Question: How long does a consumer proposal or a debt settlement stay on your credit history?
Answer: Usually consumer proposals and debt settlements affect your credit in the same way. However, you should keep in mind that not all debt settlement plans are the same, so there may be some slight variation between different ones.
For the most part, both a consumer proposal and a debt settlement plan will result in an R7 rating listed on your credit history, which will appear immediately after you file. This rating will remain for an additional 3 years after your program’s completion.
Question: If a person who is a primary borrower from a bank owes money on a car loan but claims personal bankruptcy, do the collections agencies have the right to go after the co-signer or is the loan wiped out under the bankruptcy law? Please respond. Thanks so much!
Answer: If you have a co-signer on a loan, they have agreed to make sure that your loan is paid in full. Therefore, if you claim bankruptcy, collection agencies have the right to go to your co-signer looking for payment. If you want to keep the car, someone must continue to make payments on it. If you don’t make payments, the lender of your loan can go after the co-signer.
Question: If I was to go the root of bankruptcy would my pension be affected?
Answer: No, your pension will not be affected if you decide to declare bankruptcy. However, you will have to give your pension information to your bankruptcy trustee when you file, and it will be factored into your monthly bankruptcy payment.
Question: What could happen if this is my 3rd bankruptcy?
Answer: 3rd bankruptcies are allowed, however you will have to explain each of your past bankruptcies to the Court. Also, the Court could possibly extend your bankruptcy period (and with it your payments to creditors) by 2-3 years or more, although this is unlikely.
Question: If you declare bankruptcy can anybody check on a public record?
Answer: Yes, bankruptcy is a matter of public record which means that basically anyone can access the information. However, in order to check the registry (available from the Superintendent of Bankruptcy’s office) you must pay a fee. Also, few people know of the existence of the registry. But it is possible for anyone to check whether you have ever had a bankruptcy in your life.
Question: I had a consultation today and I was advised that I should be paying 100% of my debts over 5 yrs due to a past bankruptcy. My total unsecured debts are $72,000 weekly take home income is $1475.00 only assets are 2 vehicles worth about the same or less than owing and $260,000 home with a $250,000 mtge, Does this sound right? all I have read about consumer proposals points to a lower payback.
Answer: Yes, that sounds correct. A single person in Ontario in 2011 is allowed to earn $1,926 per month. If you earn more than that you are required to pay half of the amount you are over (it’s called surplus income). If your take home pay is $1,475 per week, that’s $5,900 per month, so you would be $3,974 over the limit, requiring you to pay about $1,987 per month.
Since this is your second bankruptcy you will be bankrupt for a minimum of two years, and since you have surplus income your bankruptcy is extended for an additional year, so you would be required to pay $1,987 for 36 months, or about $71,532.
Since that is the total amount you owe, there is no chance that the creditors would accept less than that in a proposal (they would not accept a proposal if they would get more in a bankruptcy). You can read a more detailed explanation in this article on how much would my consumer proposal cost.
Question: does it cost money (is there a fee for example) to go bankrupt in Ontario?
Answer: Yes, there is a cost to file bankruptcy in Ontario.
You will be required to make a monthly contribution while bankrupt (for at least nine months), which depending on the trustee could be in the range of $200 to $250 per month. This covers the trustee’s cost to administer your estate.
You will also be required to make surplus income payments if your income exceeds the limit set by the government. Finally, you will also lose your tax refund and your HST credits while bankrupt.
Question: What happens if one cannot pay the Ontario bankruptcy fees charged by the trustee? $200/month for 9 months will mean we don’t eat or have heat or some other necessity. What happens then?
Answer: All trustee firms in Ontario are private companies, so they require a contribution from you to cover the costs of administering your bankruptcy. In addition, the trustee must incur costs to mail the documents to your creditors, and to complete other duties.
However, all trustees will work with you to come up with a payment arrangement that works for you. Here are some things to consider:
First, what are you currently paying to service your debts? Once you file bankruptcy in Ontario you are no longer making payments on your unsecured debts, so in most cases the cost of bankruptcy is much less than what you are currently paying.
Second, the reason most people file for bankruptcy is to prevent their wages from being garnisheed. If you are not currently working, you have no wages to garnishee, so it may not be necessary for you to file bankruptcy at this time.
Third, your Ontario bankruptcy trustee will explain all of your options, so it may not be necessary to file bankruptcy.