Goldhar answers commonly asked questions about debt trouble and insolvency proceedings.
Can my employer fire me for filing a consumer proposal?
The short answer is no. The BIA ( Bankruptcy and Insolvency Act) protects you from any punitive action by your employer related to the fact that you filed a consumer proposal. (See S.66.36 : “No employer shall dismiss, suspend, lay off or otherwise discipline a consumer debtor on the sole ground that a consumer proposal has been filed in respect of that consumer debtor.”) Similarly, your cannot be fired simply because you filed for bankruptcy.
Your employer does not even need to know you have filed a consumer proposal or bankruptcy, unless you work in a field where disclosure of your personal financial is a mandatory requirement. If there is a wage garnishment against you, your employer will be notified that the garnishment is no longer in effect. No details of your proposal or bankruptcy will be disclosed.
Your privacy is completely protected by the BIA, and by the licesnsed insolvency trustee who files and administers your consumer proposal or bankruptcy.
Don’t be embarrassed! A consumer proposal or bankruptcy may be a smart financial decision when it relieves you from the burden of unmanageable debts. Your Goldhar shed the debt® professional can explain the opportunities of a consumer proposal or bankruptcy and help you map out a plan to reach your financial goals and live debt free. Get fast friendly debt relief. Call Goldhar now at 1-855-541-5114 or fast dial (#3328) on your mobile phone.
Should I file my income tax return this year if I still owe tax from prior years?
Tax debt, especially for small business owners and the self-employed, can spiral out of control all too quickly. Not filing your tax returns, or filing late, only makes the problem worse.
If you fall behind on your tax payments, especially HST and employee deductions, for even a few months, the Canada Revenue Agency will add heavy interest charges to your balances, and will take aggressive action to collect on the balances. This action may include registration of liens against your personal property, garnishment of your bank account(s), and even third party demands to pay to your clientele. It’s hard to catch up on past tax debts when current remittances also become due. The problem gets even worse when you don’t file your tax returns on time. The Canada Revenue Agency will assess a late filing penalty for each late return, and the penalty gets higher for multiple late filings.
If you still owe tax from previous years, and you don’t think you can catch up and stay current with this year’s taxes, it’s time to seek professional assistance.
A consumer proposal or bankruptcy permits you to settle with the Canada Revenue Agency for a fraction of your total tax owing. In many cases this settlement will relieve all late filing penalties and interests, and much of the tax principal. This permits you to get caught up and approach your ongoing tax obligations with a clean slate.
As a licensed insolvency trustee and administrator of consumer proposals, Goldhar can review your tax situation, advise you on strategies to shed the debt, and negotiate a settlement with the Taxman.
Bottom line: Nothing excuses you from your obligation to file your tax returns each year as and when required. But if you can’t pay the tax, talk to Goldhar before the Canada Revenue Agency gets aggressive.
Call Goldhar at 1-855-541-5114 for a free personal consultation. Or fast dial #debt (#3328) on your mobile phone.
How do I know my financial trouble is serious enough to need insolvency help?
When was the last time you could pay your bills – all of them – on time? If the answer is “not for a long time”, or “I can’t remember”, then it may be time to take a good hard look at your financial situation. When a cash flow shortfall becomes chronic, you may never get ahead of all the bills without professional assistance. A personalized debt review with Goldhar is free and without obligation. We may be able to offer some suggestions to get your finances back in balance that don’t involve insolvency proceedings. Whatever your situation, Goldhar will give you honest and helpful answers. So don’t be shy. Call to arrange your free personalized debt situation review with Goldhar.
Is bankruptcy the only way to get out of debt?
No. You can make informal arrangements with creditors on your own. But most likely that will not stop your balances from growing exponentially as the interest adds up. You can work with a credit counselling agency or a debt settlement firm. They will contact creditors and try to arrange affordable monthly payments. But they have no legal authority to prevent creditors from calling you, or coming after your wages, your bank account, or your property. Only a licensed insolvency trustee can legally protect you and your assets from creditors, and stop the calls and the garnishments.
Do I lose everything if I go bankrupt?
First off, you may not need to go bankrupt. A consumer proposal may be a better solution to your financial trouble. But if Goldhar advises you to file an assignment in bankruptcy, we will review with you the details of what assets will be assigned to Goldhar as your trustee. Assets traditionally do not include such items as household furniture, clothing and your personal effects. No one will come to your house and count every spoon, cup and kettle in the kitchen. In most cases you may keep your car or truck, the savings in your RRSP, your computer, your television, your cellphone, and other personal assets.
Equity in your home will be considered an asset. You may arrange to buy that equity back from the trustee over time, or with a lump sum payment. If only one spouse goes bankrupt, the trustee usually permits the other spouse to buy out the bankrupt spouse’s share of the home equity. Talk to Goldhar about the effects of bankruptcy on your personal situation.
