Archives for February, 2008

Douglas Hoyes and I appeared on AM 640 Toronto Radio last Saturday to discuss filing bankruptcy in Toronto.

During the hour long show I took a call from a lady who had filed and completed her bankruptcy quite a while ago, but her student loans were not included in her bankruptcy because they were less than 10 years old.  Now, she wanted to know what her options were.

By way of background, the current laws are such that if you have a student loan and it has been less than 10 years since you have been out of school, the student loan cannot be included in your bankruptcy (or consumer proposal).  The logic behind this government policy is that the “knowledge” you obtained while your were educated at the government’s expense will stay with you for a long time, so you are not relieved of this debt if you file for bankruptcy within 10 years of finishing school.  This 10 year rule is slated to be reduced to 7 years, but this change may not come into play until the fall of 2008. (More information can be found on the Canada student loan bankruptcy web site).

 

And if the courts refuse her?  Well, she can go bankrupt a second time as 10 years have gone by.  Not my preferred recommendation, but an option none the less.  

If you have found yourself in a similar situation, call our Toronto bankruptcy team at 310-PLAN (310-7526, no area code required) or E-mail us to arrange a free initial consultation. We can help you work on a solution to your student loan dilemma. 

Sounds like a strange thing to say when you are talking about personal bankruptcy, but it is in fact one of the most frequent statements when we talk to “survivors” of bankruptcy.

I meet with clients every day that are being crushed by debt, sometimes an event has driven them there. Illness, relationship breakdown, the failure of a business, all of these events can result in unmanageable money problems. Sometimes people do it to themselves, drug addiction and gambling often lead to debts that can’t be paid. Whatever the cause it is very often the act of taking back control and taking action by seeing a trustee and moving towards recovery of their finances that is the trigger for significant changes in the root causes of money problems.

Gamblers get help and stop gambling, addicts get treatment and kick , relationships are resolved ( and sometimes recovered ) and people turn around their lives. Money problems don’t happen without reason and often the reasons have nothing to do with money. It is one of the most satisfying aspects of helping people with their money problems, I get to have a part in getting people back up on their feet and moving forward.

If you are facing money problems, whatever their cause, you owe it to yourself to start the process of recovery. You will be surprised the effect of taking control of your finances has on the other parts of your life. Call 310-PLAN today and take the first step.

We prepared a detailed report with our our comments on proposed changes to the bankruptcy rules in Canada.

Since the Committee started hearings in November we are the first Toronto area personal bankruptcy trustees to appear before the Committee. The Senate is preparing a report on future changes to bankruptcy rules, and up to this point most of the witnesses before the Committee have been lawyers and lobbyists. We believe it is very important for the average person’s voice to be heard, and since it is unlikely that any bankrupt person could afford to travel to Ottawa to appear before the Committee, we made the trip to give the average person’s perspective on financial problems.

I started by reminding the Committee that the average bankrupt person is just like the average Toronto resident, except they have probably gone through a job loss, marriage break up, or perhaps a medical problem that forced them to use credit, and now leaves them with more debt than they can manage. They are what bankruptcy law refers to as the "honest but unfortunate debtor".

Ted then explained that consumer proposals are a great alternative to personal bankruptcy for many residents of Toronto, and we strongly support increasing the debt threshold from $75,000 to $250,000 for eligibility to file a consumer proposal. However, while we have a success rate of over 95% for having our proposals accepted by creditors, we did suggest further changes that will make consumer proposals and even better process for Toronto residents with high levels of debt.

We will continue to fight for bankruptcy rules that are fair for everyone.

If you live in the Toronto area and want our team of bankruptcy and consumer proposal professionals to work with you to solve your debt problems, call our experts at 310-PLAN (310-7526, no area code required) or E-mail us to arrange a free initial consultation. We have demonstrated our expertise in Ottawa, so put us to work to help you today.