Yvette & Georges: Avoiding a Second Bankruptcy in Toronto

Case History: Avoiding a Second Bankruptcy

‘Yvette & Georges’ (not their real names) filed and successfully completed bankruptcy in Quebec in 1992. In 1995, they moved to Toronto where they were able to find jobs that matched their professional training.

Through careful planning and effort, they rebuilt their credit rating and established a good life for themselves and their three children. However, their lifestyle was dependent upon them both working.

In 2009, Georges lost his job due to downsizing. Several months after losing his job, Georges had a heart attack that made it impossible for him to continue looking for work for over a year and a half. Now in his late 50’s, Georges was unable to find work in his profession, and physically unable to take on labour-intensive employment.

Yvette was able to keep working during Georges’ illness – however she could not pay all the bills and once their savings were used up, the family fell further and further into debt.

During Georges’ recovery, two of their children entered university and the third moved back to Quebec to work in his chosen career. As both Yvette and Georges believed that their heavy student loans had greatly contributed to their first bankruptcy, they tried to help their children out as much as possible, by having them live at home while they went to university.

By mid 2011, the stress of unpaid bills became unbearable. In desperation, Yvette was taking out payday loans – (one of the worst forms of borrowing) and no one was answering the phone for fear of collection calls.

Reluctantly, Yvette & Georges decided that they had to file for bankruptcy, again.

*** ***

During their first meeting at David Sklar & Associates, they spoke with Richard Sklar, Estate Administrator, and reviewed their financial situation in detail.

Fortunately, since they had filed bankruptcy in 1992, the Bankruptcy and Insolvency Act had been expanded to include Consumer Proposals. Richard reviewed both options.

At the time of their first meeting, their finances were as follows:

Income:

  • Yvette Net Per Month $4,500
  • Georges Net Per Month $0

Assets:

  • 2007 Car – valued at $10,000 with a secured (encumbered) $11,150 loan
  • Canada Savings Bond $1,000

Unsecured Debts Owing:

  • Credit Cards $7,000
  • Unsecured Bank Loans $35,000
  • Payday Loans $3,250
  • Rent Arrears $6,000
  • *Unsecured Co-signed Loan $3,500

Total Unsecured Owing $54,750

*Yvette co-signed a loan for her sister, who had since defaulted on the loan.

With the exception of the co-signed loan debt, all of the family’s debt was held jointly by Georges and Yvette.

At the time of their meeting with Richard Sklar in 2011, the Office of the Superintendent of Bankruptcy (OSB) had set the level for Surplus Income for a family of four at $3,579 per month. Since Yvette was earning $4,500 net per month, that meant they would be making monthly Surplus payments of $460.50. Note: Bankrupts pay 50% of the income they earn over the level set by the OSB therefore: $4,500 – $3,579 = $921, $921 x 50% = $460.50.

Since this would be Yvette and Georges’ second bankruptcy, they would be looking at a bankruptcy period of 36 months, during which time they would make monthly payments of $460.50 into their bankruptcy estate for disbursal to their creditors by their Bankruptcy Trustee. $460.50 x 36 months = $16,578. In addition, the $1,000 Canada Savings Bond would also be paid into their bankruptcy estate for a total of $17,578.

A Consumer Proposal. A good idea with Avoiding a Second Bankruptcy

However, they had the option of making a Consumer Proposal to their unsecured creditors, which would enable them to avoid bankruptcy. In order for most Consumer Proposals to be accepted by creditors, debtors need to offer the unsecured creditors more money that they would receive in a bankruptcy.

Neither Yvette nor Georges wanted to go into bankruptcy, so the idea of a Consumer Proposal was very appealing. They decided to make a joint Consumer Proposal of $27,000 – which would be paid monthly at the rate of $450 per month, over a 60-month period.

Working with Richard and the trustee, they prepared and submitted a Consumer Proposal to their creditors, who accepted the proposal.

Yvette and Georges have begun making their proposal payments. They remain optimistic that Georges will find suitable employment – however, they are now able to live on Yvette’s income.

Should Georges find employment, it will not affect the amount owing on the Consumer Proposal, and should enable them to pay off the proposal sooner, if they which.

Having a second chance at a fresh start, without having to go into bankruptcy a second time, has removed much of the stress that both Yvette and Georges were under.

To protect our clients’ privacy, details of this case have been altered.

Take Your First Step Towards A Debt Free Life

If you are overwhelmed by debt and live in the Toronto area, call us at 416-498-9200 to book a FREE, confidential appointment. We will review your financial situation in detail and discuss all of your options with you. Alternatively, you can fill out the form below and our team will reach out to you. 

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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!
Sue Murray
18:45 05 Dec 21
Putting together and executing a Consumer Proposal can be daunting, that is unless you work with Cori Naron at David Sklar & Associates Inc. Cori's advice and support has been instrumental over the past five years. Thank you Cori!!
Barry Kuntz
20:37 01 Dec 21
I’m very happy with the services I received for Jackie Stanley who helped me get my finances in order. It was a quick and easy process & all of my questions were answered.
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01:18 19 Nov 21
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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22:03 17 Nov 21
Got my probe solved, great service
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17:02 11 Nov 21
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.
Giani Kokolakis
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.
Wajay Awan
07:29 12 Oct 21
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.
Bruce Locke
16:13 08 Oct 21
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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