Read on to learn more about how business bankruptcy can be a viable option to get debt relief, and when business bankruptcy alternatives may be a better solution for you and your business.

How Can a Licensed Insolvency Trustee Help my Business?

A Licensed Insolvency Trustee can help your business because in Canada they are the only professionals empowered by the Federal Government to help both individuals and businesses legally restructure and write-off debt. For businesses, these insolvency options include restructuring through the Companies’ Creditors Arrangement Act, receivership, Division 1 Proposal, or bankruptcy.

If you think your business may be in financial trouble, here are some of the areas a Licensed Insolvency Trustee can help you assess and evaluate:

• Financial viability of the business and opportunities for turnaround
• Cashflow and financial statements of company
• Specific creditors the business owners should be aware of
• Pros and cons of restructuring the business

If you are a creditor with an interest in a business, a Licensed Insolvency Trustee may also help you review the business operations, viability and receivership appointments.

What is Business Bankruptcy?

Business bankruptcy is a legal debt solution that business owners may consider when a business cannot pay its debts, and business owners should also consider a Division 1 Business Proposal as an alternative to business bankruptcy.

• Before filing a bankruptcy or Proposal it’s important for business owners and stakeholders to understand the complexities of these processes, including all potential liabilities and repercussions of both unique options.

Bankruptcy for a Sole Proprietorship or Partnership

If your business is set up as a sole proprietorship or partnership you are not legally separated from your business – essentially the assets and debts of your business are also your personal assets and debts.

A business bankruptcy in this case would amount to a personal bankruptcy, or bankruptcy may be avoided entirely if you (the business owner) file a Consumer Proposal instead.

• Filing a personal bankruptcy (or Consumer Proposal) to deal with business (and personal) debts is a relatively straight-forward process.
• You are not required to shut down your business as part of these solutions.

The first step in the bankruptcy process is to meet with a Licensed Insolvency Trustee – there is no requirement for you to consult with a lawyer or accountant to start a bankruptcy.

How Do I Qualify for a Consumer Proposal? Learn More

Bankruptcy for a Corporation or Limited Company

If your business is incorporated, then by law it is considered its own legal entity. Many people think that by setting up a limited or incorporated business they are fully separating themselves from their business assets and debts, but that is not always the case.

Even if your business is structured as a corporation or limited company there is still a personal liability created for certain debts, such as money owing to employees for wages, and to Canada Revenue Agency for GST debt or payroll source deductions.

• Filing a bankruptcy for your corporation does not end the business’ existence; companies are not automatically dissolved because of a bankruptcy filing.
• However, unless the bankrupt corporation is able to later repay all the debts it owed at the time of the bankruptcy filing, it will ultimately cease to operate.

Learn More About Debt Solutions for Having Government Debts Forgiven

What Are the Main Steps in a Corporate Bankruptcy?

The following is a very basic overview of the key steps for business owners who want to file a business bankruptcy. It’s important to remember that a personal bankruptcy filing will generally not have the same steps involved:

1. Meet with a Licensed Insolvency Trustee

To file a corporate (or personal) bankruptcy you will first need to meet with a Licensed Insolvency Trustee to discuss and evaluate your situation. Generally, this first meeting will be to understand:

• The average revenue and profits of the business
• Who the business owes money to, and how much is owed
  • Whether any personal guarantees have been signed by directors or stakeholders
• Who the directors, officers and other stakeholders of the company are

The Licensed Insolvency Trustee will explain the general process of business bankruptcy to you and ensure that you fully understand the requirements.

2. Sign the Corporate Bankruptcy Documents

If a decision has been made to proceed with a business bankruptcy, the Licensed Insolvency Trustee will prepare official bankruptcy documents for you to sign.

Once you have read and signed all the official business bankruptcy documents the bankruptcy will be registered and your creditors will no longer be able to pursue you for debt payments or continue to attempt collection actions.

3. Complete the Corporate Bankruptcy Duties Required

 Some obligations may be required of the business owner. Some of these duties include:

• Attending a meeting of your creditors
  • Your Licensed Insolvency Trustee will hold a meeting of your creditors within three weeks of the date of the business bankruptcy
  • This meeting gives opportunity for claims of creditors to be reviewed, and for creditors to vote on some decisions that may need to be made
• Providing information to/help the Licensed Insolvency Trustee
  • You may need to provide the Licensed Insolvency Trustee general information about, or assistance with any assets that may be sold under the bankruptcy, or information about the company’s creditors

Once the administration of the business bankruptcy has been completed and there are no further duties required of the Licensed Insolvency Trustee, the Trustee will then apply to the court to be discharged (released), this essentially closes the bankruptcy file and there is nothing else to be done on the part of the business owner or the Trustee.

We understand that the decision to wind down a business that is struggling financially can be difficult and emotional. Connect with a local Licensed Insolvency Trustee to discuss your situation, get more information about how to manage business debts, and evaluate all possible debt solutions available to you.

The post Business Bankruptcy in BC appeared first on Sands & Associates.

Read on to learn more about how Division 1 Proposals can help to save a business. 

What is a Division 1 Proposal?

Debt settlement proposals for businesses are officially called Division 1 Proposals, which are an effective and flexible tool that can be used to eliminate business debt and save your business. 

A Division 1 Proposal can only be filed through a Licensed Insolvency Trustee and is a binding agreement with the company’s creditors to restructure their debts owing, usually by reducing amounts and/or adjusting interest charges and timing of required payments. 

• A key theme of a Division 1 Proposal is that it must offer creditors more than what they would receive if the business were to file a bankruptcy. The percentage of debt forgiveness and amount of debt repayment required under a Proposal often depends directly on the company’s cashflow.

How Does a Division 1 Business Proposal Work for Businesses?

The Licensed Insolvency Trustee works with the owners of the company to draft a Proposal that presents a “win-win” situation for both the business and its creditors. Typically, the creditors are asked to give up rights to the monies they are owed, in exchange for an offer by the company to pay a percentage of the total debt (i.e. so many cents on the dollar) over time or sometimes as a lump sum payment.

• In a successful Proposal, the company wins because it survives, free from the burden of its debts.
• The creditors win because they retain a customer and get some of their money repaid, whereas in a bankruptcy they are likely to receive very little.

If you are a business owner having difficulty paying yourself a salary from your business or are falling behind in debt payments or tax obligations such as GST, employee source deductions, or income tax remittances, a Division 1 Proposal could be an option for your business.

How is a Division 1 Business Proposal Structured?

Division 1 Business Proposals are normally structured as a payment plan over a set period of time, or sometimes as a one-time lump sum payment, however, Proposals can be flexible and as creative as needed – no one size fits all! Since one of the few requirements is that the business’ Proposal must offer more to creditors than a bankruptcy, this allows for a wide range of Proposal terms to be considered.

As a Proposal is a transparent, legally-supervised process, there may be other circumstances where a Proposal can make sense, beyond solely helping a business continue as a going concern. For example:

• A Proposal could be used to wind down a company with the business owner in control, or to conclude non-profitable arms of a business.
• A Proposal could also be used to sell non-performing assets in an asset-rich, cash-flow poor scenario.

Before eroding your personal assets or net worth to finance your company obligations, talk with a local Licensed Insolvency Trustee confidentially at no cost to discuss your situation and business debt solutions.

