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Here are your options to deal with debt
Debt Management Plan (DMP) Consumer Proposal Bankruptcy What’s the difference? A DMP is a voluntary agreement with some or all of your creditors that often includes interest relief and the payment of your debts over time. A consumer proposal is a legal process designed to relieve honest but unfortunate debtors of their debts. A proposal is an offer to your creditors to pay all or some of what you owe them over a specific period of time. If the proposal is accepted, and once all the terms of the proposal are met, you are legally released from the debts included in the proposal. Bankruptcy is a legal process designed…
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CERB Overpayments – Discharge with bankruptcy or consumer proposal
The following is a Guidance to Licensed Insolvency Trustees dated March 25th 2022 from the Office of the Superintendent of Bankruptcy’s website: The Government of Canada is beginning to recover Canada Emergency Response Benefit (CERB) where it has been determined that it was paid erroneously or was an overpayment. The Office of the Superintendent of Bankruptcy (OSB) is confirming to Licensed Insolvency Trustees (LIT) that erroneous or overpayment of CERB are provable claims in bankruptcy. Erroneous or overpayment of CERB is a releasable debt in the event of an insolvency given that it is to be treated as a debt owed to the Crown pursuant to subsection 12(2) of the…
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My Husband Lied About $350,000 of CRA Debt. What Now?
A READER ASKS: Hello, we are 37 F+M married in Ontario for 17 years. Teenage kids. I make $70k in a government job with pension. He owns a contracting business that he opened about 15 years ago. We are well known. He is very successful with several great employees and we get a lot of business. After expenses and wages he might clear $100k. We have $109,000 in the bank combined, today. Through our entire relationship he has paid for everything in cash. Even multiple vehicles. Trips. He saves for what he wants and buys it. He has never had a credit card. All our finances are separate and we…
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Consumer Proposal Car Ownership Problem
A READER ASKS: My wife is exploring filing a consumer proposal. We have checked with four insolvency trustee offices. We’re confused on vehicle ownership, and we are getting different answers. 3 years ago, we bought our second car (currently worth 28k). For insurance purposes, I was already the primary driver on the first car, so I was advised that to make her primary, the car should be in her name. At that time, I went ahead and purchased the vehicle and put it in her name. However, I used MY line of credit and MY account to issue the bank draft. Our mutual understanding was that the vehicle is MINE…
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Replacing your Licensed Insolvency Trustee
So you’ve filed your personal bankruptcy or consumer proposal with a Licensed Insolvency Trustee but for whatever reason, you haven’t been happy with the service you’ve received. Is it possible to replace your Trustee? This will depend on the type of engagement you’re currently undergoing. CONSUMER PROPOSAL Your proposal hasn’t yet been approved If you’ve filed a consumer proposal and it’s been deemed approved by your creditors and the bankruptcy court (i.e., it’s been more than 60 days since the day your proposal was filed and no meeting of creditors has been called), then you’re stuck with your Trustee. However, if your consumer proposal has not yet been deemed approved…
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How creditors collect their debts
There is a lot of misconception of what creditors can and cannot do to collect their debts. To dispel some myths, this post will walk you through the steps a creditor will typically take in collecting its debt. Please note that the content of this post applies to residents of Ontario and its legislation. Step 1: Dealing with the Creditor If you have fallen behind in your payment to a creditor, it will usually send you a notice of your late payment by mail. If it receives no response, their collection department will start calling you by phone. Step 2: Dealing with a Collection Agency If no satisfactory payment arrangements…
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What is a Division I Proposal?
What is the difference between a Division 1 proposal and a consumer proposal? Consumer Proposal Vs Division I Proposal The consumer proposal process is used where a debtor’s liabilities do not exceed $250,000 (this threshold excludes mortgage debt on a residential home). In summary, the process in such circumstances is as follows: The proposal is filed with the Office of the Superintendent of Bankruptcy (“OSB”). Upon filing, a stay of proceedings is immediately in effect whereby the debtor becomes creditor-proof. The proposal is sent to creditors for review. The creditors are deemed to have accepted the proposal if no objections are received from them within 45 days after the filing…
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Creditor Proofing Tips for Business Owners
The failure of a prospective business owner to employ creditor proofing techniques before starting a business is a frequent cause of personal financial difficulties due to the failure of a business and the attendant business-related liabilities personally owed by the company owner. These individuals must often file for personal bankruptcy or make a consumer proposal to their creditors as result of business-related debts. Debtors completing their bankruptcy/ proposal often wish to start up another business sometime in the near future. The expected question then arises: how can they creditor-proof themselves in the event that their new business fails? Here are some ideas: Creditor proofing techniques 1. Consider incorporating the business.…
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When you owe taxes to the Canada Revenue Agency
Yes, you owe income tax debt to the Taxman: sometimes it feel like you’re working for no one but him; especially if you are a high income earner. Therefore, it’s no surprise that income tax payers: Find ways to shelter their income. For many self-employed individuals, particularly some professionals, they do this by investing in tax shelters. However, when one’s tax shelters get disallowed by Canada Revenue Agency and a reassessment is issued, what can be done if the tax bill can’t be paid? Fail to remit income tax installments altogether, and end up with significant penalties and interest. When the assessment or reassessment comes in, some tax debtors are…