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.

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.

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.

The post Do I Qualify for Personal Bankruptcy? appeared first on Sands & Associates.

Read on to learn how consolidating and cutting debt with a Consumer Proposal, or having debt forgiven through personal bankruptcy, impacts your personal tax filings, tax debt, refunds, and more.

How Does a Consumer Proposal Work? 

A Consumer Proposal is a special type of consolidation solution that allows you to manage virtually all your debts in one streamlined payment and cut how much debt you must repay to have your debts cleared.

• Your consolidated debts are reduced to what you can reasonably afford to repay over a period up to five years, and you may repay as little as 20-50% of your total debts to settle them in full – without any interest or added fees.
• Virtually all types of debts can be consolidated and cut in a Consumer Proposal, and you have the option to exclude certain debts such as a vehicle loan or mortgage.

Your Licensed Insolvency Trustee will fully coordinate your Consumer Proposal, taking on all communications with your creditors, facilitating your payments, and providing you with support throughout the process.

• Two private one-on-one financial counselling sessions will be conducted with you, giving you resources and tools to help you improve your finances moving forward.
• You will generally have few duties to complete besides making whatever payments you are offering to your creditors and keeping your taxes filed and paid up to date.

There are many advantages to filing a Consumer Proposal, which will allow you to avoid bankruptcy AND the cost of borrowing while you get your debts paid off for good, plus provide you with full protection from your creditors.

What Happens in a Personal Bankruptcy?

Personal bankruptcy is a legal debt forgiveness option that can allow you to have up to 100% of your debts totally forgiven, and protects you from ongoing creditor harassment, collections, legal actions, etc. The bankruptcy process in Canada is generally very straightforward and private.

• Once you file for bankruptcy your debts are frozen and your creditors are immediately prohibited from contacting you for payment or charging interest on your balances.
• The cost of bankruptcy is generally minimal compared to repaying all your debts in full (with interest), and there is no cap on how much debt can be forgiven.

Most people will retain all their assets and be “in bankruptcy” for only nine months and, in this time, you’ll work to complete a few key duties that will allow you to exit bankruptcy and consider your debts cleared:

• Have two private, one-on-one financial counselling sessions with a qualified counsellor who works with your Licensed Insolvency Trustee.
• Keep a monthly budget of your household income and living expenses.
• Provide your Trustee the information necessary to file your income tax return for the year of your bankruptcy.

Learn More About Financial and Credit Counselling with a Qualified Insolvency Counsellor

Does a Consumer Proposal Clear Tax Debt?

Yes! Consumer Proposals and personal bankruptcy are the only two options in Canada that can be used to settle or forgive government debts for less than the total balance owing. Both a Consumer Proposal and personal bankruptcy can include:

• Basic consumer accounts such as credit cards, payday loans, lines of credit, overdrafts, etc.
• Government balances including tax debt, business GST, CERB overpayment, federal and provincial student loans (private lender student loans can also be included).
• Outstanding MSP premiums, EI overpayments.
• Debts for a business that you’ve signed a personal guarantee for.
• An amount owing to an individual.
• Secured debts where the ongoing payments have been halted (such as a vehicle shortfall or mortgage foreclosure).
  • If you want to continue with your vehicle financing or mortgage, then your Consumer Proposal or bankruptcy could exclude these debts.

If you owe a government debt a Licensed Insolvency Trustee will often consider this a high priority debt, as Canada Revenue Agency collects on behalf of many of accounts and has more power than virtually any other type of creditor when it comes to collecting on an outstanding balance.

• Many people end up in incredibly stressful situations almost overnight because Canada Revenue Agency has taken steps such as freezing their bank account, garnishing their wages, or placing a lien on their property.

If you have a government (or other) debt that you cannot pay, or that you need help in managing, the best thing to do is reach out to a Licensed Insolvency Trustee local to your province right away. Staying ahead of the problem can save you a lot of stress – and money!

Read an Overview of Wage Garnishment in BC

How Does a Consumer Proposal or Bankruptcy Impact Tax Refunds? 

Although Consumer Proposals and bankruptcy have several things in common, they are quite different solutions and some of these distinctions are in how tax filings and refunds are handled.

Tax Returns and Refunds in Consumer Proposals

If you owe Canada Revenue Agency for a tax (or business GST) balance, you’ll need to ensure all your tax filings have been submitted before you make your Consumer Proposal. Your Licensed Insolvency Trustee can advise you on what to file if you are behind.

• If you typically owe money on your tax returns your Trustee may additionally recommend including a clause in your Consumer Proposal that allows you to include the exact amount of tax debt you’ll have, calculated to the day your Consumer Proposal starts – even if that return isn’t yet due. This allows you to consolidate and cut the most debt possible.
  • For example, if you start your Consumer Proposal July 5^th, you could include debt from a provisional tax return that covers your taxes from January 1 to July 5.
  • A second return would later be filed to cover from the date of your Proposal to December 31, separating the pre- and post-Proposal balances.

If you don’t have any tax debt and your returns are filed up to date when you start your Consumer Proposal, you’ll continue to file your tax returns yourself, paying any balances due and keeping any refunds ‘as usual’.

• For people who typically get a tax refund (especially one you rely on for paying annual or semi-annual expenses) this is another consideration that can make a Consumer Proposal a better option than bankruptcy.
• It’s also not uncommon for people to use their tax refunds towards making an additional payment on their Consumer Proposal, with a goal of having it paid off early.

