Melisa: Co-signing Loan Dangers & Bankruptcy in Mississauga

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Bankruptcy Mississauga – Family Stress

The following Mississauga bankruptcy case history is an excellent example of some of the problems that can be caused by co-signing loans.

‘Melisa’ (not her real name) was a hard-working, bright woman in her early 20s. Ambitious to have a successful career, she had returned to school and taken a two-year business course. Unable to get student loans to finance her education, she had taken out a student line of credit with her bank – which her mother co-signed.

Although she had done extremely well with her studies, when she graduated, she was unable to find a job in her new field for over a year. She was able to get some temporary work while looking for full-time employment, but it was not enough to enable her to keep her payments to the bank up to date.

Collection Calls & Possible Garnisheed Wages

Shortly after she found a job in her new field, while she was still in the 3-month probationary period, her bank began to make collection calls, threatening to place a garnishee on her wages. In addition, her bank began to call her mother ‘Joanne’ (not her real name) , who as the co-signer, was also responsible for repaying the debt.

Melisa was panic stricken, she realized that her employer would take a very dim view of a garnishee, and it could result in her being let go before her 3-month probationary period was up. She also was concerned about the damage this stressful situation was taking on her relationship with her mother and her mother’s fragile health.

Taking the next Step

On the advice of a friend, Melisa set up an appointment with David Sklar & Associates at their Mississauga office – to see what could be done.

During her initial meeting with Rhoda Lewis, Estate Manager – Melisa laid out her finances:

  • Income: $2000/month
  • No assets beyond those exempted from bankruptcy by the Ontario Execution Act
  • Total Credit Card Debt $1,200
  • Co-signed Loan – $8,000

After Rhoda and the Trustee explained all of her options to her, Melisa decided to file for bankruptcy rather than file a consumer proposal – as she was concerned about her ability to pay a proposal if she was unable to keep her new job.

Since Melisa did not have any Surplus Income, as per the guidelines from the Superintendent of Bankruptcy, she qualified for a 9 month bankruptcy.

Before filing for a bankruptcy, Rhoda recommended Melisa open a bank account at a different bank, and have her paycheques deposited to the new bank account. Since Melisa did all of her banking with the bank she had her line of credit with, it would be prudent to start using a different bank.

Once David Sklar & Associates filed her bankruptcy, Melisa’s bank had to stop all collection efforts against her.

Fallout for Melisa’s Mother

After Melisa filed for bankruptcy, her bank continued to aggressively pursue her mother, Joanne, for repayment of the line of credit loan. As a co-signer, Joanne was 100% responsible for repaying the entire loan.

Unfortunately, Joanne’s financial situation was already precarious due to a recent illness, and she was experiencing difficulty meeting her own outstanding debts. With no other viable option, Joanne filed a Consumer Proposal – which stopped the collection efforts of the bank, and eased her financial stress.

Aftermath

Although the relationship between Melisa and her mother improved with time, the stress they both experienced has not been forgotten.

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

Take Your First Step Towards A Debt Free Life

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I was a little nervous going into my consumer proposal with David Sklar & Associates as I had a horrible experience attempting to file with a different group.Following the first correspondence, I immediately felt much more relaxed and confident in my decision.Beatriz was incredible! I feel so lucky to have had her working with me.She was friendly and kind, professional, patient, considerate, and caring. I felt no judgment in anyway. Honestly, speaking with her regarding my debt felt like I was speaking with a family member – just very easy to discuss how I ended up in my financial situation and being met with understanding, no judgment.Mark was also very kind and made sure that I understood what was discussed and was open to going over it again if needed prior to signing.David Sklar & Associates is the team you want handling and assisting you with your debt. I have only positive things to say about them and will 100% recommend them to anyone if the situation ever arises.
ally.
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Helped me with filing for bankruptcy and getting a fresh start and made the whole process seamless and easy.
Sameer Kamal
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I would like to say "Thank you very much" for David Sklar team that handled my case smoothly and without any issues! I am glad that I ve got consultation by Jerry Janiec. He explained me all process in details and told me right away what options I do have to resolve financial difficulties. I ve proceed with consumer Proposal option and entire process was very smooth. Jerry took care of my case and gave me personal recommendations for future! Thank you very much Jerry and Hernee for your help and really take care of your clients!
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Very knowledgeable, helpful and fast service
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I am so delighted to have found this company. They are the best. Everyone in the office is very nice never to busy to assist you. Thank you David Sklar and Shirley and associates for being you. 😊🌺😊
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Trina was amazing and quick. No judgement was made and they all made me feel I made the right decision. Would highly recommend them
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Trina was very easy to work with. Any questions I had were answered promptly. What seemed like a complicated process was explained in a clear manner that wasn't at all intimidating. It made for a more comfortable experience during a turbulent time.
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Jackie is very professional...I would recommend David Sklar to anybody especially knowing how understanding they are.
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I had Shirley and Kim take care of my finances. From the very first moment I spoke with Shirley I could sense how caring, professional and patient she was. She was also very understanding with my lack of financial knowledge and never made me feel dumb as some other companies have.Her and Kim were always very quick to respond to emails, always available if I called and answered my abundance of questions in such detail that I now believe I have a thorough understanding of how finances work. I am hopeful about my fresh financial start and very grateful I had the privilege of meeting and working with these two beautiful women.I also spoke briefly with Richard over zoom and he to was extremely friendly, patient and made sure I was well taken care of.I could not recommend David Sklar and Associates more. Thank you again.
Shayleen Muzi
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Good professional team! Jennifer is the best, helped me through everything and answered all my questions. Made the process easy! Would recommend Jennifer and the team at David Skylar.
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