What Does a Licensed Insolvency Trustee Know about Saving a Business?

Many Licensed Insolvency Trustees are also designated accountants (CA/CGA/CMA), Management Consultants (CMC), and Chartered Insolvency and Restructuring Professionals (CIRP) with years of professional experience assisting businesses in financial difficulty.

Does it Cost Money to Talk to a Licensed Insolvency Trustee? 

A Licensed Insolvency Trustee can offer a fresh perspective, experience, and a full toolbox of options to solve your business’ debt challenges. Confidential initial consultations are offered at no cost or obligation.

What Would be Discussed in the Initial Meeting? 

The first goal when speaking with a Licensed Insolvency Trustee is often to determine if the business is worth saving. 

• In assessing the viability of a business, together we’ll review the operations of the company, its financial statements and its ability to generate cash flow.
  • The amount of cash-flow a company can generate, and the value of its assets is a key factor in determining the options business owners have.
• In order to provide you as much assistance as possible, we suggest that you prepare a list of your business creditors and most recent company financial statements for your initial consultation.

When Should a Business File a Division 1 Proposal?

Generally, a company might consider filing a Proposal when it becomes difficult to pay its trade accounts, payroll or other bills. The sooner the business’ financial standing can be professionally assessed, the greater its chances of survival.

Some common business owner reactions to a shortage of business funds are to:

• Apply for more credit.
• Inject personal equity (cash or assets) to fund or support the business.
• Make the mistake of delaying payment to Canada Revenue Agency (“CRA”) for GST or employee source deductions.

Rather than solving the debt problem on a long-term basis, all three of these actions tend to increase the business owner’s personal liability associated with the company.  

Learn More About Business Debt Mistakes to Avoid

What Creditors Should Every Business Owner be Aware of?

Business owners should be aware of all the company’s creditors, including those that give rise to director liability and/or personal liability. Common examples are:

• GST/source deduction debts to Canada Revenue Agency.
• Personal guarantees, whether to a bank, credit card, landlord, or trade creditor.
• Wages owed to employees.

When Would a Business Not be Worth Saving? 

Usually, a business is not worth saving through restructuring if the company is suffering continual losses and there are no apparent solutions to return it to profitability. In this situation, a voluntary business bankruptcy may be an option to write-off the business debts. 

Key Steps in a Division 1 Business Proposal

1. Notice of Intention to Make a Proposal

If a company fears that a creditor is going to take some action to shut the company down, such as obtaining a judgment or seizing assets, the company can file a Notice of Intention to Make a Proposal with the assistance of a Licensed Insolvency Trustee.

• The Notice of Intention to Make a Proposal is a legal document and upon its filing a “Stay of Proceedings” is started.
  • A Stay of Proceedings is essentially a “timeout” and protects the company by preventing creditors from taking any further collection action against your company.

2. File a Proposal

The company works with a Licensed Insolvency Trustee to formulate a Proposal. Once the Proposal is finalized it will be sent to your creditors by the Licensed Insolvency Trustee so they can consider the offer and vote in favour of or against the Proposal.

3. Meeting of Creditors to Consider the Proposal

Creditors vote on the Proposal by mail or in person at a meeting of creditors, which is held approximately three weeks after the initial Proposal is officially filed.

• The Licensed Insolvency Trustee must file a report to the creditors about the affairs of the company and causes of the company’s financial difficulties.
• The Licensed Insolvency Trustee must also present to the creditors his or her estimate comparing how much money the creditors would receive under both the Proposal and a bankruptcy. (Remember, the Proposal must provide creditors with more money than a bankruptcy.)

If the Proposal is accepted by the creditors and subsequently approved by the Court then all unsecured and secured creditors to whom the Proposal was made are legally bound by the terms of the Proposal – this includes any creditors who did not vote in favour of accepting the Proposal.

• For a Division 1 Proposal to succeed, a majority in number of creditors, and two-thirds in value of debt, must vote to accept the Proposal.
• In the event that the Proposal does not receive the required votes to pass the Proposal then the company is entered into bankruptcy, effective the date of the creditors’ meeting.

4. Complete Proposal

Once accepted, all creditors and the business must adhere to and complete the terms of the Proposal. The business has now achieved a ‘second chance’ at success. 

Still not sure if a Division 1 Proposal is the right solution for your business? Talk to a Licensed Insolvency Trustee today to explore your options.

The post Division 1 Proposals for Business Debt appeared first on Sands & Associates.

Canada’s Number One Alternative to Bankruptcy: A Consumer Proposal

In Canada consumers have two legal debt solutions available to them – personal bankruptcy, and a special type of debt consolidation called a Consumer Proposal.

A Consumer Proposal can offer many benefits in dealing with your debt and providing debt relief, allowing you to consolidate and cut your debt without having to file for bankruptcy. This unique option is only available with the help of a Licensed Insolvency Trustee.

How a Consumer Proposal Consolidates and Cuts Debt – Without Bankruptcy

A Consumer Proposal will combine your debts and you’ll work with a Licensed Insolvency Trustee who will prepare and coordinate your offer to repay your creditors the portion of your debt that you can afford over a period of up to five years, in full settlement of your debt.

• You may be able to cut your debt by up to 50-80%, and you can manage virtually all types of debt through a Consumer Proposal, from credit cards to Canada Revenue Agency debt, to student loans and more.
  • Consumer Proposals are the only way to reduce government debts, besides declaring bankruptcy.
• A Consumer Proposal is not a loan, and your credit history is not a qualifying factor.
• No interest will be charged to you on the debt you are repaying.

Your Licensed Insolvency Trustee will work with you as you decide how much you can afford to offer your creditors, taking your situation, needs and goals into consideration. When you’re ready, your Proposal will be sent to your creditors so they can consider your offer, and after your Proposal is accepted, your creditors will receive their payments through your Licensed Insolvency Trustee.

Making a Consumer Proposal – Step by Step

• If a simple majority (i.e. 50% or more) of your creditors (by dollar value) accept your Proposal, it is legally binding on all creditors, even those who didn’t respond or vote in favour of it.
• Filing a Consumer Proposal means your Licensed Insolvency Trustee steps between you and your creditors, so your creditors are no longer allowed to ask you for payments or try to collect money from you.
• Licensed Insolvency Trustee’s fees are set by government tariff and paid from the funds received by creditors. There is no additional cost to you the individual, besides what you offer your creditors in the Consumer Proposal.

Other Alternatives to Personal Bankruptcy

In addition to making a Consumer Proposal, you might consider one of these other options mentioned below to help you manage your debt without bankruptcy.

Whereas a Consumer Proposal only requires you to repay a portion of your debt to settle the balances in full, with no interest or added fees, other common types of debt consolidation do not reduce your balance, and you can expect to pay interest and/or added professional fees.

How Interest Rates Affect Your Debt and Payments

Pay Back Your Debt Through a Consolidation Loan

A lender may be willing to give you a consolidation loan to help you streamline your debt repayment. Typically, the new lender will pay off the individual creditors and you will then owe the new lender for this combined balance, plus interest charged by the new lender.