It’s important to stay on top of your tax requirements (filing and paying) while your Consumer Proposal is in place.

Consolidating Debt with a Consumer Proposal: Step-by-Step

Tax Returns and Refunds in Bankruptcy

Two tax returns will be filed for you by your Licensed Insolvency Trustee for the year that you declare bankruptcy, called pre- and post-bankruptcy tax returns. All you need to do is supply the required information to get these returns filed.

• The pre-bankruptcy return will cover the period from January 1 to the date you file for bankruptcy, and any balance owing from this return will be eliminated in your bankruptcy, along with any other balance from prior tax years.
• The post-bankruptcy return will cover the period from the date your bankruptcy started to December 31, and any balance owing from this post-bankruptcy return will be considered a new debt outside of your bankruptcy and therefore your responsibility to pay.

If there are any refunds from these pre- and post-bankruptcy tax returns (or any prior years’ returns that are filed at the time you start bankruptcy), these will be included in your bankruptcy ‘estate’ and go towards any money collected that could be distributed to your creditors as a dividend.

Subsequent years’ tax returns and balances are yours to file, pay, or collect.

Learn More About What to Expect Working with a Licensed Insolvency Trustee 

Learn More About Your Debt Options, Including Consumer Proposals and Bankruptcy

Licensed Insolvency Trustees are the best debt help resource for individuals, and the only professionals in Canada fully qualified and authorized to help you with your debt. You may be able to address your financial difficulties using the resources we can advise you on, a self-directed approach, or a legal solution like a Consumer Proposal or bankruptcy.

• Anyone can have a free confidential consultation to talk about their needs and get a plan to become debt-free – your finances do not need to be in an urgent state to qualify for help.
• By connecting with a Licensed Insolvency Trustee local to your province, you can safely get accurate advice and guidance.

The best time to confront a debt problem is in the early stages, as the issues often get worse if you don’t take action. Avoid the temptation to wait it out – you owe it to yourself to get debt help.

• Sands & Associates helps consumers across BC and we can review your financial situation together and provide you with information on a full range of options to deal with your debt.
• There is no cost for a consultation, and you are under no obligation to continue working with a Licensed Insolvency Trustee – and in less than an hour you will have clear understanding about the next steps in whatever solution you choose.

Learn about your options and get a debt-free plan that’s right for you. Book your free, confidential consultation with a non-judgmental expert at Sands & Associates today.

The post What Happens to my Tax Filings if I Make a Consumer Proposal or File Bankruptcy? appeared first on Sands & Associates.

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.

When and Why Would I Work with a Licensed Insolvency Trustee? 

A Licensed Insolvency Trustee is a legally qualified and federally endorsed debt solution expert. We are Canada’s only official debt help professionals, and if you are facing a challenge in managing your debts, we are the best people to turn to. We assist people who have many different needs and circumstances, such as:

• You’re worried about or struggling with debt, be it your monthly payments, or how to effectively pay your debt off.
• You want professional advice or support in making a plan to repay your debt.
• Your payments have fallen behind (or are about to), and/or accounts have gone to collections.
• You are dealing with a difficult creditor or aren’t sure if a debt is still collectable.
• You want to understand the resources available to help you manage or restructure your debt.
• You are seeking debt relief or forgiveness for debt you can’t afford to repay.

Learn More About the Qualifications and Regulations Licensed Insolvency Trustee Have

What Does a Licensed Insolvency Trustee Do for Me? 

A Licensed Insolvency Trustee’s job is to help people resolve their debt problem, and this may be achieved through multiple solutions. What we’ll first do is have a free, confidential consultation together to better understand your situation, and review all your options.

During this meeting, which can take place in person, over the phone, or online, a Licensed Insolvency Trustee will focus on explaining your rights and remedies so you can better understand your situation, and all the options available to you, including:

• Resources and strategies you can incorporate into do-it-yourself debt repayment, and how to prioritize your debts.
• Refinancing options, informal credit counselling services, and their pros and cons.
• Consolidating and cutting debt using an interest-free Consumer Proposal.
• Debt forgiveness through declaring personal bankruptcy.

In less than an hour you will have clarity on your situation, and an outline of next steps in the plan you decide to move forward with. If you would like to continue working with a Licensed Insolvency Trustee on a debt solution that we offer (typically a Consumer Proposal, or bankruptcy), we’ll set up a further meeting to work on the next steps together.

Preparing for Your First Meeting with Sands & Associates

How Does a Consumer Proposal Work? 

Consumer Proposals have become the debt solution of choice for people who want to legally consolidate and cut their debt and have many benefits that can dramatically reduce both your debt repayment costs and the time required to get your debts cleared. Here is a basic outline of how to consolidate your debt with a Consumer Proposal:

• Working with a Licensed Insolvency Trustee you’ll come up with a formal offer to pay your creditors the portion of your balance that is affordable for you.
• Your total debts will be combined in this one consolidation plan, and you’ll usually make monthly payments through your Licensed Insolvency Trustee until the Proposal amount you’re offering has been paid.
  • Virtually all of your debts can be included in a Consumer Proposal – everything from credit cards to payday loans, CERB overpayments, Canada Revenue Agency tax debts, student loans and more.
  • Debts can typically be cut by as much as 50-80% and you can take up to five years to complete your Proposal payments.
  • Your creditors will agree to write-off the unpaid balance at the end of the Consumer Proposal.
• In a Consumer Proposal your debts become ‘frozen’ and because this legal solution is not a loan, you won’t be charged any further interest by your Trustee or creditors as you work through the payments.
  • Your creditors will not be allowed to continue any collection or legal action, and they can’t change their minds and ask you for more money once the Proposal is in force.
  • Your assets and income are protected by your Consumer Proposal.

