Windsor Ontario Personal Bankruptcy Blog

When faced with numerous loan payments and credit cards bills each month, the first step for many people is to find out if they can obtain a debt consolidation loan. The debtor (the person who owes the money) will go to his or her bank and apply for the loan. If the debtor qualifies, the bank will then give a loan and pay off the other credit card and loans. Once you receive the loan from your bank, if the bank doesn’t cut up your credit cards, you need to make sure you do it yourself. If you currently don’t have a source of income, it is unlikely you will be able to obtain a loan.

The main advantage of a debt consolidation loan is that it takes all of your debt and combines it into one monthly payment. Your new loan payment should be less than the minimum payments you were paying on your credit cards and loans. If it is not a lower monthly payment, this might not be the best option for you.

Another factor to consider will be the interest rate you will be charged. Most credit cards have interest rates between 10% and as high as 28% per year. The interest rate charged on the loan should be lower than you are paying now.

You will also need to consider any other terms the bank has. Do they want to put a lien on your car, or do they need a cosignor? If they do, you need to consider the risk to your car and the cosignor if you are unable to pay the loan in the future.

If you are able to make a monthly payment, but you don’t qualify for a debt consolidation loan, a consumer proposal might be a better option for you. You can call me at 310-PLAN or email me to discuss this option in more detail.

As a Windsor trustee, this is a common question.

First question – is there equity in the house. Equity means if you sold you house, after paying the mortgage and costs would there be money left over? If there would be bankruptcy may not be for you. The money that would be left over belongs to the bankruptcy and you would have to pay it to your bankruptcy. If the amount is large enough a consumer proposal might also be something to consider.

If there isn’t equity, as long as the mortgagor agrees, the bankruptcy will not take your house.

I had a debtor come in today to make the final payment under the terms of his consumer proposal. He was a very happy person.

He had heard a rumour that now that the proposal is done, he now has to make repayments for the balance of the debt. He didn’t think it was so, and just wanted confirmation. I told him that expect for some circumstances (such as student loans that are less than 10 years old), this is not true. A clause in the proposal states that if the creditors accept the consumer proposal it is for final settlement of the debt.

If you have a question, feel free to send me an email.

There are a two main reasons for bankruptcy in Windsor. The first is marital separation or divorce. A family unit has 1 or 2 incomes, and 1 set of expenses. After separating, the 2 spouses each of the same income, however now they both have their own set of expenses. In addition, each might have their own debt, plus joint (in both of their names) debt.

Another factor in Windsor is the reduction of overtime and in many cases layoffs. Employees might have had steady overtime hours 2 or 3 years ago, however, now their hours have been cut back to 40 or less. The debt was probably manageable at 60 hours a week, but now at 40 hours a week, there just isn’t enough paycheque to go around. If this sounds like you, then call me at 519-250-8060 or email me so we can discuss the options that are best for you.

Realizing that you have financial difficulties is overwhelming. Next you need to know where to turn to get advice in Windsor on what your options are to deal with your debt. When you call a trustee consider these questions:

1. Did they take your call right away or within a reasonable amount of time? If they didn’t, do you really want to deal with them?
2. What was the telephone manner? Were they polite on the telephone, or did they treat your poorly? If you did not like their telephone manners do not deal with them.
3. Were you able to speak with a trustee or someone in a position to give you answers on the phone?

You have the right to be treated with respect when you call for assistance. You do not have to meet with someone you are not comfortable with.

When you call, you will speak with me or another Trustee, and you will meet with me personally. Call me at 519-250-8060 to discuss options that may help you.

This is a frequent occurrence after someone files bankruptcy. The short answer usually is that the creditor is calling you because they don’t know about the bankruptcy. Once you sign your bankruptcy paperwork, the trustee mails the documents to your creditors. It takes time for the paperwork to get to the right person working for you creditors. Other times a creditor sent the debt to a collection agent, but the bankruptcy papers were mailed to the original creditor. The best thing to do is to tell the creditor who calls that you filed for bankruptcy and give them the name and phone number of your trustee. If they call again, get the name and phone number of the person calling you and give that information to your trustee for follow-up.

After someone files for bankruptcy in Windsor, I am often asked about how he or she can obtain credit again. The first thing to note is that you cannot get any new credit until you are discharged. Once you are discharged, the easiest credit to get is a secured credit card. You can apply for this through various financial institutions. You should also be saving money to use as a down payment for any big purchases such as a car. The lender will probably be more willing to extend credit if you have made a large down payment.

If you have a question, send me an email.

As a Windsor based trustee, I am often asked what is better – a bankruptcy or consumer proposal. There are pros and cons of each. Here is an overview:

BANKRUPTCY:
CON:
- you lose your non-exempt assets
- you lose the ability to deal with your own assets while bankrupt, such as selling an exempt asset
- you make a payment based on your income so your monthly payment can change each month
- you get the worst credit rating

PRO:
- bankruptcy can be faster from start to finish than a consumer proposal

CONSUMER PROPOSAL:
PRO:
- you do not lose your assets
- you do not better effect on your credit rating than bankruptcy
- payments are fixed each month, your payments don’t increase if you get an increase in salary
- provides a better credit rating than bankruptcy

CON:
- it can last longer than a bankruptcy. The period can be anymore from a lump sum payment to up to 60 months

If you would like to review your situation and determine which option is better for you, call me at 310-PLAN or email me to book a no charge consultation.

As a Windsor based trustee, I often get asked if someone qualifies for bankruptcy. The requirements to file for bankruptcy are: debts greater than assets, debts greater than $1,000 and unable to pay the bills on time. However, most people we see owe more money than $1,000. If you think you need to file for bankruptcy, you first step is to call or email me and we will review your situation.