• The intended goal of a consolidation loan is normally for you to reduce the interest rate at which you repay your debt.
  • Often consolidation loans can reduce interest payments from 19-29% annually on a typical credit card down to approximately 10-15% annually on a consolidation loan.
• The new lender may require you to pledge an asset, such as a vehicle, as collateral for the consolidation loan, and/or require you to find a co-signer to further guarantee repayment of your loan.
  • It can be difficult to qualify for debt consolidation financing if:
    • You do not have an asset to pledge
    • You do not have a co-signer who will agree to be sign on with you
    • Your income is low, or inconsistent
    • Your credit rating isn’t high

Repay Your Debt Using a Credit Counselling Debt Management Plan

Private and non-profit credit counsellors may help you arrange a consolidated debt settlement with your eligible creditors, sometimes called a ‘debt management plan’. The credit counsellor will attempt to negotiate individually with each creditor to allow you to repay all your debt over a period of up to five years, sometimes without interest.

When considering credit counselling debt management plans, it’s important to be aware of the following:

• Not all creditors will work with credit counsellors, most notably Canadian and Provincial government organizations. If you owe Canada Revenue Agency for example, you will need to deal with this creditor and debt outside your credit counselling debt management plan (and any other who do not agree to your plan).
• There is no legal protection with this type of ‘informal’ debt management plan, so creditors can still pursue you for payments, and if you don’t make your payments on time the plan may be cancelled.
• All credit counsellors charge some type of fee for their services or programs, which you will pay on top of repaying your debts to your creditors.
  • You may find credit counselling difficult if:
    • You cannot afford to repay all your debts in full, plus the service fees
    • Some of your creditors will not agree to the plan and will continue to pursue you for payment
    • You have government debts

Questions to Ask Your Credit Counsellor About Their Services and Plans

Get Advice About Your Debt and Debt Options

If you’re considering your options to manage your debt, the best thing to do is talk with a Licensed Insolvency Trustee local to your area. In just 30 minutes we can help you understand your situation and all the options you have available to you.

Once you have clarity about all of the benefits of each debt resolution option you can confidently make an informed decision and move forward with the solution that best fits your needs.

Sands & Associates’ caring debt help experts are here for you, with support and solutions – and without judgment.

The post Alternatives to Personal Bankruptcy appeared first on Sands & Associates.

• Every day we provide debt advice and guidance to consumers with a range of needs, and a common thread is that “knowing is not owing” – people need to have the facts so they can make informed decisions about their unique situation.
• Even if you don’t consider your debt a problem, it’s important to understand your rights and responsibilities – owing money is stressful, there are many ins and outs when it comes to debt, and unfortunately what you don’t know can hurt you financially.

Read on as we break down 10 of the most common consumer debt myths and misconceptions. 

Myths About Debt You Owe

Myth: Creditors Can Always Sue You Over a Debt Owed

Fact: Canadian law sets out a statute of limitations on debt.

In BC, the Limitations Act caps the period of time a creditor has to take legal action against you (i.e. sue you) for a debt you owe. What this essentially means is that while the debt does remain payable, if it has been two years or more since you made a payment or acknowledged the debt in writing, then your creditor may not have further recourse to collect the debt from you, beyond putting notations on your credit history and sending you mail.

Myth: Co-signing Debt Makes You Responsible for Half

Fact: By co-signing a debt, you become equally responsible for repaying 100% of the unpaid balance to the lender.

When you co-sign a debt, if the original borrower doesn’t pay back the debt the lender can demand that anyone listed in the loan or agreement (i.e. the co-signer/co-borrower) repay the entire balance – not half. This type of liability is known as ‘joint and several’.

• Read your applications and lending agreements carefully to understand the terms of borrowing and who is responsible for what – these can change depending on the lender and whether they are considering an application/account for “additional cardholders” or “co-borrowers/co-applicants.” Always check the fine print!

Myth: Marrying Someone Makes You Responsible for Paying Their Debt

Fact: One spouse is not responsible for repaying the debts of the other spouse solely by virtue of marriage or cohabitation.

You are responsible for repaying debts you’ve co-signed for or taken on jointly (as discussed above), or debts triggered as marital debts by the act of separation under the Family Law Act. You cannot be suddenly made liable for a debt owed solely by your spouse just because you got married. Essentially, there is no way to “marry into” a debt.

Am I Responsible for my Spouse’s Debts? Learn More

Myth: You Should Always Buy Insurance Protection

Fact: Credit card balance protection insurance often isn’t “worth” its cost.

Some banks are quick to sell and aggressively promote various insurance products, and while some are worthwhile considerations, like life insurance for a young family, others provide little value in most circumstances – one of these Licensed Insolvency Trustees often caution against is ‘balance protection insurance’.

• Even if you don’t carry a balance each month you pay fees into this product, which can be as high as 1% of the purchases on the card. Over the course of one year, this could take a 20% credit card interest rate to more than 32%.
• The other issue is that in most instances where you’d expect the insurance to help, it does very little. For example, if you lose your job, it may cover the minimum payments for the period you are unemployed – but very little of these payments will reduce the balance you owe on the card.

Myth: Incorporating Your Business Fully Protects Owners Personally

Fact: While corporations may protect owners from their debts to some degree, there is still a personal liability created for certain debts that cannot be avoided.

This personal liability can include debts such as:

• Wages; GST and payroll remittances
• Debts you have signed a personal guarantee for

Many business owners are aware that essentially any debts a sole proprietor or partnership business accumulate are payable by their owners, since there is no distinction between business and owner, but unfortunately, some business owners have a false sense of security when it comes to protecting their personal assets and liabilities if they incorporate their business.

Myths About Managing Debt

Myth: There’s No Forgiveness or Renegotiation Option for Government Debts

Fact: You can have government debts reduced and cleared by filing a Consumer Proposal (or forgiven through bankruptcy).

A Consumer Proposal is a legal debt consolidation remedy that can be used to stop all interest, reduce amounts owing by up to 50-80%, and work out a payment plan for what you can afford to repay. Government debts like taxes, business GST, student loans, benefit overpayments and more – plus debts like credit cards, payday loans, lines of credit, etc. can all be dealt with using this powerful tool, which will also halt a wage seizure or bank account freeze.

Myth: Minimum Payments on Credit Cards are Enough

Fact: Making just minimum monthly payments may keep your account in good standing, but it’s not enough to get debt paid off without incurring considerable interest costs.

Many individuals fall into a trap of just making the minimum payments on their credit cards and assuming that they are making progress towards getting their debt paid off. The reality is that at 20% interest, making minimum monthly payments on a $10,000 debt could take more than 25 years to clear and will cost more than $12,000 in additional – and avoidable –  interest charges.

• Banks must disclose exactly how long it will take to pay off a debt if you make only the minimum payments, so you can see this breakdown on your own bill.
• If you can only afford minimum payments each month, you very likely have a debt problem and should talk with a Licensed Insolvency Trustee as soon as possible.

Compare Your Debt Options

Enter your total amount of debt (excluding mortgage and car loan) and we’ll show you a list of options.

Myth: Your Credit Score is a Reliable Indicator of ‘Financial Health’

Fact: A credit score is essentially a numeric rating used by lenders to determine whether they will loan money, and at what cost.

Part of the problem with taking a ‘good’ credit score as an indication of financial and debt health is that habits that drive a high rating are often at odds with habits that lead to financial success. Since a credit rating mostly measures whether you pay your bills on time it considers nothing about whether those bills are too high or if you have any savings or assets at all.