How Much Debt will a Consumer Proposal Eliminate?

What Role Does a Licensed Insolvency Trustee Have in a Consumer Proposal? 

Your Licensed Insolvency Trustee has several main duties in your Consumer Proposal, including:

• Developing your Consumer Proposal and managing all administrative requirements.
  • Preparation and filing of legal documents needed to start and conclude your Consumer Proposal.
  • Issuing you a formal “Certificate of Full Performance” once your Consumer Proposal terms have been completed.
• Dealing directly with your creditors, so you don’t have to.
  • Notifying your creditors of your Consumer Proposal, and if needed, negotiating with them.
  • Coordinating your payments and making the distributions to your creditors.
• Providing you two private, one-on-one financial counselling sessions.

Your Licensed Insolvency Trustee (or Insolvency Estate Manager) will also be available for support to you throughout the course of your Consumer Proposal, which can be over a period up to five years.

Learn More About the Steps to Consolidating Debt with a Consumer Proposal

How Does Personal Bankruptcy Work? 

If you’re unable to repay your debts and a Consumer Proposal isn’t a good option, bankruptcy is another legal debt solution governed by the Bankruptcy and Insolvency Act in Canada that allows you to get debt relief, and have your debts written-off by creditors – completing a personal bankruptcy can have virtually all your debts forgiven.

• No creditor can prevent you from seeking the relief and protection of bankruptcy if you find yourself unable to repay your debt, and you don’t need get a court’s permission or give up all your assets.

After you declare bankruptcy, you’ll work on completing some basic duties to receive your official release (discharge) from bankruptcy – this usually happens nine months after the start of your bankruptcy. These duties you’ll have to complete generally include:

• Completing two private one-on-one financial counselling sessions.
• Submitting a monthly budget form called a “statement of income and expenses”.
• Supplying the tax return information for the year you start bankruptcy, as these filings will be done by your Trustee.
• In most cases you’ll pay a minimum administration fee, usually $2,700 broken into payments throughout your bankruptcy.

Learn Why Most People Keep All their Assets in Bankruptcy

What is the Role of a Licensed Insolvency Trustee in a Bankruptcy? 

You can access bankruptcy services only by working with a local Licensed Insolvency Trustee, and there are some key functions your Licensed Insolvency Trustee will fulfill in a bankruptcy. Your Licensed Insolvency Trustee will:

• Prepare the legal paperwork you will sign to officially declare bankruptcy and manage the administration requirements throughout the process.
• Deal with your creditors, including reviewing their claims and managing their inquiries.
• Issue your official ‘Certificate of Discharge’ and complete the required administration tasks to conclude the bankruptcy.

As with a Consumer Proposal, your Licensed Insolvency Trustee (or Insolvency Estate Manager) is available for ongoing guidance and support throughout your bankruptcy.

Debt Forgiveness with Personal Bankruptcy: Step-by-Step

How Does a Licensed Insolvency Trustee Get Paid for a Consumer Proposal? 

The fees that a Licensed Insolvency Trustee gets for the work they do in a Consumer Proposal (or bankruptcy) are all regulated. Licensed Insolvency Trustees can’t set their own fees, and there is no hourly ‘fee for service’ – there are tariffs set by the federal legislation that are followed in all insolvencies filed in Canada.

To explain it in the simplest terms, in a Consumer Proposal you only pay whatever you are offering your creditors – no fees or interest charges are added on. For example:

• If your Consumer Proposal offers your creditors $10,800 total, which you will pay by monthly payments of $300 for 36 months – you pay $300 a month for 36 months, that’s it.
• The Trustee’s payment is calculated based on the amounts you pay and deducted from the funds your creditors get. This all-inclusive payment also covers costs such as: the government filing fee, financial counselling sessions, Personal Property Registry Search charges, and other incidental costs.

Why We Don’t Collect Upfront Payments When You Start a Consumer Proposal

Although all Licensed Insolvency Trustees offer free consultations and must follow the same rules and calculations for their fees, you may find some different approaches as to when you would make your first payment. At Sands & Associates, our approach when it comes to your payments is generally this:

• You’ll make your first monthly Consumer Proposal payment sometime in the first month after your Consumer Proposal has been officially filed, and then continue with your monthly payments from there. Again, all you pay is your one monthly payment – there are no added fees, hidden costs, or interest charges.

We don’t collect any upfront payments when you are starting your Consumer Proposal because we understand if you are coming to us for help with a debt problem, you would probably benefit from some breathing room before you begin your Consumer Proposal payments. This is just one of the ways our approach is different – we are proud to be ‘debt smart with heart’.

Is a Consumer Proposal Right for Me?

Are There Alternative Debt Help Providers in Canada?

