Yvette & Georges: Avoiding a Second Bankruptcy in Toronto

Table of Contents

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.

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The team at David Sklar and Associates Inc are very professional and are willing to help you get out of debt. Highly recommended.
Melissa MacKenzie
12:35 29 Mar 23
I would like to thank the team at David Sklar and associates inc. for all the time and effort they put in to support this process for me. This topic can be challenging to disclose but a big thank you to Christine for going above and beyond in guiding me through all my options and supporting me through the decisions. I cannot recommend this group enough , as they have shown me compassion , knowledge , and understanding throughout the entire process. I look forward to the next step of this process and learning how the proper way of becoming financially educated through the support of their financial counselling team. For anyone who is struggling , just know that there is a wonderful group of educated professionals at David Sklar who are available to help!
Michelle Plouffe
18:45 14 Mar 23
It took me awhile to get up the courage to contact David Sklar but I’m so glad I did. Trina walked through my options with me and provided the knowledge I needed to make a decision to help turn my financial situation around. She is patient and empathetic and answered any and every question that I had. Trina provided me the reassurance I needed that I was making the best decisions for me and my family. I’m so happy that I reached out and now have a plan to get back on track.
M. Mackenzie
19:59 12 Mar 23
Trina was very helpful and thorough.
Sam M
15:26 12 Mar 23
Christine was very helpful, kind, and understanding. She explained everything thoroughly, answered any questions I had, and was responsive to any concerns I had. 100% would recommend
Katherine Campbell
17:29 08 Mar 23
Jackie Stanley is excellent she took the time to explain everything to me and I am so grateful to her for giving me a fresh financial start so if you have any doubts don’t and go see her if you want to achieve financial freedom!
Heather Helfield
21:24 06 Mar 23
Amazing friendly staff that knows what they are going. They make a difficult situation not so bad. Would give 10 stars if I could.
alie Balan
22:37 25 Feb 23
Very helpful and kind and gave me all the available options before helping me decide which one was best for me. I would definitely recommend Jackie
Alison Rivard
01:01 21 Feb 23
Great experience i was in financial trouble and someone of my friends recommended this company. Cori is a wonderful and welcoming person she did a very good job and came up with a smooth and flexible monthly payment after the reduction. i highly recommend this company. Thank you David sklar and special thanks to Cori.❤️🙏🏻
Jasmine Joseph
22:08 13 Jan 23
Met up with Mr. Jason Sklar to discuss more in person, very thorough and clear. He is very kind and thoughtful, I will be referring anyone with the same situation to David Sklar & Associates.
Ariel Domingo
02:33 29 Dec 22
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