Will Consumer Proposals in Oshawa Stop Collection Calls?

Consumer proposals in Oshawa are one of the most popular solutions for debt relief, and are used in many cases as an alternative to bankruptcy. It does offer many benefits to those drowning in debt, and there is probably one benefit that debtors find the most appealing -- that collection companies and creditors can no longer contact them for payment.

Receiving collection calls can no doubt be very upsetting. In fact, it’s not unheard of for people who owe money to receive five to ten calls from a collector in a single day. It can be especially stressful if the calls are made at your place of employment and bill collectors become a little too aggressive and ask to speak to a receptionist, your fellow employee, or your supervisor. It can harm your reputation in the workplace, and in some instances, even lead to the possibility of losing your job.

Collection agents can call you anywhere they possibly can, on your cell phone or on your landline at home and even use robocalls to send automated messages just to make sure they contact you directly. They’ll speak to anyone, your spouse, your children, your friends, acquaintances and other family members. Nothing can stop them from getting a hold of you, and they have every right to collect their money. If you owe them money, it’s well within their job to call, send letters, and even bring you to court.

The simple act of filing a consumer proposal can stop these collection calls.

When you file for a consumer proposal or a personal bankruptcy the law automatically creates something called a “Notice of Stay of Proceedings.” This stay is, very simply, a legal order that will stop your creditors from contacting you.

Within two business days of filing for personal bankruptcy or a consumer proposal, your Licensed Insolvency Trustee will receive a Certificate of Authority issued by the Bankruptcy Court. Along with the issuance of the Certificate of Authority,  the Notice Of Stay Of Proceedings is also sent out to all your unsecured creditors, employers and the courts informing them of the stay. The stay immediately puts into effect the requirement to stop any and all lawsuits and collection activities against you in connection with your unsecured debts. This will include:

• Stop wage garnishments
• End all collection calls
• Stop all threats of legal actions
• Stop all court proceedings related to your debt that are included in the consumer proposal or bankruptcy
• Stop any lawsuits and judgments against you

It is important to note that the stay of proceedings only applies to all unsecured debts that are included in the consumer proposal. These debts may be:

• credit cards debt
• unsecured lines of credit
• bank account overdrafts
• unsecured bank loans
• payday loans
• income taxes

Some debts cannot be included in the consumer proposal and the Stay of Proceedings will not stop any actions relating to them. Debts that cannot be included in a consumer proposal or bankruptcy may include:

• secured debts, like your mortgage or car payments
• alimony payments
• child support payments
• debts incurred from fraud
• court ordered fines

The automatic stay of proceedings remains in place until:

• Your consumer proposal is rejected by your creditors
• You complete your consumer proposal
• When you obtain a discharge from your bankruptcy

Stopping collection calls through the Stay of Proceedings is often a major advantage of filing for consumer proposals in Oshawa. Make sure you consult with a Licensed Insolvency Trustee to learn more about the Automatic Stay of Proceedings and if a consumer proposal is the best solution for your debt problems.

Choosing a Reputable Toronto Credit and Debt Counseling Company

Each year over a quarter of Canadians use credit and debt counseling in Toronto to help with their debt and money management problems. They’ve tried to get out of debt on their own but couldn’t simply make it work and so they turn to a credit counseling company to help them work with their creditors, establish a monthly payment plan they can afford, and to create a budget they can stick to.

However, a large number of these debt counseling businesses are unregulated. They employ so-called experts who call themselves ‘debt consultants’ but are actually untrained and unlicensed. Most will just charge a fee and then refer the debtor to a qualified debt professional, like a Licensed Insolvency Trustee, a Certified Credit Counsellor or an Accredited Financial Counselor.

How can you as a consumer protect yourself from the dishonest schemes that some shady organizations practice?  

Here are some tips to help you know how to choose legit and trustworthy agencies:

Be careful of ‘quick fixes’

Some companies offer what is called a “debt settlement program” with claims that it can reduce your debt by up to 65% and that it you can get out of debt in less than six months. While this companies may be able to settle one or more of your debts, the arrangement can be risky and do not always work. One very big risk is the bad hit to your credit rating. The debt settlement company will ask you to stop making payments to your creditors while a settlement is being negotiated and instead send your payments in a savings account. During the few months that you stop paying your debts, the due date runs it’s course and your debt becomes past due. Once past due, the debt settlement company will settle the amount with your creditors. These late payments, however, are reported to the credit bureaus, and your credit score drops, and there is a chance that you will receive collection calls. Late payments that are put down on your credit report will remain on record for up to seven years. With this bad credit rating, you'll have difficulty getting new credit cards and loans, and you may even find it hard to get a job.