Licensed Insolvency Trustees are Canada’s only official debt help providers – qualified, endorsed, and fully regulated at a federal level. Unofficially, there are individuals and organizations who offer various debt services to Canadians – you may come across debt consultants, debt settlement agents, credit counsellors, and more. These are all unlicensed providers, and they cannot offer you legal protection or solutions that allow you to have debts forgiven in the same way that a Licensed Insolvency Trustee can.

• Consumers need to be very cautious when it comes to alternative debt help providers and know that if you decide to work with a representative other than a Licensed Insolvency Trustee there can be significant risks in doing so, and often little recourse if you have problems.

Being a Licensed Insolvency Trustee means committing to a high-standard code of ethics and standards of professional practice, with a responsibility to perform all our functions with honesty and integrity. When it comes to debt help, reach out to a Licensed Insolvency Trustee – even if it is for a second opinion.

Our job is to help you solve your debt problems, and we’re here for you without judgment. 

Get confidential advice, explore all your options with a qualified professional – and get a debt-free plan that’s right for you. Book your free consultation with Sands & Associates today.

The post Working with a Licensed Insolvency Trustee – What to Expect appeared first on Sands & Associates.

What Does it Mean to File for Bankruptcy in Canada?

Bankruptcy is a legal solution to help people get relief from and resolution for their debt. In completing the process of bankruptcy in Canada, a person who previously was unable to manage their debt can get a financial fresh start.

• Working with a Licensed Insolvency Trustee (the professional who will handle the bankruptcy administration and guide you through the process) you may be able to have virtually all your debts forgiven, including but not limited to debts from credit cards, payday loans, taxes, CERB overpayments, student loans and more.
  • No creditor or other party can prevent you from seeking the protection and relief of bankruptcy if you are unable to pay off your debt.
• Most often people complete the process of bankruptcy in only nine months, paying an administrative fee over this time, and completing some basic duties as part of the bankruptcy process.

Once you’ve officially filed for bankruptcy, this triggers what is called a ‘stay of proceedings’ which prohibits creditors from continuing to pursue you for payments, charging ongoing interest, taking collection actions, etc. Because of this stay of proceedings, bankruptcy offers immediate and powerful protection from your creditors, including stopping wage garnishments and other legal actions that can put your assets and income at risk.

Your Assets in Bankruptcy – Bankruptcy Exemptions in BC 

It’s true that most people filing personal bankruptcy in Canada keep all their assets, and this is because each province and territory has laws that specify assets that are legally exempt and therefore safe from seizure by creditors. Here in BC, asset exemptions set through the Court Order Enforcement Act entitle you to claim exemption amounts on the following assets, even when you can’t pay your debts:

• $4,000 for household furnishings and appliances (at resale or liquidation value, like what you could expect to get at a garage sale)
• Clothing and medical aids – up to an unlimited value
• $5,000 for a motor vehicle (this is reduced to $2,000 if you have an outstanding debt owing under Family Maintenance Enforcement Act)
• $10,000 for tools or other personal property used to earn income from your occupation, also known as tools of the trade (again, at a resale or liquidation value – not new or replacement value)
• $12,000 equity in your principal residence if you are within the Metro Vancouver or Greater Victoria area ($9,000 elsewhere in the province)

Inheritances and lottery winnings that you acquire before being released (discharged) from bankruptcy are examples of property that would not be exempt.

Compare Your Debt Options

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

Claiming Bankruptcy and Keeping Your Car (or Other Assets)

When it comes to larger assets like homes and vehicles, not only the value of the asset is considered, but also whether there is a secured debt owed against it and the resulting equity the person has in the asset (essentially the difference between the value of the asset and the value of the loan owed against it).

When it comes to a home or vehicle, many people don’t own these assets free and clear, and if the asset is subject to a secured debt, there are a few options to consider in bankruptcy:

• If you want to keep the asset you could decide to continue with the ongoing payment arrangement (or try to negotiate new terms) with your secured creditor.
  • If your mortgage (or other secured debt) payments are up-to-date and you want to continue with the agreement in place, these are not usually impacted at all by filing for bankruptcy.
    • If your current mortgage is in good standing, generally lenders will honour mortgage renewals that come due during the period of your bankruptcy.
• Or you could decide to walk away from the asset and ongoing financing arrangements altogether, and any equity above and beyond your exemption would be paid into your bankruptcy estate.
  • You may decide to sell the property through the bankruptcy, and each homeowner would be entitled to receive their exempt equity amount (up to $12,000 each) from the sale proceeds.
  • If foreclosure proceedings were underway and the secured creditor was taking possession, any shortfall from the subsequent seizure and sale of your home would be written-off as part of the bankruptcy.

What Do You Lose When You Declare Bankruptcy?

Bankruptcy isn’t meant to be a punishment, it’s a solution to help you solve unmanageable debt, and while assets that are outside the exemptions are intended to form part of your bankruptcy ‘estate’ and be available towards satisfying your debts – the reality is that even if you own something beyond the exemption allowances, non-exempt assets are often kept by individuals and there are a few ways of achieving this, such as by:

Paying in the non-exempt value of your assets to your bankruptcy estate – this is sometimes referred to as ‘repurchasing an asset’ even though you will physically retain it the whole time. For example:

• You own free and clear a vehicle appraised at a value of $8,000, and are entitled to a $5,000 exemption allowance, leaving you with $3,000 non-exempt equity. You could choose to keep the vehicle and pay in $3,000 to your bankruptcy estate by way of monthly payments.

