Carlos & Joana: Seniors Declaring Bankruptcy

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Relief & Hope for Seniors  – Filing Bankruptcy in Ajax – Carlos & Joana

When they were both in their 50s, Carlos and Joana (not their real names) immigrated to the Ajax / Toronto area. Originally from Brazil, they had worked hard to help their children immigrate to Canada, and eventually followed them.

Although Carlos was an excellent craftsman, he had difficulty learning English and was unable to get the type of employment he was used to. However, he was able to find work as a labourer in a related field.

Eventually, they found a small home in Ajax that was close to their children and had a backyard that was large enough for a good sized garden and Carlos’ workshop.

At age 67, health issues forced Carlos to retire from his job.

Two years after retirement, Carlos discovered that he had to replace their old car. Unfortunately, without realizing it, he signed a contract for a new car at monthly payments of over $400 per month. When he tried to explain the situation with the dealership, he was told he had no option and that he had to keep the car.

Uncertain of what he should do, Carlos finally spoke with his oldest son (an accountant). His son was unable to get anywhere with the dealership or the leasing company and had to convince his father to speak with a bankruptcy trustee. With their permission, he booked his parents an appointment with David Sklar & Associates.

Their appointment was set up with Veronica Horta, an Estate Administrator and Certified Insolvency Counsellor who in addition to being knowledgeable, experienced and caring – speaks fluent Portuguese.

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During their first meeting with Veronica, Carlos and Joana were understandably nervous, however as Veronica reviewed their finances and explained their options, they realized that there was still hope.

One of the things that was discussed was credit. In Brazil, they had not had any exposure to credit cards and as a result, did not fully understand how they worked. This was in large part why they had $59,000 in credit card debt from a failed business venture.

A review of their finances showed the following:

  • Non-exempt Assets: $12,000 Equity in home
  • Mortgage: $245,000 (monthly mortgage payment $800)
  • Credit Card Debt (5 cards): $59,000
  • Monthly Car Lease Payments: $420
  • Monthly Net Income: $2,200/month

After discussing all of their options with Veronica and the trustee, they chose to file for bankruptcy.

Carlos and Joana, were able to keep their home, as their children raised $12,000 to put into their bankruptcy estate, to replace the $12,000 of home equity. Their mortgage was a secured loan, and as such was not part of the bankruptcy.

The lease car was returned to the leasing company.

Since Carlos and Joana did not have any surplus income, their bankruptcy lasted for 9 months. During that time they submitted monthly budgets, attended credit counselling and made monthly payments of $200 into their bankruptcy estate for disbursal to their creditors.

At the end of their bankruptcy they were released from their credit card and car lease debts.

Although they wish they had not had to use bankruptcy, both Carlos and Joana were pleased that they were able to keep their home and get a fresh start.

To protect our clients’ privacy, aspects of this case study have been altered

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