Myth: Debt Consolidation Must be Done by Borrowing

Fact: You can consolidate your debt without borrowing or interest by making a Consumer Proposal.

Many people considering how to manage their debts believe their options amount to consolidation loans, credit counselling programs, or bankruptcy – but these are not your only options!

• Consumer Proposals are an effective debt solution that allows you to consolidate your debts, repaying what you can afford, with the unpaid balance being forgiven by your creditors.
• This consolidation option requires no borrowing and interest charges (such as a consolidation loan), nor require you to pay added professional fees (such as credit counselling).

Myth: Canada has Government-Sponsored Debt Relief Programs

Fact: The Canadian government does not offer grants or programs for personal debt repayment other than the options provided by a Licensed Insolvency Trustee.

The Canadian government does not have government grants or debt programs available, but it does regulate legitimate legal debt relief options that are available through Canada’s designated debt help professionals – Licensed Insolvency Trustees – namely Consumer Proposals (to consolidate and cut debt) and bankruptcy (to get debt forgiveness), as well as some student loan relief administered through Canada Student Loans.

Get Information and Advice About Your Debt and Debt Options 

The best and safest way to get accurate information about debt, and your debt options and resources, is to reach out directly to a Licensed Insolvency Trustee local to your province and ask to have a free consultation – you don’t need a referral to talk confidentially with us.

• Sands & Associates is available for help seven days a week and we have options for in-person appointments, as well as full support over the phone and online videos.
• In about 30 minutes you should have a clear understanding of your situation and next steps in the debt solution you decide best fits your needs. Knowing is not owing! 

Get solutions, support, and a debt-free plan that’s right for you.

The post Debunking Common Consumer Debt Myths appeared first on Sands & Associates.

• Virtually all your debts can be included in a Consumer Proposal, everything from credit cards to payday loans, outstanding taxes to student loans and more.
• Typically creditors will agree to accept repayment of 20-50% of your balance to consider the debt fully settled, and interest charges are automatically frozen.
• You’ll have up to five years to pay off the agreed amount of debt, usually via monthly payments.
  • For example, if you owe debts totalling $25,000 you might offer to pay $210 a month for three years (36 months), repaying a total of around $7,500 to cut your debt by 70%. The balance of the debt is legally eliminated at the end of the Proposal.

Filing a Consumer Proposal can be a great way to streamline your debt repayment, and despite being a legal solution, the process is generally straightforward. Read on to learn details around how a Consumer Proposal works, and some of the ways a Consumer Proposal does and doesn’t impact you.

Key Ways a Consumer Proposal Will Affect You 

A Consumer Proposal Provides Protection from Creditors

When your Consumer Proposal is filed it acts as a shield to protect you and your assets from your creditors. This Consumer Proposal effect is an especially welcome relief to anyone worried about overdue payments or outstanding accounts since a Consumer Proposal will:

• Stop creditors from contacting you for money, and stop all collection activities that may have been happening.
• Halt legal action creditors may have been taking against you.
• Immediately remove wage garnishments or account freezes (even from the government).

A Consumer Proposal Restructures Your Debt Payments

Because a Consumer Proposal will consolidate (and cut) virtually all your debts, rather than juggling multiple accounts and payments, you’ll have one simple (usually monthly) payment to make to your Licensed Insolvency Trustee.

• Since your debt may be cut by up to 50-80% with no interest charges or added fees, Consumer Proposals usually save people paying off debt a considerable amount of money and time.
• Most people opt to handle payments for ‘secured debts’ that are in good standing outside their Consumer Proposal, so normally a Consumer Proposal won’t include secured debt agreements you’ve decided to continue paying, such as your mortgage or vehicle financing.
  • Many clients find themselves in a much better position to continue to make payments on their home mortgage or car loan after they have significantly reduced their other consumer debts through a Consumer Proposal.

Book Your Free Consultation

A Consumer Proposal Temporarily Affects Your Credit Rating

Like other types of debt consolidation or settlement, filing a Consumer Proposal does temporarily reduce your credit score. Here’s what you should know:

• Your Consumer Proposal will be noted on your credit history for three years after the debts included in your Proposal are paid off – or – for six years from the date your Proposal started, whichever is soonest. This is often considerably less time than it would take you to pay off your debt on your own.
• You can seek new credit any time, even while your Proposal is active, and most people are able to get basic things like a credit card shortly after filing their Proposal.
  • Secured or prepaid cards can also be good alternatives to have the convenience of a credit card but enjoy the break from debt accounts.
    • Keep in mind that a secured card, rather than a prepaid card, will normally provide updates to credit bureaus to help you rebuild your credit after filing the Consumer Proposal.
  • If your mortgage comes up for renewal during your Consumer Proposal this shouldn’t be an issue, provided it is paid up to date.

Many people worry about whether consolidating their debt with a Consumer Proposal will have a long-term (or even permanent) impact on their credit score, but the reality is that the effect is generally far less severe than they fear, and for most people the benefits far outweigh the temporary inconvenience.

• It’s also important to know that despite a ‘good’ credit score, many people dealing with a debt problem can’t get help from their bank to deal with their debt, notwithstanding that they may have a high credit score and are not missing payments.

Key Ways a Consumer Proposal Will Not Affect You 

A Consumer Proposal Doesn’t Make Your Spouse Pay Your Debt

Filing a Consumer Proposal should not affect your spouse in any way unless they have co-signed or guaranteed debt together with you.

• Having a spouse or common-law partner does not on its own trigger a shared liability with the other spouse/partner, nor does it give your creditors recourse to ask them for payments, nor mean they must do a Consumer Proposal too.
• Unless you’ve given your creditor means to collect from both of you by taking on joint debt or triggered a division of “family debts” by separating or divorcing, your spouse isn’t responsible for repaying your debt.
• Your financial responsibilities are in fact so separate that where there is no co-signer, guarantor, or co-cardholder, it is possible for one spouse to file a Consumer Proposal without the other one being aware, as typically only creditors are notified of your Proposal.

Book Your Free Consultation

A Consumer Proposal Doesn’t Affect Your Employment

For most people a Consumer Proposal in no way affects their job and you can change jobs or switch careers at any point.

• Overall, the Consumer Proposal process is very private and in normal circumstances your employer is not notified about your Proposal unless your wages are being seized – this is because your Licensed Insolvency Trustee will contact your payroll department to halt the garnishment when your Proposal starts.
• If you still need reassurance that a Consumer Proposal won’t impact your employment, know that the federal Bankruptcy and Insolvency Act, which governs Consumer Proposals, specifically states “No employer shall dismiss, suspend, lay off or otherwise discipline a consumer debtor on the sole ground that a consumer proposal has been filed in respect of that consumer debtor.” (S. 66.36)
• Also, for business owners – you can be self-employed during a Consumer Proposal, including being the director of a corporation.

A Consumer Proposal Doesn’t Take Away Your Tax Refunds

A Consumer Proposal doesn’t impact how you file your tax returns or cause you to ‘lose’ your tax refund or other tax credits you may be eligible for, even if you included a prior income tax (and/or business GST) balance owing to Canada Revenue Agency in your Consumer Proposal.

• While your Consumer Proposal is active you’ll need to ensure your tax returns are filed up to date and that any balances owing from these new returns are paid.
• If you regularly owe money to Canada Revenue Agency a clause may be added to your Proposal that allows you to include the exact amount you owe for income taxes up to the date you start your Consumer Proposal, even if that tax return isn’t yet due.