Alternatively, the most common (and often best) way to keep virtually all your assets, while still getting protection from your creditors and a legal solution to manage your debt is to file a Consumer Proposal rather than bankruptcy.

• You will not automatically lose your home or other assets if you file for bankruptcy or make a Consumer Proposal. If you move forward with bankruptcy or a Consumer Proposal, the biggest (and often only) thing you have to lose is your debt!

What is a Consumer Proposal?

A Consumer Proposal is a unique legal debt solution that is considered an alternative to both consolidation loans and bankruptcy. Filing a Consumer Proposal allows you to consolidate your debt without borrowing and cut the amount of debt you must repay down to what you can reasonably afford.

• By making (usually) monthly Consumer Proposal payments administered by your Licensed Insolvency Trustee, many Consumer Proposals are successful in cutting debt by up to 50-70% – with no borrowing costs or added administration fees.
• With a Consumer Proposal you keep all your assets unless you specifically decide to end the ongoing financial commitment through the Consumer Proposal.
  • Like bankruptcy, when it comes to secured debts (a mortgage, vehicle loan, etc.) you have the option of keeping the payment arrangements in place if you want to keep the asset, or you could surrender the asset to end the ongoing obligation. (And if there’s a shortfall this could be included in the Consumer Proposal.)

How Much Debt will a Consumer Proposal Eliminate?

Confidential Debt Advice 

Understanding your situation and ways to deal with debt is best done with the help of a Licensed Insolvency Trustee. We are Canada’s only qualified debt help professionals and can assist you in exploring ALL possible solutions. If you’re struggling with unmanageable debt, or finding it difficult to pay down your debt, connect with a local Licensed Insolvency Trustee to have a free, confidential consultation about your options.

• There are many ins and outs to consumer debts and your rights, responsibilities, remedies can be complex. Avoid troubleshooting what can be a complicated legal subject, incorrectly disqualifying yourself from getting support and solutions, or unknowingly enlarging the problem – take an hour to find out the facts.

Licensed Insolvency Trustees are dedicated debt help professionals who offer impartial expert advice, and we understand how stressful financial troubles can be.

• Sands & Associates serves the entire province of BC, and you can get free, qualified advice and support from a non-judgmental professional in person at one of our local offices, over the phone, or over video chat – whatever is most convenient for you. No judgment, just support and solutions.

Talk with a friendly, local debt expert who cares. Book your free, confidential debt consultation with Sands & Associates today.

The post What Assets Can I Keep if I Declare Bankruptcy? appeared first on Sands & Associates.

Read on to learn about the credit counselling and financial literacy resources available to individuals working with a Licensed Insolvency Trustee on a personalized debt-free plan.

Goals of Financial Counselling Sessions with a Qualified Insolvency Counsellor 

Licensed Insolvency Trustees help people deal with their debt, and if you’ve decided to work with a Licensed Insolvency Trustee on a debt solution like a Consumer Proposal (a special type of debt consolidation) or personal bankruptcy (a legal debt forgiveness solution), you’ll complete two one-on-one financial counselling sessions as part of either insolvency process – and there is no added cost to you for this service.

The “Insolvency Counselling Program” is intended to help people boost their financial literacy, gaining confidence in their ability to manage their personal finances, and provide tools and resources for ongoing future success in money matters. After completing a Consumer Proposal, or exiting personal bankruptcy, people have a financial fresh start and can move forward with their lives – debt-free.

Who is a Qualified Insolvency Counsellor?

The Licensed Insolvency Trustee who is ultimately responsible for your Consumer Proposal, bankruptcy, and related counselling sessions may lead your counselling sessions themself, but most often these private, one-on-one sessions are led by a Qualified Insolvency Counsellor who works closely alongside your Licensed Insolvency Trustee. This is a registered professional financial counsellor who has:

• Successfully completed a practical course for this unique type of counselling.
• Proven to and been registered by your Licensed Insolvency Trustee as possessing the necessary training, experience, knowledge, skills, and competencies to lead insolvency counselling.
• Completed ongoing professional development training every two years.
• Demonstrated that they are of good character.

Quality of care and service is of the utmost importance in these matters, and your Licensed Insolvency Trustee cannot register anyone as a Qualified Insolvency Counsellor who is involved with activities that may be a potential conflict of interest, or could potentially negatively impact the people they are counselling.

4 Questions to Ask When Choosing a Credit Counsellor

Financial Counselling Topics – Stage 1: Budgeting and Planning

Your first confidential counselling session with a Qualified Insolvency Counsellor will usually take place shortly after you file your Consumer Proposal or declare bankruptcy (somewhere between ten and 90 days), and this one-on-one session might be done in-person, or remotely via videoconference (or over the phone).

Budgeting is the focus of this conversation, and the goal here is that you’ll come away with information and support to help you create and maintain a functional household budget realistic for your personal situation.

• A balanced budget is an important financial tool, and every consumer should have one. Budgeting isn’t about restricting what you can and can’t do, it’s about making confident and thoughtful decisions about how you will use your income.
• No two situations are the same, and it’s important to consider and strategize the different components of your budget to find what works best for you and your household.
• In a Consumer Proposal your debt will be combined then cut into one consolidated (usually) monthly payment, (or in a bankruptcy most people pay a minimal administration fee), and this is typically a substantial reduction from the multiple payments you may have previously been trying to manage in your budget.