Avoid dealing with debt settlement companies that promise more than they can deliver, particularly when they charge you fees before they have settled your debts and guarantee that they can make your unsecured debts go away.

Get expert help

Rely only on accredited, qualified financial professionals, like a credit counsellor, an accredited financial counselor, or a licensed insolvency trustee.

Credit counsellors are certified by the Canadian Association of Credit Counselling Services, financial counselors are accredited by the Association  for Financial Counseling and Planning Education (AFCPE) and licensed insolvency trustees are regulated by the Office of the Superintendent of Bankruptcy. These debt professionals work with many credit and debt counselling agencies, providing knowledgeable assistance and giving the best possible advice for your situation.

Consider all your options

A credit counsellor, financial consultant, or licensed insolvency trustee who cares deeply about their clients will not be biased in selling their services. They will take the time to fully understand your  situation and explain all of your options, which may include:

• a debt consolidation loan or refinancing
• a debt settlement
• a debt management plan through a not for profit credit counsellor;
• a consumer proposal
• filing for personal bankruptcy

There are plenty of accredited agencies ready and willing to provide credit and debt counseling in Toronto. Always take the time to research the provider you are considering to make sure that they work in partnership with accredited and qualified debt professionals. When you choose wisely, you can really get the proper guidance and help you need to turn your financial life around.

How Will Filing for Bankruptcy in Scarborough Affect My Home?

One of the biggest concerns when people file for bankruptcy in Scarborough is whether they will lose some of their assets, especially their most valued asset -- their home. It is a very common fear for many Canadians and it is one of the causes why they delay facing their financial problems. They don’t want to face their fear and hesitate to make an appointment with a Licensed Insolvency Trustee because they are afraid of what they might hear.

The fact is that seeing a Trustee may probably give you the best chance of retaining your home. When you talk to a Trustee, and tell him that  you are concerned that you could lose your home and that you don't want to, the very first thing he will do is evaluate your situation to see if you can, and should, keep your home in a bankruptcy.

He will ask personal questions about your financial circumstances and may request to see documents, such as statements, bills and proof of your income and assets to determine your debt situation and work out how much you can afford to pay towards your debts.

Contrary to one of the most common bankruptcy myths out there, you don’t automatically lose your home when you file for bankruptcy. The Trustee will first figure out:

• How much equity you have in your home
• Whether or not you can afford to keep up with your mortgage payments

Then, depending on whether or not you have equity, he will be able to advise you on:

• Whether bankruptcy would let you lose or keep your home
• What other options you can take if you choose to keep your home

Finding out if you have equity

Whether or not there is any equity in your house is one of the first things your Trustee will want to work out. This is a very necessary step because the amount of equity you have in your home will determine whether or not you will be able to keep your home.

The equity in your home corresponds to the amount of money you would get if you sold your house. It is what your home is worth on the current real estate market minus what you owe on it. This is determined by taking the market value of your house (based on real estate listings for similar homes as yours), and then subtracting the total amount of what you still owe, which includes your mortgage, property taxes, and selling costs.

New Ontario exemption which applies to home equity

In December 2015, a new change in Ontario bankruptcy exemptions was introduced that could help homeowners who file for bankruptcy keep their home. According to this new rule which applies only to your principal residence, if your home has equity of $10,000 or less, your trustee does not have the authority to seize and sell your house. It is considered to be an exempt asset and cannot be seized. If, however, the equity in the property exceeds $10,000, then there is no exemption.

This is why talking to a Licensed Insolvency Trustee must be your first step when you are thinking about finding the best debt solution. With this exemption protecting the equity in your home, you might still be able to file for bankruptcy in Scarborough and keep your home.

Why Are Toronto Consumer Proposals Better Than Bankruptcy

Many Canadians today are choosing to file Toronto consumer proposals as an alternative to bankruptcy. They feel that it is a more honorable solution to their debt problems. It allows them to make a deal with their creditors and actually offer some form of payment, and that makes them feel much better than not being able to pay at all.