Can I run a business if I go bankrupt?
While you are an undischarged bankrupt, you cannot be a director of a corporation until you are discharged. But you can run your business, or even start a new one, if the new business is a sole proprietorship. If it is important that you preserve a corporate directorship, review your situation in detail with a Goldhar licensed insolvency trustee for a thorough discussion of insolvency proceedings and your specific circumstances.
Once I go bankrupt, what happens to my debt?
Bankruptcy relieves you from the responsibility of all your unsecured debts. If a lien has been registered against property, such as your house or land, bankruptcy may not erase that debt. That’s why it is so important to talk to Goldhar before your debt troubles get too serious. Secured debts, like your mortgage or your car loan are NOT discharged by bankruptcy. Certain obligations cannot be discharged by bankruptcy, including: court-ordered alimony and child support payments; student loans (if you stopped being a student less than seven years ago); court-ordered fines or penalties; and debts arising from fraud. Bankruptcy will not cancel the liability of anyone who guaranteed or co-signed a loan with you. Tax debt owing to the Canada Revenue Agency may be discharged through bankruptcy.
Will my neighbours, family and friends know?
If you file for insolvency proceedings there will be no visits to your home, no notices posted on the door. The neighbours have no reason to know you are working with Goldhar. But if you know your neighbour is having financial difficulties, referring him/her to Goldhar could be a genuinely neighbourly act.
Can my debts be held against my spouse or my children?
In most cases your spouse and children are not liable for your unsecured debts. Credit cards can be complicated. If the card is in your name only, and your spouse does not have a secondary card that he/she uses, your spouse will not be liable for the debt. If your spouse does use the secondary card, or the credit card is in both your names, your spouse also could be liable. Talk to a Goldhar licensed insolvency trustee about your situation.
Does my employer need to know I have filed a consumer proposal or bankruptcy?
Normally there is no need for Goldhar to contact your employer – unless your wages are garnished, in which case our contact will be of the best kind – to advise of the removal of the garnishment.
What do I say to my family?
Your Goldhar shed the debt professional can help you work out what to say to the children at home. Believe us when we say that the kids will only notice your smile. And they will be happier to see you bounce back to life. So will your parents, your community group, your friends, your brothers and sisters…
Will bankruptcy or consumer proposal wipe out my student loans?
For the first seven years after you cease to be a student, student loans are NOT discharged by bankruptcy. After seven years you can include student loans with your other unsecured debts in a bankruptcy or consumer proposal. Goldhar can help you understand how these rules apply to your situation.
Does bankruptcy affect what or how I am paid wages?
When you file a consumer proposal or bankruptcy, you are responsible for making certain payments to the licensed insolvency trustee. Your wages are not redirected to the trustee, and your creditors can no longer garnish your wages. In a bankruptcy, you are required to report your monthly earnings to the trustee until you are discharged. Goldhar will help you understand your responsibilities in more detail.
Does bankruptcy or a consumer proposal stop the Canada Revenue Agency from coming after me ?
Yes. Filing a bankruptcy or a consumer proposal stops CRA from taking collection action against you and releases any wage or bank garnishments. In most cases your proposal or bankruptcy will settle your CRA debt. Goldhar will help you understand the rare exceptions to this rule.
Does bankruptcy or a consumer proposal relieve my CRA debt?
Yes. Filing a bankruptcy or a consumer proposal settles your debt with the Canada Revenue Agency. However, if CRA has registered a lien against property, the lien will not be discharged and eventually CRA will be able to assert its right to sell your asset. This is an important reason to talk to Goldhar sooner than later. Once you file a consumer proposal or bankruptcy,the CRA is barred from registering a property lien.
Will I ever have a credit card again?
There is credit after insolvency. Your credit rating is lowered by your consumer proposal or assignment in bankruptcy. But you can rebuild your credit rating over time, and the fact that your proposal or bankruptcy has settled your unsecured debt actually assists in improving your credit rating. During this time of financial re-building, you can apply for a secured credit card. You secure the credit card with a cash deposit that equals the credit limit on the card. The card issuer keeps that money as security against any balances on the card. Payment on time of your monthly minimum will rebuild your credit rating over time. Ultimately you will be able to apply for unsecured credit cards.
Does Goldhar stop collection calls?
Yes. Once you file a consumer proposal or bankruptcy with Goldhar, your creditors are advised and the collection calls and letters must stop. You should report any violation of this immediately to Goldhar. Creditors who continue to harrass you after your insolvency proceeding has been filed may be prosecuted.
Do I keep my credit cards after my consumer proposal or bankruptcy?
When you file a consumer proposal or bankruptcy, all of your unsecured debt is included. Any credit cards with balances will be part of the insolvency proceeding and the account will be closed. In some cases, if you have a credit card with zero balance, you may be permitted to keep it. Goldhar will advise you of what you may keep.