How Much Debt will a Consumer Proposal Eliminate? Learn More

This first financial counselling session is a great opportunity to work with a professional to fine-tune your new spending and saving plans, and maybe even learn some new tips and best practices. Your Counsellor will plan to review your budget together with you, and offer support such as:

• Mapping out a plan for record-keeping, and how you will track and check-in and evaluate your estimated VS actual income, expenses, and general budgeting in future.
• Developing strategies to adjust your budget, and for managing unexpected changes to your budget or impacts to your income.
• Addressing any other circumstances or financial difficulties you may want extra guidance on or support / resources for.

Financial skills take time for everyone to learn, and there are often some trials and errors along the way. Once you’ve got a solid understanding, you’ll be in that much better a position to make well-informed and confident decisions about money matters that impact you and your family.

Consolidating Debt with a Consumer Proposal: Step-by-Step

• As well as these two credit counselling sessions that are done as part of completing your Consumer Proposal or bankruptcy, there is an optional self-directed online learning program available to help you get the most out of this opportunity for individual learning and support.
• The online modules offer an introduction to the topics that will be covered in depth during these private sessions, and if you’re able to become comfortable with some of these materials before your sessions, you’ll have more time for tailored resources and support with your Counsellor.

Financial Counselling Topics – Stage 2: Goals, Spending and Credit 

Your second one-on-one session with a Qualified Insolvency Counsellor is done at least 30 days after the first, and again may be done in-person, or remotely. While the first session was all about budgeting stages, strategies, and tools, this second session focuses on your future planning and providing you support to continue moving forward with (debt-free!) success.

Your Counsellor will check in with you about how you’re doing with your Consumer Proposal (or bankruptcy), your new budget, and together you’ll review several other key financial literacy topics, which include:

• Financial goal setting
  • Why, and how to set SMART (specific, measurable, achievable, relevant, time-bound) goals.
  • Specific support in creating a plan to achieve these goals.
  • Strategies to help you meet your spending and savings goals.
  • Identifying, avoiding, and mitigating potential financial risks that could get in the way of your future financial success.
• Spending habits
  • Practical ways to prioritize spending, and spending systems.
• Using and managing credit as a tool
  • Best practices for using credit well.
  • Considerations and questions to ask lenders before borrowing.
  • Breaking down and comparing the costs of borrowing.
  • Types of credit that are considered high-risk.
• Understanding credit scores and reports
  • Establishing a responsible credit history and habits.
  • How and when to check your credit history reports.
  • Steps you will want to take after your Consumer Proposal (or bankruptcy) is complete.

A lot of people worry they have no way to get out of debt – or that by working with a Licensed Insolvency Trustee they may compromise their future financial goals or ability to get credit in future, but the reality is that with options like Consumer Proposals, or even bankruptcy, most people are able to get to debt-free much sooner than if they were to continue trying to chip away at their debt on their own.

The financial fresh start of these processes allows individuals a means to take back control of their finances and make the most of their income. Without the constant nag and weight of burdensome debt, not only to personal finances, but wellbeing, there is much more space to look to the future with optimism.

Meet some of the people whose lives have been changed working with Sands & Associates

More About Debt Help Services from BC Licensed Insolvency Trustees 

Getting confidential debt advice from a qualified expert couldn’t be easier – simply reach out and contact a Licensed Insolvency Trustee local to your area. All Licensed Insolvency Trustees offer a free confidential consultation where you’ll have opportunity to better understand your situation and explore ALL your options.

Sands & Associates serves all of BC and offers our full suite of debt help services in person at local offices throughout the province, as well as over the phone or video conferencing.

• Take an hour and talk with a Licensed Insolvency Trustee; we can give you a debt-free plan that works for you and your unique situation, and, as Canada’s only appointed debt help professionals, offer you additional resources and insights you may not otherwise be aware of.
• No referral is necessary to connect with a Licensed Insolvency Trustee. If you are asked to pay any referral fee this should be a warning you are not talking with a Licensed Insolvency Trustee.

You Are Not Alone in Dealing with Debt – We Are Here to Help You 

You do not need to be behind in your debt payments to seek professional debt solutions or use a Consumer Proposal to consolidate your debt. In fact, many people we work with have never missed a payment and hold a good credit rating, but realize that at their current rate of repayment, they will be facing years or decades of debt payments.

If, however, you are dealing with a serious or urgent financial issue such as a creditor who is threatening you with legal action for a debt, or already garnishing your wages, we can work with you to quickly implement a solution that will stop these collections immediately.

Learn More About Wage Garnishment

Some questions or concerns we commonly address include (but are certainly not limited to):

• Debts are generally worrying you, or your household is being negatively impacted by debt.
• Your monthly debt payments aren’t enough to pay off your (non-mortgage) debt within five years.
• Ways to consolidate and/or cut debt.
• What options exist to deal with a specific creditor or whether a debt is collectable?
• How you can get debt relief or forgiveness by your creditors.

You don’t have to try to interpret all your rights and remedies to deal with your debt, a Licensed Insolvency Trustee is your go-to resource, and we provide safe accurate advice and information to consumers every day.

Many people feel embarrassed about their financial situation, or worried about being judged or even scolded about having difficulty managing their debt; please, know that Sands & Associates is a judgment-free zone.