Book Your Free Consultation

A Consumer Proposal Doesn’t Prevent Immigration Sponsorship 

If you have a Consumer Proposal you can still apply to sponsor someone to immigrate to Canada, bearing in mind that you should always refer to the Government of Canada for the latest rules and guidelines. This is an important distinction between Consumer Proposals and bankruptcy, as a person who has not yet been discharged from bankruptcy will need to wait until their bankruptcy is finished before making an application to sponsor immigration to Canada.

• Neither a Consumer Proposal nor bankruptcy prevent you from applying for citizenship in Canada, nor from leaving the country (for vacation or permanent relocation) – just be sure to keep your Trustee informed as to your address if you move before your Proposal or bankruptcy are complete.

Is a Consumer Proposal a Good Solution for Me? 

For people who owe debt totalling less than $250,000 (excluding their mortgage), and want to make their debt payments more manageable, a Consumer Proposal is one of the best debt consolidation options available.

If you’ve been wondering about a Consumer Proposal but worried about navigating any aspects of the process, be sure to talk with a Licensed Insolvency Trustee about your concerns. It’s vital that you have all the facts about how to deal with your debt and the opportunity to explore all your options together with a qualified professional.

• A Consumer Proposal can only be filed by working with a Licensed Insolvency Trustee. We are Canada’s only official debt help professionals and Licensed Insolvency Trustees alone are qualified and endorsed to help you make a Consumer Proposal.
• Consumer Proposals are a unique debt solution – they are not the same as bankruptcy, nor are they the same as credit counselling or other types of informal debt settlement plans.
• If you’ve been advised against a Consumer Proposal by anyone besides a Licensed Insolvency Trustee, it is recommended you contact a Licensed Insolvency Trustee for a second opinion.

You can connect directly with a Licensed Insolvency Trustee local to your province and ask to have a free, confidential consultation to talk about your situation and options.

• Sands & Associates serves all of BC and our Licensed Insolvency Trustees and Insolvency Estate Managers are available to talk with you seven days a week. In just half an hour we can help you better understand your situation and choose the debt-free plan that’s right for you.
• You’re welcome to talk with us confidentially over the phone, by online video, or in person at a local office near you – whatever you find most comfortable and convenient.

You are not alone in finding a way to move forward – we’re here for you with support and solutions.

Talk with a local Sands & Associates Licensed Insolvency Trustee today and find your best debt solution.

Book Your Free Consultation

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Read on to learn more about who we are, what makes Sands & Associates different from other debt help professionals, and some of our proudest achievements over the past 35 years.

Sands & Associates – Founded in 1990

Sands & Associates was founded in BC’s lower mainland in 1990 by Bankruptcy Trustee Earl Sands and later expanded to include six offices throughout the greater Vancouver area. In the coming years Sands & Associates would grow to an extensive network of local offices across the province, recognized as BC’s best, award-winning Licensed Insolvency Trustees.

BC-Wide Debt Help Services

Unlike many large national debt relief organizations, Sands & Associates focuses solely on debt help services for consumers and small business owners. We are the largest firm in BC to take this specialized approach, offering our services and advice with respect and understanding – we know that debt-stress can deeply impact people, and a debt problem can happen to anyone at any time.

• Sands & Associates is proud to be able to help people complete their debt-free journey, from consultation to debt-free, whether from the comfort of their own home, or in-person at a local Sands & Associates office near them.
• By embracing the connection technologies available we are helping to ensure that debt relief services are accessible to everyone, removing in-office service barriers and constraints.

What to Expect

Sands & Associates Clients

Our team values the trust people place in us when they look to our professionals for support and solutions to take control of their finances and move towards brighter, debt-free days.

Many people worry there are no solutions to their debt problem, and we are exceptionally grateful for our clients who have chosen to come forward over the years and share their words of reassurance and encouragement to others who may be facing a similar situation, and those who share their deeply personal stories about how they found a financial fresh start.

Read Client Reviews

Whether you are seeking information about a debt resource, or exploring specific debt solutions, we aim to provide a “five star” experience from start to finish, treating everyone with dignity and respect.

The post We Help with Debt – 35 Years and Counting appeared first on Sands & Associates.

How Do I Qualify for Bankruptcy Debt Relief?

Bankruptcy is a legal process intended to provide honest but unfortunate individuals relief from unmanageable debt and a financial fresh start. In Canada, there are few criteria that need to be met to qualify for the debt relief bankruptcy offers.

Whether bankruptcy is the best option will depend on the individual’s unique circumstances, but, in general, a person may be eligible to declare bankruptcy if they are insolvent and owe at least $1,000 of debt.

If you think it seems simple to qualify for bankruptcy, you’re right; Canada’s bankruptcy legislation (the Bankruptcy and Insolvency Act) is intended to give straightforward, accessible relief to people who need it.

• There is no requirement for you to be delinquent in your payments or to have a ‘low’ credit rating to consider bankruptcy for debt relief. In fact, most people who declare bankruptcy have never missed a payment and have a fair credit score.

Just because you meet the qualifiers for bankruptcy doesn’t mean this is your best – or only – option. For example, it usually wouldn’t make sense to file for bankruptcy if you only owed $1,000. When evaluating if bankruptcy is an appropriate solution, a Licensed Insolvency Trustee will take other factors into consideration too, including (but not limited to) your income, the amount of debt you have, and other specific challenges you may be facing.

In fact, most people who seek a Licensed Insolvency Trustee for bankruptcy services discover that making a Consumer Proposal to consolidate and cut their debts is actually a better option than filing for bankruptcy.

When is Filing for Personal Bankruptcy the Best Option?

How the Personal Bankruptcy Process Works in Canada

A person can be released from almost all their debts through bankruptcy and the vast majority of personal bankruptcies in Canada are ‘voluntary’ bankruptcies, which means that the person who is struggling with their debts seeks bankruptcy aid. It is extremely rare for an individual to be legally ‘forced’ into bankruptcy.

From there, your Licensed Insolvency Trustee will contact your creditors to let them know about your bankruptcy. By law your creditors will be required to:

• Freeze your debt balances and stop charging you interest.
• Refrain from contacting you for payment, and collections and any legal actions will also stop – this includes bank account freezes and wage garnishments (even from creditors such as Canada Revenue Agency).

You’ll begin working on a few key duties that will allow you to successfully complete and receive an official discharge (release) from bankruptcy. In most cases this takes only nine months from start to finish. You can generally expect to:

• Keep a monthly budget detailing the income and expenses of your household.
• Provide your Licensed Insolvency Trustee the information and documents needed to file your taxes for the year your bankruptcy starts.
• Have two private, one-on-one financial counselling sessions with a Qualified Insolvency Counsellor who works with your Licensed Insolvency Trustees.
  • These meetings are an opportunity for you to get support in a variety of financial areas like credit ratings, budgeting, savings and more.
• Pay the bankruptcy administration fee.
  • In most cases you could expect this to total $2,700 and most Licensed Insolvency Trustees will allow you to pay this via affordable monthly payments.
• Stay in contact with your Licensed Insolvency Trustee, letting them know if you move or your household experiences a significant change.

