable option to discharge your debts.
Bankruptcy is a significant financial decision, with consequences that will effect your credit rating and may limit your ability to qualify for credit cards, loans and mortgages. However, when your debt load consumes all your cash flow and it is apparent that you are unlikely to ever pay off your debts, bankruptcy is a responsible way to clear away your debt and make a fresh financial start.
There is no shame in filing for bankruptcy. No one needs to know. Your family and friends, your employer and your co-workers will only see your smile – a smile that comes from knowing your finances are in balance and you’re back on track to build a solid financial future.
To make an assignment in bankruptcy, you work with Goldhar as your Trustee in Bankruptcy to determine what assets you have that can be liquidated as payment to your creditors, and how much of your income you will be required to pay monthly to your creditors until you are discharged. Many people who file for bankruptcy have no assets to be liquidated, and make little or no monthly payments to creditors.
Once you make your assignment in bankruptcy, all garnishments, executions, and legal actions by creditors are stopped.
In a first time bankruptcy, you will most likely be discharged in 9 months or 21 months, depending on the total of your debts. In second or third bankruptcies, the time before discharge will be longer.
Will you lose your home in a bankruptcy?
In most cases your family home is not required to be sold to pay your creditors. Your equity in your home, however, is considered an asset and you may be required to seek financing equal to the equity and then pay this amount to the creditors. Alternatively, Goldhar may be able to accept payout of the equity amount over time. In the event that only one spouse(or homeowner) goes bankrupt, Goldhar will, in most cases, permit the other spouse or homeowner(s) to buy out the bankrupt’s equity share.
- the amount of your settlement is determined by the Trustee based upon the value of your assets and your income
- you are required to fulfill certain obligations to the Trustee, including a monthly reporting of your income and expenditures
- if you have income in excess of the thresholds set by the Superintendent of Bankruptcy, up to 50% of your deemed “surplus” is payable to the Trustee until you are discharged from bankruptcy
- items such as household furniture, clothing and your personal effects are exempt in most cases
- typically you may keep a car/vehicle, the savings in an RRSP (less any contributions made in the last 12 months), your personal computer, and cellphone, etc.
- the debts of a sole proprietorship business would be included in your personal bankruptcy
- the debts of an incorporated business will be addressed if/when the corporation files a Division 1 proposal or bankruptcy
- Directors of a corporation may be assessed personally for the corporation’s tax arrears related to HST and to the employee portions for CPP/EI and income tax deductions at source.
- you may not hold the position of Director of a corporation while you are personally an undischarged bankrupt
For more detailed information about the duties of a bankrupt, download Goldhar’s ebook real rules of debt.
A Trustee in Bankruptcy is an officer of the court and is regulated by the Office of the Superintendent of Bankruptcy (OSB). In this role, the Trustee is required to recover as much as possible for your creditors.
Goldhar balances this duty to the creditors with our professional obligation to assist you to achieve a fair settlement of your debt .
The best way to choose a Bankruptcy Trustee
Most people go to the internet to find a bankruptcy trustee. The internet is fast, it’s always there, and it’s a private way to search for a service that most people don’t like to discuss with friends. Can you really see yourself sitting at the Starbucks asking your friends who to call to fix your debt problems? Life’s not like that.
When you can’t ask friends, and you don’t want your banker or mortgage broker to know you’re in over your head, the internet is where you’re most likely to go for help.
Without a doubt, the internet is a treasure trove of resources. But it’s important to remember that the internet is advertising in an online medium. Everything sounds simple in a google ad, or on the home page of a website. Just give us all your financial details, the website promises, and we’ll tell you if you qualify for a consumer proposal or a bankruptcy.
Let’s think about that. Do you really want to give all your personal and private financial information to a website? Do you really know who looks at the information?
Just as filing for bankruptcy is one of the most important financial decisions of your life, choosing a Trustee in Bankruptcy to trust with your financial future is not a decision to be made online. You owe it to yourself and your family to meet face to face with a Trustee before you disclose your personal details.
This is the reason Goldhar always asks you to call to arrange a personal financial review. (Call 1-855-541-5114 to book a time.) We don’t want to see your balance sheet first. We want to meet with you, in one of our locations across southern Ontario, or at a location of your choosing ( your home or office, for instance) so that we can better understand you, your needs, and the full scope of your financial situation. This is the only way we can advise you on the suitability of a bankruptcy, or a consumer proposal as a solution to your debt trouble.
Yes, Goldhar has a website. We think it’s friendly and informative. We hope you do, too, and you’re always welcome to share comments on what you think would make our website better. Our website, however, is not our service. Our website exists to make it easier for you to find out how to contact Goldhar, and know what questions to ask when you meet with a Goldhar trustee or debt specialist.
Goldhar can come to you anywhere across southern Ontario.
For fast, friendly debt relief and professional, licensed debt solutions, talk to Goldhar. Or call 1-855-541-5114.
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