Debt in Canada
If you are dealing with debt that you are unable to repay, hopefully you will review all the available options. Here we will look at how filing for Bankruptcy, a Consumer Proposal or a Division 1 Proposal can help pay off and deal with your debt.
The reasons for you ending up in this financial disarray can vary. There may have been health issue in the family that needed to be dealt with, or there are spending issues within your family, or job loss. The list can go on for the actual reasons, but the bills keep increasing faster than they are able to be paid off, and you need to find a resolution to this problem.
This can cause a life of misery for many that are just looking to pay their debts, save for their future and live a happy life.
If you happen to encounter a situation similar to this, there are some options for you to consider, such as the government regulated debt relief programs.
Bankruptcy Trustees are the only licensed people that are licensed by the Government to file/administer bankruptcy, Division 1 Proposal or Consumer Proposals.
First you would need to be declared insolvent. This is that you are not able to pay your unsecured debts within a reasonable amount of time. Once you are declared insolvent, then we can see what gov’t programs will be suitable for you.
When the insolvent person is able to repay some of their unsecured debts, then this leads them into the option of perusing a Consumer Proposal, or a Division 1 Proposal (depending on the amount of unsecured debt that is owed).
With a consumer proposal, the debtor will now pay a portion of the unsecured debt back, and this is over a period of up to 5 years. With a consumer proposal, the majority value of the unsecured debt must vote in favor of the proposal. If this passes, then all of your unsecured debts are then covered within the repayment, and your assets are covered.
With a Division 1 Proposal, this covers people who happen to owe more than $250,000 in unsecured debt. Mortgages (primary residences) are not included within this
Bankruptcies tend to be the last choice recommended, and at times it is the best option available. Each case is carefully reviewed, and all options are provided, and the best course of action is given.
If paying off your debt is a problem, and getting out of control, call for a free consultation. We can review your finances and recommend the best course of action to help you get back on track with your life.