• Some common debts that will survive bankruptcy include outstanding and ongoing child support and alimony payments, court ordered fines, and student loans if you stopped being a student within seven years of your bankruptcy (special hardship provisions may be available if you stopped school within five years).
• If you had an ongoing mortgage or vehicle financing when you started your bankruptcy, you may have decided to continue making payments on these ‘secured’ debt(s) to keep the asset(s).
• There are specific federal and provincial laws in place to safeguard key assets, and most people keep all their assets in bankruptcy.

Bankruptcy Alternatives – Learn About Making a Consumer Proposal

If you owe $1,000 or more and want to get out of debt, bankruptcy could be one solution, but there may be others to consider. The same legislation (the Bankruptcy and Insolvency Act) that sets out how bankruptcy works also provides for another legal debt solution – a Consumer Proposal, the top bankruptcy alternative in Canada.

Consumer Proposals can be a great option over bankruptcy and consolidation loans, especially where a person can contribute some repayment towards their debts but is perhaps unable to repay their entire debt plus the ongoing interest charges. Here’s how a Consumer Proposal works:

During a free, confidential consultation with a Licensed Insolvency Trustee in your province, you’ll work together to discuss your personal circumstances and come up with a customized repayment plan that is affordable for you.

• A Consumer Proposal can consolidate virtually all types of debt, from credit cards to payday loans, lines of credit, overdrafts, and government debts like income tax balances, business GST, credit overpayments and more.
  • You can continue making payments on your car or mortgage outside of your Consumer Proposal if you wish to do so.
• You’ll offer to repay a portion of your debt that’s affordable for you over a period of up to five years, and your creditors will agree to forgive the unpaid balance and stop all future interest charges. You may be able to cut your debts by up to 50-80%, interest-free.
  • For example, if you owe $25,000 of debt your Consumer Proposal might be to pay $7,500 (30%) by way of monthly payments of around $210 for 36 months.

Compare Your Debt Options

Enter your total amount of debt (excluding mortgage and car loan) and we’ll show you a list of options.

• Most people will repay the 20-50% of their debts by making monthly payments, and the entire Consumer Proposal will be coordinated and administered directly by your Licensed Insolvency Trustee.
  • Like in bankruptcy, your creditors will no longer be able to contact you for payment or continue collection actions including wage garnishments.
• You’ll have the opportunity for two private credit counselling sessions focused on credit building, budgeting, etc. and your Licensed Insolvency Trustee will be available for ongoing support throughout the Consumer Proposal process.

What Debts Can a Consumer Proposal Consolidate? Learn More

Qualifying for a Consumer Proposal is also very easy – you’ll need to owe between $1,000 and $250,000 (not including mortgage debts) and be insolvent.

• If you’re filing a joint Consumer Proposal (together with your spouse for example), this limit doubles to $500,000.
  • For people who owe more than this a different type of Proposal is available, with some slight differences to the overall process.
• A Consumer Proposal is not a new loan or financing, so there is no credit check and your credit rating is not a factor at all. This is especially welcome news for people seeking consolidation options who may be otherwise hindered by a low credit score.

Get More Information About Your Debt Relief Options

If you’re facing financial challenges, the best thing to do is to talk with a Licensed Insolvency Trustee. During a non-judgmental, confidential, one-on-one meeting we’ll help you evaluate your situation and all possible debt solutions including but not limited to Consumer Proposals, bankruptcy, credit counselling and more. You’ll learn the ins and outs and decide on the course of action you feel is best for your circumstances.

• It’s important for consumers and business owners to understand that Canada has only one government-qualified and endorsed debt help professional – Licensed Insolvency Trustees, and the solutions we can help you access are the only options that can allow you to have your debts legally reduced and forgiven.
• You do not need a referral to speak with a Licensed Insolvency Trustee, and Licensed Insolvency Trustees across the country will offer you a free consultation to talk about your options. It should never cost you to money to talk about your debt solutions.

If you have been offered debt advice or even advised against a Consumer Proposal or bankruptcy by anyone other than a Licensed Insolvency Trustee, it is highly recommended to get a second opinion from a Licensed Insolvency Trustee. Laws and resources around consumer debts and debt solutions are ever-changing and it’s important you have the opportunity to find out the facts from a qualified debt expert.

Discover your debt solution and move forward with your life – book your confidential, free debt consultation with Sands & Associates today.

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What Professionals Offer Consumer Debt Management Services in Canada?

There are two types of debt help professionals in Canada: Licensed Insolvency Trustees and informal debt service providers, who may use many different titles.

• Titles like credit counsellor, debt advisor, or debt consultant are not regulated ‘professionals’ and anyone can use these names to purport to offer debt management and related services.

Licensed Insolvency Trustees: Established as Canada’s only official debt help professionals and the people who can administer legal solutions that allow you to have some, or all your debts forgiven.

• Common debt solutions and relief Licensed Insolvency Trustees provide to individuals include Consumer Proposals (a specialized type of non-borrowing consolidation where you can consolidate and cut your debt without interest or added fees), and personal bankruptcy for full debt forgiveness.
• With a Consumer Proposal you can avoid both bankruptcy and more borrowing – and:
  • Consolidate and cut virtually all types of debt, from credit cards to tax debt, CERB overpayments to payday loans, overdrafts, student loans and more.
  • Offer to repay what you can afford (often as little as 20-50% of your total balance) over a period up to five years, and creditors will agree to forgive the unpaid balance so you can move on with your life.
  • Pay no further interest, consolidation costs, or professional fees.
  • Legally protect your assets and stop creditors from pursuing you for payments (including garnishments and seizures by even government creditors such as Canada Revenue Agency).

Consumer Proposals are an advantageous debt solution of choice for people who may have previously considered filing for bankruptcy, or are looking at costly consolidation loans to manage their debt.

Credit Counsellors: May offer different types of debt help services through for-profit and non-profit organizations.

• Although they may include free education as part of their offerings and resources, credit counsellors charge for their debt management services (such as monthly debt repayment plans) and these costs may include: Fees for initial set-up, monthly maintenance, application, membership, and more.
• You may need to pay fees even if creditors refuse to negotiate or make a deal with you through your credit counsellor.

Debt Consultants: These agents may operate in a few ways, one by offering debt settlement services like a credit counselling repayment plan, another is by acting as an agent for a person who wants to work with a Licensed Insolvency Trustee on a Consumer Proposal.

• Some credit counsellors and debt consultants may say they are certified by an accreditation body, but there is no certification body in the debt advisory sector that is widely recognized or reputable.
• Agents may hold a business registration and pay license fees to operate as a debt repayment agency, but this is not the same as being part of a fully regulated profession.

Insolvency filings across the country are on the rise as consumers face a slew of financial challenges contributing to problem debt. At the same time, the Government of Canada has published observations about debt advisor services, flagging specific concerns about the risks unregulated advisors pose, especially where consumers are looking for Consumer Proposals and bankruptcy relief.

Should I Work with a Debt Settlement Agent or Credit Counsellor? What’s the Difference?

Misleading Debt Services Being Sold to Consumers

Over the years consumers have endured predatory unlicensed debt services such as scammy companies operating US-based debt pooling, shady agents charging huge upfront fees without results, misleading quick-repair credit rebuilding services and more. Unfortunately, official efforts to curb these issues take time to have an impact and sadly, many consumers suffer the adverse effects before then.