We believe that a money problem can happen to anyone at any time, and that everyone deserves the opportunity for help and a financial fresh start to move forward and live their best life! You owe it to yourself to get debt help, and we are here for you.

Connect with local debt experts who care – book your free, confidential debt consultation with Sands & Associates today.

The post Financial and Credit Counselling with a Qualified Insolvency Counsellor appeared first on Sands & Associates.

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.

Book Your Free Consultation

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!

Book Your Free Consultation

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.

Book Your Free Consultation

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.

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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

The post How to Complete Personal Bankruptcy with Sands & Associates appeared first on Sands & Associates.

How Does Bankruptcy Work?

Bankruptcy is a powerful legal debt forgiveness process Canadians are entitled to choose in situations where their debts have become unmanageable. Personal bankruptcy means you get legal protection from your creditors and debt forgiveness that eliminates virtually all your debts.

• The overall goal of personal bankruptcy is to provide the honest but unfortunate person an opportunity to start fresh, free from unmanageable debt.
• For most people bankruptcy is a simple legal process, and you work with a Licensed Insolvency Trustee throughout your bankruptcy. No lawyers, no court appearances, and no need to ask creditors for permission to seek bankruptcy protection.

There are several potential debt management solutions that a Licensed Insolvency Trustee (or Insolvency Estate Manager working with a Licensed Insolvency Trustee) will help you explore during a confidential consultation about your situation and general needs.

During your consultation with Sands & Associates we will review all your options together, including strategies for self-directed consolidation, debt repayment plans and Consumer Proposals, also additional resources that may help you in addressing your debts or are relevant to your circumstances.

Preparing for Your First Meeting with Sands & Associates

What are the Advantages of Filing Bankruptcy?

The main benefits of declaring personal bankruptcy include:

• Getting full forgiveness for almost all types of debt including (but not limited to): credit cards, overdrafts, bank loans, taxes and other Canada Revenue Agency debts, CERB overpayments, student loans, payday loans, ICBC debt and more
  • A personal bankruptcy may also cover business-related debts.
• Removing unaffordable debt repayments from your monthly budget
  • The cost of filing bankruptcy is usually substantially less than repaying your debts in full on a monthly basis.
• Protecting your assets and income that may otherwise be vulnerable to seizure from creditors, including halting wage garnishments
• Stopping the stress of overwhelming debt and getting a financial fresh start that allows you to move forward with your life and achieve your future financial goals
• Having a clear “debt-free” date

In certain situations choosing bankruptcy can be the best way to get out of debt, and, compared to other debt solutions, bankruptcy is often additionally advantageous being the least expensive debt option and the fastest to complete.

What Happens to my Assets if I File Personal Bankruptcy?

Most people keep all their assets during personal bankruptcy. This is because you are entitled to claim certain assets as exempt property – meaning they are protected from creditors. Even if you have assets beyond exempt values, there are options by which you can keep them if you declare bankruptcy.

In BC assets exempt from seizure in bankruptcy include (but are not limited to):

• Equity in a home in Greater Vancouver and Victoria = $12,000
  • In the rest of the province = $9,000
• Household items of a (quick/garage sale) value up to = $4,000
• One vehicle of a value up to = $5,000
  • The vehicle exemption drops to $2,000 if the person is behind on child support payments
• Work tools of a (quick/garage sale) value up to = $10,000
• Essential clothing and medical aids value = Unlimited
• You are entitled to keep funds held in an RRSP, except for contributions made within the 12-month period prior to your date of bankruptcy
  • A transfer between RRSPs is different from a contribution.
• Certain life insurance policies and nearly all pension plans

If you have an ongoing mortgage or vehicle loan or lease in good standing you may choose to continue paying those secured debts outside your bankruptcy. Or you may decide not to continue those agreements and resolve any balances owing from these debts in your bankruptcy.

If applicable, options for managing non-exempt assets and secured debts would be discussed together with your Licensed Insolvency Trustee during the consultation stage before you move forward.

An Overview of ‘Seize or Sue’ and Vehicle Loans in BC – Learn More

What Do I Need to Do to Complete Bankruptcy?

You will have a few key responsibilities to fulfill during personal bankruptcy and your Licensed Insolvency Trustee (or Insolvency Estate Manager) will help guide you and be available for ongoing support throughout. Some of these basic duties include:

• Keeping us advised of your address and other contact information
• Letting us know if your household, family or income situation changes
• Generally cooperating with requests by your Licensed Insolvency Trustee for assistance and information (such as tax information) as we complete your bankruptcy administration

Financial Credit Counselling Sessions: You will complete two private financial credit counselling sessions with a friendly Sands & Associates Qualified Insolvency Counsellor.

These sessions take around 45 minutes each and are supportive conversations intended to offer you resources, strategies and tools for areas of financial literacy such as: budgeting and spending habits, financial planning and goal setting, credit scores, and more.

Completing a Monthly Statement of Income & Expenses (Household Budget Form): Each month you’ll complete a basic form detailing your household income and expenses:

• You may be asked to submit some, or all, of these household budget forms along with proof of your income and certain expenses to your Licensed Insolvency Trustee.
• You will report your spouse’s and other family members’ incomes as part of completing your Statement of Income & Expenses, but they are not expected to make financial contributions to your bankruptcy, nor undertake responsibility for the debts being included in your bankruptcy.

