Melisa: Co-signing Loan Dangers & Bankruptcy in Mississauga

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 cannot emphasize enough how thankful I am for Jackie Stanley's help with filing for bankruptcy.All of us dread being put in this position and we have a million questions about the process but trust me Jackie makes it so easy for you that you don't have to do anything yourself!She is very kind and friendly and puts you at ease right away. She emphasizes with you and let's you know it's not your fault.Most importantly when you leave that first meeting you will not believe the load that is taken off your shoulders. You can actually feel it!You are a godsend Jackie and I can't thank you enough!!I hope you are highly valued there as much as you are by me!
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18:45 05 Dec 21
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I have had the privilege of being supported by Jackie at David Sklar Associate. She was very helpful, very professional and very friendly. She gave me the help I need. Thank you Jackie for your help.
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Jackie at Daivid Sklar and Associates is such a pleasure to work with. She explained everything in great detail and is always there when I have a question or concern. She really cares about her clients.
Steve Medica
09:33 10 Nov 21
I filed a proposal with another group, which came in as a referral from one of my brokers. My experience went from ok to bad to worse, due to lack of communication and education on the process I was to embark on. I worked with Cori Naron in the past, and I came to her now for help on literally doing the work that the other group should have done. Cori stepped in, educated me, advised on rights, responsibilities, how the process works and what potential outcomes may happen. I do not have enough words of recognition and gratitude for what she did - she alleviated stress, anxiety, dead-end thoughts and she made me live again. Congrats to DSklar for hiring her and retaining such talent.
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18:45 25 Oct 21
Very professional service. Before contacting David Sklar & Associates i contacted bunch of other firms they seemed fishy. After I spoke with Jason Sklar at Hamilton Office I discovered professionalism with hope. I was explained every step of my situation with solution professionally. Thank you David Sklar & Associates.
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I met David a few months ago and i am glad I did. He has helped me all the way through my bankruptcy with good advice and explained every step of the process. David is a very down to earth and very professional. Anytime I've had a question I was able to reach out to David by phone or email and he always got back to me. If your struggling with your bills and need a way to get help, I strongly recommend David Sklar &Associates to help you. My experience with them on 1-5scale would be a 5;; My life is so much better now, thanks to David Sklar.
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I have had the privilege of being supported by Jackie S, at David Sklar n Associate.She was helpful, professional and friendly. I was able to get the help I needed at a difficult time in my life. I would recommend anyone who needs support with working out their debts to ask for Jackie, she will be waiting to assist however she can to help you through your debts. She works with a team who is always ready and responsive.Thank you Jackie and your team:)
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