When your debt load begins to undermine your quality of life, it’s time to consult an expert who knows how to turn your finances around. Waiting for the situation to become critical will not serve anyone’s interests, especially not yours!
This is why you must take the lead on the situation by considering the different methods available, such as bankruptcy, the consumer proposal or the consolidation of debts. To find out which of these options would be best for you, read on and let us find the financial advisor who will guide you in your approach!
I’ve already gone bankrupt, what are the impacts of a second?
You did not think you had to declare bankruptcy in your life and you’re at your second without having had time to understand why? You are certainly wondering what the implications are with a second personal bankruptcy as well as the consequences on your finances.
First of all, be aware that the operation of a second personal bankruptcy is the same as for a first. This means that your assets will always be sold and liquidated to pay your debts and you will be required to pay a certain monthly amount to the trustee for the duration of the bankruptcy. It is also clear that your forgivable debts will be forgiven and that any lawsuits filed against you prior to the filing of bankruptcy documents with the Office of the Superintendent of Bankruptcy will be frozen.
Thus, all the advantages, disadvantages and procedures of a first bankruptcy are always present during a second bankruptcy. The problem lies in the consequences. Indeed, while a first bankruptcy appears in your credit report for 6 years, a so-called multiple bankruptcy will remain on your file for 14 years after your release.
The posting on the record is not the only consequence of a multiple bankruptcy. The time required to obtain a release will also be lengthened. If the delay was about 9 months for a first bankruptcy, this reprieve extends to 24 months in a second bankruptcy. We hope you’ll find not one, but if a 3rd bankruptcy was to point the nose in your financial picture, the duration will be 12 months, but the bankrupt must necessarily be present in court when the expiry of the term for a judge to establish the remaining duration of the bankruptcy.
While the consequences of a second personal bankruptcy only get worse compared to the first, it does not mean that it is not the solution that you need! You will still be relieved of most of your debt upon release and you will get another chance to rebuild a viable financial future!
I want to avoid bankruptcy with a consumer proposal, what are the steps to follow?
For a long time, the consumer proposal is presented as the last and last chance to avoid a personal bankruptcy. It is simply about offering your creditors the chance to settle your debt by paying only part of it, otherwise you will be forced to declare bankruptcy. This is done by hiring a licensed insolvency trustee to put the approach in place and contact the creditors with your offer.
But what are the steps to follow to reach a positive response from your creditors?
-Consult a licensed trustee in insolvency: This step is unavoidable. It is the trustee who will draft your proposal, ensuring that it complies with the many requirements of the Bankruptcy and Insolvency Act , and that it does everything in its power to ensure that the proposal is accepted.
– Filing documents: The trustee in bankruptcy will also be responsible for filing the legal documents with the Office of the Superintendent of Bankruptcy. This will only be done if the trustee is of the opinion that your proposal is feasible. Only in such circumstances will the trustee file your proposal.
-Development of the proposal: The trustee is also the one who will set the terms of the agreement, such as the duration of the proposal, the payment interval, the priority of the creditors, and this, ensuring that none of the conditions does not contravene the law. For example, the law prevents the implementation of a consumer proposal spanning more than 5 years.
-Suspension of Remedies and Proceedings: When all previous steps have been completed and documents have been formally filed with the Office of the Superintendent of Bankruptcy, the law provides that any lawsuit against you is stayed. This includes the seizure of your property and your salary.
-Presentation of the proposal to creditors: This step is simply to send the proposal developed to your creditors, taking care to explain the reasons for such an approach.
-Response from creditors: The creditors will vote among them to know if the proposal is sufficient to be accepted. They will have 45 days to submit their response.
-Assembly of creditors (If requested): Within this same 45-day period, your creditors are entitled to demand the holding of a meeting or you will be invited. However, if no meeting is required, the consumer proposal will be considered automatically accepted.
-Refus: A refusal simply means that you have to start the proposal process again if you wish to continue in this avenue. Contrary to some popular beliefs, the refusal of a proposal does not put the debtor bankrupt, so you will always have the opportunity to submit a new offer.
-Acceptance: A simple majority of 51% of the creditors in favor of acceptance of the proposal is sufficient to be approved. This will formalize the proposal and you will now have to comply with the terms and conditions.
Debt consolidation, is this really the simplest solution?
To offer you a short and satisfying answer: yes, debt consolidation is truly one of the simplest solutions! From there to assert, that this is the solution that suits you is another story, but when compared to the consumer proposal or bankruptcy, we talk about a much more accessible and profitable solution.
As mentioned, bankruptcy and the consumer proposal are both governed by the Bankruptcy and Insolvency Act , which makes them complex and technical options. In return, debt consolidation is a more informal process between an individual and the bank. Although there are legal formalities to be respected, they are in no way comparable to those implied by the two previous options.
All that debt consolidation requires is negotiating a loan so that you can repay your creditors. This can be done through a consolidation loan or a line of credit. The principle always comes down to the substitution that the bank makes by repaying your lenders for you.
The advantage of this option is obvious; savings on interest rates. So, for this option to be beneficial for you, you need to have your current debts tied to a high interest rate. If not, you will exchange eighty-five cents for a dollar coin, which will not advance your cause very far.
To put a slight downside in an avenue that seems too advantageous, know that despite its simplicity, debt consolidation in no way reduces the amount you owe. Although a substantial saving in interest rates is achieved, your debt will still have to be repaid in full, something that the consumer proposal and bankruptcy allow you to avoid.
To find a financial advisor, it all starts with Bye Bye Debts!
Your over-indebtedness stops here!
You are running out of reasons for not going ahead with a financial recovery plan and you know it very well! So, stop looking for excuses and let us find the right expert for you!
On the North Shore of Montreal, so-called debt professionals abound. Be careful, do you go to real trusted professionals. The network of financial advisors on the North Shore, reliable mortgage brokers and bankruptcy trustees Bye Bye Debts will allow you to have peace of mind. They will explain and advise you on the different solutions available to you.