Bankruptcy and other debt repayment programs will also deal with your debts, but there are several reasons why more people think that a consumer proposal is a better option for them.

Affordable monthly payments

One great feature of a consumer proposal is that it gives the debtor the ability to make affordable monthly payments. Your consumer proposal administrator can negotiate for you to repay 50% or 30%, at the very least, of what you owe to your creditors, and if accepted this will be divided into a fixed monthly amount for a period of up to three to five years. Your monthly payment will not be subject to interest charges and it will remain the same amount regardless of any additional income you make within the proposal contract period.

If your financial circumstances get better, you can make extra payments to pay it out faster.

You can even make a one time payment too if you can obtain access to a lump sum amount at some point. What most people do is set up the proposal for the longer term initially to get a lower minimum payment and then shorten the time of the proposal once they have the ability to do so.

No surplus income

In a bankruptcy, you are required to pay a surplus income penalty if your income is higher than the limit set by the government. Your trustee will calculate if you have any surplus income based on the income and expense statement you are required to provide every month that you are bankrupt. If you have a surplus income that is more than the limit, this will extend your bankruptcy to 21 months and you will need to make surplus income payments for each month you remain in bankruptcy.

You will have to take into account if you can afford to make the  extra payments in case you have significant surplus income. In a consumer proposal, you know exactly what you are required to pay each month, which is one reason why consumer proposals are better than a bankruptcy.

Loss of assets

Another significant reason why more people prefer a consumer proposal is the high chance of losing some of their assets in a bankruptcy.

Some assets that you may lose can include the following:

• You lose any tax refund for the year you file for bankruptcy and all refunds in previous years that you have not yet received
• You lose RRSP contributions in the previous 12 months
• You may lose some investments, such as your RESPs, stocks, and Canada Savings Bonds
• You may lose the equity in your house, depending on bankruptcy exemption rules which are different in each province
• You may lose your car or other motor vehicles, depending on bankruptcy exemption rules which are different in each province

For some people, the cost of losing these assets can equal to a substantial amount, and a consumer proposal may make more sense to help them minimize their loss.

In many cases, it can be very complex to determine if Toronto consumer proposals are a better alternative to bankruptcy. It will greatly depend on each individual’s financial circumstances. There’s quite a bit of math to solve and a lot of laws to apply. It’s highly recommended that you talk to a Licensed Insolvency Trustee to find out all your options so you can decide if it is indeed the best solution for you to take.

What Type of Debt Help Does an Oshawa Licensed Insolvency Trustee Provide?

An Oshawa licensed insolvency trustee can provide assistance to  individuals and businesses struggling with debt. He can offer more than just bankruptcy as a solution for debt problems.

Licensed insolvency trustees can provide a number of debt relief services:

Consultation

If you are worried about too much debt and may be afraid that you are headed for bankruptcy, you can meet with a licensed insolvency trustee to help you assess your financial situation. The initial consultation with a trustee is always free. He will ask you pertinent questions and also request to see relevant documents to help him evaluate the extent of your debt problems and to help you determine the best course of action. You may simply need to fix your budget, and the trustee can give you advice on free tools and resources you can use or recommend you to credit counselling sessions that will provide you with some  financial skills to enable you to manage your debt load. If the trustee believes you need more help, then he will recommend other solutions for you.

If you recognize that you need to get control of your debts, it’s important that you talk to a licensed professional as soon as possible.  Simply talking to someone whom you know can provide the help you need can greatly help ease the burden of debt.

Consumer proposal

If the trustee determines that you have equity in a property or other asset, or you can afford to make fixed monthly payments with your income, he may suggest a consumer proposal. You may hire the trustee to become your Consumer Proposal Administrator and he will negotiate with your creditors to reduce your debts, stop interest charges and arrange for a lower monthly payment. He will handle all proceedings on your behalf, all you have to do is meet monthly payments once your proposal is accepted by the creditors.

Corporate insolvency

More creditors are becoming more flexible in providing options for debt repayment and are now allowing corporations and other businesses to make arrangements or proposals instead of going into bankruptcy.