Issues that have recently caught the Federal Government’s eye involve the debt advisory marketplace, and its impact in the insolvency system. There are several concerns within the industry, including consumers being sold and charged for what may be dishonest and less than transparent services, including:

• Being referred to a Licensed Insolvency Trustee (“LIT”) by a third-party agent.
• Insolvency advisory.
• Consumer Proposal exit loans.
• Insolvency filing insurance.

Consumers do not need a third party’s services to safely access impartial advice and solutions through a Licensed Insolvency Trustee. If you hire another advisor for services related to your Consumer Proposal or bankruptcy, understand these are completely unnecessary add-on services, and offered by agents who are not qualified to administer the Consumer Proposal or bankruptcy for you. 

Consumer Proposals are not loans and require no insuring, they are a legal type of debt consolidation solution only a Licensed Insolvency Trustee can administer for you. If you are offered or encouraged to use any type of financing to complete a Consumer Proposal, understand this is not only unnecessary, but counter-productive to cost advantages of a Consumer Proposal (namely, consolidation without borrowing or interest and stopping previous interest charges from accumulating).

Am I Working with a Licensed Insolvency Trustee?

The best thing to do is simply ask “Are you a Licensed Insolvency Trustee?”. You can also use the Government of Canada’s “find an active Licensed Insolvency Trustee” directory, and if you’re located in British Columbia, Sands & Associates can help you.

• It is against the law for an agent to say they can manage a Consumer Proposal (or bankruptcy) for you unless they are a Licensed Insolvency Trustee.

If you’re looking for debt help online, be aware that advertising can be misleading – ‘government approved’ ‘licensed’ and ‘fast credit repair’ are all examples of this. Beyond options a Licensed Insolvency Trustee offers, there is no government debt ‘program’, and ‘quick credit repair’ simply doesn’t exist.

• A Consumer Proposal (or bankruptcy) can ONLY be filed through working with a Licensed Insolvency Trustee, and, as noted – you do not need any sort of referral to connect with a Licensed Insolvency Trustee to explore or start the process.
  • If you’ve been advised against a Consumer Proposal by anyone other than a Licensed Insolvency Trustee, you should get a second opinion from a Licensed Insolvency Trustee.
• Your credit rating is related to your credit history, and building a credit history that demonstrates responsible credit use simply takes time and careful habits, such as:
  • Paying all your bills on time.
  • Keeping credit balances under 50% of your total credit limit.
  • Having a consistent employment history.

Understanding Credit Reports and Scores in Canada – Learn More

Recap – Key Takeaways for Consumers Seeking Qualified Debt Advice

1. Most creditor counsellors and all Licensed Insolvency Trustees will offer you a free consultation to help you come up with a plan to manage your debts – but it’s essential to understand:

If you choose to take advice from or work with any sort of debt help professional other than a Licensed Insolvency Trustee, there are considerable gaps in regulations and consumer protection.

• In BC some provincial guidelines exist around people who charge a fee to negotiate with a creditor on your behalf, but, legally, anyone can provide debt management advice services, and there is no federal authority regulating people calling themselves credit counsellors, debt agents and the like.
• Credit counselling organizations are heavily bank-funded, and some may promote their plans over other options you have, as they make money from creditors, usually a flat percentage commission of the debt they recover. Remember: Non-profit does not mean a charity, and it doesn’t speak to quality or reputation either.

2. No referral is required to talk with a Licensed Insolvency Trustee and receive qualified free, confidential advice about your situation and all your options. It is highly recommended that you connect directly with a Licensed Insolvency Trustee local to your province.

• Licensed Insolvency Trustees are professionals who provide specialized debt support and debt management services under the authority of federal regulations and legislation, operating without the limitations of credit counsellors and other debt agents.

Dealing with a debt problem can feel overwhelming, but you are not alone. Whether you are interested in consolidating and cutting debt with a Consumer Proposal, debt relief through personal bankruptcy, or aren’t sure what options are available to you – you can turn to a Licensed Insolvency Trustee for support and virtually all debt-related questions and concerns. 

• We will walk you through all options to address your debts including (but not limited to): various repayment and consolidation strategies, supportive resources, credit counselling programs, Consumer Proposals, and bankruptcy.

Sands & Associates’ full suite of debt advice and debt help services is available to consumers at local offices throughout BC, as well as over the phone, or online video – whatever is most comfortable and convenient for you.

Talk with a local debt expert and get a personalized debt-free plan that’s right for you. Book your free, confidential debt consultation today.

The post Unqualified Debt Advisors – What Consumers Need to Know appeared first on Sands & Associates.

The team of professionals at Sands & Associates is deeply committed to making a positive difference in communities across the province, providing resources, guidance, and expertise in a non-judgmental space and communicating with kindness in a straightforward approach. We believe that everyone deserves to make informed decisions and receive the necessary support to manage their finances confidently.

Our concept of supportive and empowering debt help services has been described as “Debt Smart with Heart” and it is our privilege to provide a safe space for people to talk about their financial challenges and help solve those issues. You owe it to yourself to get debt help – connect with a local Sands & Associates debt expert now.

Learn About Your Options with a Qualified Professional

Licensed Insolvency Trustees are Canada’s only debt help professionals fully qualified and federally endorsed to assist and guide consumers and business owners in assessing all their options to deal with debt, from debt consolidation services to debt relief solutions and more.

By connecting with a Licensed Insolvency Trustee local to your province you can safely get accurate advice about your situation and solutions to deal with your debt and move forward with your life.

• No referral is required to speak confidentially with a Licensed Insolvency Trustee and get advice about your situation, and information about solutions and resources to help you manage your debt.
• All Licensed Insolvency Trustees offer a free one-hour consultation for you to get one-on-one support and answers to your questions.

Many people struggle with asking for help, or don’t know where to turn for support, and we believe that normalizing conversations about debt and money problems is an important piece of taking the shame and stigma away from debt-stress. If you are feeling the strain or stress of debt – know that you are not alone, and that there are solutions.

Meet people who changed their lives working with Sands & Associates and hear their real stories

Who Do Licensed Insolvency Trustees Help?

Your financial situation does not need to be ‘bad’ to qualify for help from a Licensed Insolvency Trustee. Sands & Associates helps people across BC – any BC resident can have a free, confidential consultation to talk about their situation, needs, and get a plan to become debt-free.

Some common situations we help people resolve include, but aren’t limited to:

• You’d like general information about how you can pay off your debt.
• You need guidance about your legal rights or remedies in dealing with a specific debt or creditor.
• You are concerned about escalating collections or legal action by a creditor, such as a wage garnishment or bank account seizure.
• You feel trapped in a debt cycle or can’t make substantial progress in paying down your debt.
• You think you may need debt forgiveness or formal debt relief.
• You’re considering debt consolidation or some type of debt restructuring solution.

If you decide to move forward with a Consumer Proposal or personal bankruptcy, we can work with you throughout these processes, and if you prefer to work on a self-directed plan, we will provide you with information on any additional resources that can help you be successful.

What to Expect at a Debt Consultation with Sands & Associates

Whether you have a specific goal, concern, or general questions – your meeting will focus on reviewing your financial situation together and providing you with all the information you need to make a fully informed decision about a range of options to deal with your debt.