Unless you and your spouse have jointly held debts where they have co-signed responsibility (or a supplementary credit card), there will generally be no impact on your spouse if you declare bankruptcy.

My Spouse is Filing for Bankruptcy – Now What?

Paying Required ‘Surplus Income’ or Bankruptcy Administration Fees (Determined by Income): Surplus income is the amount that your net (after tax) income exceeds government monthly low-income guidelines. Using your Statement of Income & Expenses we will calculate whether you have surplus income, which is then used to determine:

• How long your bankruptcy will last; and
• How much you will need to pay each month.

How Long Does Bankruptcy Take?

You will be ‘in bankruptcy’ for a period that varies depending on a few factors and during this period you’ll be completing the duties previously detailed so you can successfully exit (i.e., be discharged) from bankruptcy. Most bankruptcies will be completed in:

• 9 months with an ‘Automatic Discharge’. This is by far the most common and applies when there is:
  • No prior bankruptcy, no opposition to discharge, all duties completed; and
  • Household income does not require $100 or more surplus income to be paid.
• If your household income is higher than the government’s ‘low income’ threshold you might instead expect an ‘Automatic Discharge’ after 21 months when there is:
  • No prior bankruptcy, no opposition to discharge, all duties completed; and
  • Household income requires payment of $100 or more of surplus income.

Once your bankruptcy is started your debts will be frozen right away and creditors will not be allowed to pursue you for payment. Upon your official discharge from bankruptcy the debts included will be written-off and forgiven by your creditors. You are now debt-free!

Our goal is for you to have a stress-free, no-surprises experience, exiting bankruptcy in the shortest possible time to achieve full forgiveness of your debts.

It is also possible to file bankruptcy even if you’ve been bankrupt before. It’s important (whether you’ve declared bankruptcy before or not) to explore all your options with a Licensed Insolvency Trustee before moving forward. Many people find they can avoid bankruptcy with an alternative such as a Consumer Proposal.

Can I Declare Bankruptcy More Than Once? Learn More

How Much Does Bankruptcy Cost?

If your income is such that you do not have any surplus income requirements, you can expect to pay a basic administrative fee for your bankruptcy instead of making surplus income payments.

• In most cases the cost payable by you to file for bankruptcy is $2,700.
  • At Sands & Associates we do not ask that you pay this all up-front and can often arrange for you to pay by monthly payments throughout your bankruptcy.
• The fees for bankruptcy include services and costs paid directly by your Licensed Insolvency Trustee during the bankruptcy administration, which may include (but are not limited to):
  • Government filing fees
  • Financial counselling sessions
  • Preparation and filing of income tax returns
  • Personal Property Registry Search charges

Your regular earnings such as wages, salaries, commissions, self-employment income, pensions, etc., will all continue to be paid directly to you throughout your bankruptcy.

• Other government benefits and credits (Canada Child Benefit, GST/HST Credits, etc.) will also continue to go to you as usual, with the general exception of certain income tax refunds.
• There is no cap or maximum amount of income you can earn during your bankruptcy.

Being able to plan your household budget and expenses is important – we will help you estimate your bankruptcy costs before you proceed. We want you to feel confident and in control as you move ahead.

When is Filing for Bankruptcy the Best Option?

How Long Does Bankruptcy Stay on My Credit?

In most situations only you, your creditors, your Licensed Insolvency Trustee and the Office of the Superintendent of Bankruptcy (“OSB”) will know about your bankruptcy, and credit bureaus will obtain information relevant to their records directly from the OSB.

• The OSB is the government body that oversees all Licensed Insolvency Trustee matters and filings that the Bankruptcy and Insolvency Act applies to, including bankruptcies and Consumer Proposals.

A bankruptcy will be noted as an R9 on your credit history for six years following your discharge from bankruptcy. This is the same duration as many other common transactions such as missed payments or creditor judgments, and the note is temporary – credit history and scores can change dramatically in as little as two to three years.

• Although many people decide to wait until after bankruptcy to take on new credit, this isn’t a requirement. It is possible to apply for and be granted credit long before this R9 note expires from your credit history, including vehicle financing, mortgage renewals, etc.
  • It is an achievable goal to be considered for a mortgage loan in as little as two-to-three years after completing bankruptcy and guidance on establishing credit is part of the bankruptcy financial counselling process.

There is life (and credit) after bankruptcy!

How Do I Claim Bankruptcy?

There are three basic steps to officially starting bankruptcy with Sands & Associates:

1. Have a confidential, non-judgmental consultation with a Licensed Insolvency Trustee (or Insolvency Estate Manager working with a Trustee)
2. Complete an information form so your bankruptcy documents can be prepared for you
3. Sign the official bankruptcy documents

Your Licensed Insolvency Trustee will take care of the administration of your bankruptcy filing including working on your behalf in creditor communications and notifying your creditors of your decision to file.

We understand that no one wants to be in a position where they are considering bankruptcy and that you may be experiencing a lot of stress and anxiety as you come to the decision to reach out for help. Please know that whatever challenges you have been dealing with, there are solutions – and we’re here to help you find the one that’s right for you and your situation.

Explore your options and learn how bankruptcy could get you to a debt-free financial fresh start. Book your free confidential debt consultation today, virtual and in-person services are available across BC.

The post Is Personal Bankruptcy Right for Me? appeared first on Sands & Associates.