If your company has accumulated debts and you need to work out a payment plan with your creditors or a refinancing to give the business more time to pay its debts, a Licensed Insolvency Trustee in Oshawa can recommend these debt solutions:

• Informal payment arrangement
• Formal payment arrangement or proposal
• Protection through the Companies’ Creditors Arrangement Act (CCAA), 
• Receivership 
• Bankruptcy

Personal Bankruptcy

If your debts are greater than the value of everything you own (including assets and income), then your trustee may suggest filing for personal bankruptcy. As with a consumer proposal, the trustee will handle all proceedings on your behalf which will include contacting your creditors, filing all the necessary paperwork, notifying all your creditors,  file outstanding tax returns, ensure that you make all your monthly payments and attend your credit counselling sessions until you are successfully discharged.

Contacting an Oshawa licensed insolvency trustee does not automatically mean that you need to file for bankruptcy. When you make an appointment, he will carefully review your situation and discuss with you all the available options. He may see that a bankruptcy is right for you or he may advise you of another solution, either way he will walk you through the pros and cons of each solution and help you choose the most suitable strategy for your circumstances.

Who Can Provide Bankruptcy Service in Scarborough?

Only a Licensed Insolvency Trustee (LIT) is licensed by the Office of the Superintendent of Bankruptcy (OSB) to administer bankruptcy service in Scarborough and elsewhere throughout Canada. No one else has the ability to file a bankruptcy. Even if you go to a bankruptcy lawyer, they will  refer you to a trustee as they are the only ones permitted by the federal government to manage bankruptcies, consumer proposals and assets held in trust in accordance with the Bankruptcy and Insolvency Act (BIA).

Licensed Insolvency Trustees are highly regarded officers of the court. They do not work for you or your creditors. They are bound by the law to protect your rights as well as to look out for the rights of your creditors and to ensure that the entire bankruptcy process is fair for all parties involved.

When you meet with a Licensed Insolvency Trustee in Scarborough, he will provide the following bankruptcy services:

• A free consultation to assess your debt, review your financial situation, answer any questions you may have in relation to bankruptcy, and to provide clear information on possible alternatives that could be available for your situation
• Prepare the necessary official forms for filing a bankruptcy
• Electronically file all necessary paperwork with the OSB to start the bankruptcy process and to declare you bankrupt in a formal and public way so you can obtain bankruptcy protection immediately
• Mail copies of your documentation to your creditors  to formally let them know that you have filed for bankruptcy
• Conduct fact finding process to find out if you have any nonexempt assets or any surplus income payments that can be used to pay back your unsecured creditors
• Review your bankruptcy papers to validate claims made by your creditors about what you owe
• Hold a meeting of creditors if requested at which you are required to attend to help creditors learn more about the causes of your bankruptcy and to give the trustee some specific directions
• Sell your assets, except for those that are excluded from sale by provincial and federal bankruptcy laws
• Hold all proceeds raised from the sale in a trust for distribution to your creditors once your bankruptcy has finished, usually after nine months if all conditions are met,
• Make the required bankruptcy payments to your creditors and ensure that the funds are allocated fairly to each of your creditors
• Provide you with the required financial counselling sessions that is part of your duties in a bankruptcy to help you understand what caused your debt situation and to equip you with the necessary skills to manage your financial affairs in the future
• Apply for your bankruptcy discharge to formally eliminate your debts and release you from any legal obligation of repaying them

Many people are sometimes misinformed and wrongly think that when they go to a Licensed Insolvency Trustee they have to file for bankruptcy. The fact is that LIT’s are licensed debt consultants and can provide other services to help you get rid of debt and avoid bankruptcy. These services include:

• Filing a consumer proposal to your creditors 
• Providing debt counselling which will include debt reduction, money management and budgeting advice to help you manage your debts without having to declare bankruptcy
• Negotiating settlement agreements with your creditors to help you come up with a favorable deal
• Providing referrals to local, reputable credit counselling agencies should you need their services

If you are facing a financial crisis and are constantly being harassed by collection agencies, or maybe you are worried about a wage garnishment, it is always best to consult with an expert who can provide qualified bankruptcy service in Scarborough to learn all the legal options available to help you manage your debt load. There is absolutely no obligation to proceed if you find out that bankruptcy is not the right solution for you. What you get is the opportunity to explore all your options and the realization that there are ways to help you deal with even the most extremely serious debt situation.