At Sands & Associates our goal is for you to understand the options that are available, assess which feels like the best fit for your situation, and together build your plan to get out of debt. Some of the possible debt management solutions we’ll discuss will include, but are not limited to:

• Focused do-it-yourself approaches such as: budgeting, prioritizing specific debts, utilizing available assets, resources such as BC’s statute of limitations, etc.
• Refinancing solutions and strategies.
• Debt repayment plans offered by credit counsellors and other types of informal debt agents.
• Consolidating and cutting debt with a Consumer Proposal.
• Personal bankruptcy, where full debt forgiveness is appropriate or other options unsuitable.

In under an hour you’ll get a personalized debt-free plan and have a clear outline of your next steps.

Debt doesn’t have to last forever – move forward with a debt-free plan that works for you. Book your free debt consultation today.

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If you are struggling to meet your payments and other debt options are unsuitable, bankruptcy may be the best way to eliminate your debts and ultimately move forward with a financial fresh start. Read on to learn about declaring and completing bankruptcy with help from Sands & Associates’ Licensed Insolvency Trustees.

3 Steps to Starting a Personal Bankruptcy with Sands & Associates

At Sands & Associates we aim to have your official debt-free plan launched in three steps, whether you move forward with personal bankruptcy, or a bankruptcy alternative like a Consumer Proposal.

You’re in control of the timeline of these steps. We understand that once you’ve made the decision to move forward with a debt solution you may want to get things moving right away:

• Sands & Associates can work with you to have your bankruptcy made official in as little as 24 hours after your consultation should you have an urgent issue.
• Absent a pressing situation, most people will move through the following three steps within a week or two.

Book Your Free Consultation

Step 1: Have a Free Confidential Debt Consultation

You’ll speak with a non-judgmental debt help expert at Sands & Associates. Together we can discuss any specific issues you are hoping to resolve, what debts you have, your general household and income situation, and any other details relevant to your circumstances.

Licensed Insolvency Trustees and Insolvency Estate Managers are uniquely qualified to discuss all your debt management options with you and help you weigh the pros and cons of each. We’ll review “do it yourself” strategies as well as borrowing options, non-legal avenues, and legal solutions.

• It’s important you get information about all your options so you can make a fully informed decision before moving forward. For example:
  • Many people who contact us seeking bankruptcy services find out bankruptcy is not the only solution that achieves the debt relief or protection they were seeking. More people actually choose to do Consumer Proposals to both consolidate their debt without borrowing – andhave partial debt forgiveness without filing bankruptcy.

Consumer Proposals VS Bankruptcy – Understand the Key Differences

Personal bankruptcy is a federally legislated process, with small differences depending on which province or territory you reside in. Your free consultation is key to ensuring you understand your options and how the process you choose will work for you and your unique situation.

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Step 2: Collect and Review Your Financial Information

If you decide to move ahead with bankruptcy Sands & Associates will prepare the required documents working closely with you. We will work together to complete a basic information form and gather relevant documents detailing your debts, income, and assets.

• We’ll have our second meeting together to go over these materials and gather any missing details. Don’t worry if paperwork is not something you’re confident with, we’re here to help you.

After this second meeting your Licensed Insolvency Trustee or Insolvency Estate Manager will prepare your bankruptcy documents.

Step 3: Sign Your Official Bankruptcy Documents with Your Licensed Insolvency Trustee

After you’ve signed your official bankruptcy documents (in-person and virtual appointments are available), your bankruptcy will be registered with a branch of Industry Canada called the Office of the Superintendent of Bankruptcy. This is the government body that provides oversight of all filings Licensed Insolvency Trustees do (all proposal types, bankruptcies, etc.).

Three steps done – your personal bankruptcy is signed, filed and official, and debt relief protections are all immediately in place!

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How to Finish Personal Bankruptcy

In Canada personal bankruptcy is usually a straightforward and short-duration financial process. You can generally expect privacy, and most people Sands & Associates works with retain all their assets and receive a discharge from bankruptcy in just nine months.

Here are some of the key things that happen during those nine months:

1. Once your bankruptcy is official your Licensed Insolvency Trustee will take over communications with your creditors, sending them notice (usually electronic) of your bankruptcy.

Bankruptcy’s legal protection is effective immediately and creditors included in your bankruptcy must stop contacting you for payment, charging interest and other fees, and halt legal actions including wage garnishments, bank account freezes and other collections.

• Your debt payments should have stopped by the time you sign your official bankruptcy documents.
• Creditors cannot prevent you from seeking the shelter of bankruptcy; they can’t simply “opt out” and continue pursuing you for repayment.
  • Borrowing agreements for debts tied to assets like a vehicle loan or mortgage should continue uninterrupted unless you decided not to keep these financing arrangements ongoing.

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2. You’ll complete a basic monthly budget form detailing your household’s income and expenses.

Using this ‘Statement of Income and Expenses’ budget, your Trustee will calculate whether your income is higher than the government’s low-income guideline. If so, you will asked to pay to the Trustee what’s called ‘surplus income’.

Surplus income (or lack thereof) will determine both how long you will be ‘in bankruptcy’ and how much you pay in bankruptcy each month. Usually:

• Surplus income means a bankruptcy term of 21 months
• No surplus income means a bankruptcy term of 9 months

3. Make regular payments to your Trustee for the cost of your bankruptcy (or surplus income).

Most people who anticipate having surplus income choose to do Consumer Proposals instead of bankruptcy, as they are often confident in being able to afford repaying a portion of their debt.

Compare the Monthly Payment of 4 Different Debt Solutions

4. Stay in touch with your Trustee and fulfill other key commitments to receive your discharge from bankruptcy.

These generally include:

• Completing two private financial counselling sessions one-on-one with a Qualified Insolvency Counsellor from Sands & Associates.
  • These 30-45-minute sessions focus on resources to boost financial skills like budgeting, saving and credit building. If there are any other financial areas you want to focus on, we’ll offer additional support wherever possible.
• Supplying your Trustee with the information and documents needed to file your taxes for the year your bankruptcy starts. We’ll file tax returns required for the year of your bankruptcy, and help you get caught up on prior year returns that might be outstanding too.

Your Licensed Insolvency Trustee or Estate Manager is here for you throughout the bankruptcy process, start to finish. We want you to have a stress-free experience and exit bankruptcy in the shortest time possible to get your financial fresh start and move forward with your life, debt-free.

Book Your Free Consultation

Recap the Timeline for a Typical Personal Bankruptcy

Depending on your situation, you could be totally debt-free in as little as nine months after your debt consultation with Sands & Associates:

• Have a consultation, gather your financial information, then sign your bankruptcy documents – and stop making your regular debt payments
• Over the next nine months work through the bankruptcy process
• Once all your duties are complete and nine months passed, you’ll receive an official Certificate of Discharge, and your unpaid debts will be considered forgiven and legally written-off by your creditors

Learn More About Bankruptcy and Other Options for Debt Forgiveness

We understand no one wants to be in a position where they are considering bankruptcy, and we believe our supportive non-judgmental approach to debt help allows our clients to move forward with dignity, confidence and hope for the future.

In 30 minutes we can help you explore your options, including but not limited to personal bankruptcy, and provide you with a plan to deal with your debt for good.

Choose the debt-free plan that’s right for you. Sands & Associates’ caring non-judgmental debt experts are here to help you.
Book Your Free Consultation

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