Sean Stack Answers Your Questions
Not sure if Bankruptcy or a Consumer Proposal could be the right options for your personal debt management? Learn more with our Frequently Asked Questions, and Sean Stack’s answers.
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Yes, these include:
- Student loans that are less than seven (7) years old
- Fines and penalties imposed by the court
- Debts arising from recognizance or bail bond
- Debts arising from fraud, embezzlement or obtaining property by false pretenses
- Employment insurance overpayments
- Spousal support
- Child support
For a first time bankrupt, i.e.: someone who has never been bankrupt before, bankruptcy is usually either 9 months or 21 months depending on their income. For a second time bankrupt, i.e.: someone who was bankrupt once before, bankruptcy is usually either 24 months or 36 months depending on their income. Sean can walk you through how income affects a bankruptcy and what you can expect based on your own personal situation.
The cost of bankruptcy varies as it depends on what your household income is and also what equity you have in assets that you own. This is something that Sean will discuss with you during your free initial consultation.
If your student loans are more than seven (7) years old then yes, they can be included in a bankruptcy. If you have student loans you should contact your trustee to discuss because this can be a complicated issue that depends on what Canada Student Loans has as your end of study date but is also subject to case law based on court decisions.
Before you file for bankruptcy you will provide your trustee with a list of all your creditors. The trustee then sends notification of the bankruptcy to each creditor within five (5) days of you filing.
In most cases the only people that find out are your creditors, the Office of the Superintendent of Bankruptcy, your trustee and the Canada Revenue Agency.
In many cases yes, people who file for bankruptcy can keep their house. There are a number of factors at play including the amount of equity in your home, your ability to fit the payment into your budget and whether you are up to date on your payments. It is best to contact your trustee to find out how your home might be affected.
If your vehicle is financed and you are up to date on your payments and continue to make your payments after filing for bankruptcy then you can usually keep the vehicle. This is not the trustee’s decision; it is up to the lender that you financed with. Contact Sean to find out how this works.
If you file for bankruptcy there is a common misconception that you lose everything – this is not true. In Newfoundland and Labrador the Judgment Enforcement Act provides for certain exemptions, i.e.: things you are allowed to keep. These include:
- Equity in your principal residence up to $10,000
- One motor vehicle to a value of $2,000
- Household furniture to a value of $4,000
- Registered Retirement Savings Plans (RRSPs)
- Registered Retirement Income Funds (RIFs)
- Deferred Profit Sharing Plans (DPSPs)
- Tools of the trade to a value of $10,000
If you are wondering how these exemptions might affect you and your belongings you should contact Sean to discuss your situation.
When the Consumer Proposal is filed with the trustee there is a ‘Stay of Proceedings’ the prevents creditors from contacting your or taking action against you. The creditors get 45 days to vote on the proposal. Each dollar owing to a creditor is equivalent to one vote. If the majority of unsecured creditors vote in favour of the proposal then all the unsecured creditors are bound by it.
A Consumer Proposal can be for no more than five (5) years but depending on your situation it can be for less time as well.
The total cost of a Consumer Proposal depends primarily on what your household income is and what assets you own.
An individual who owes less than $250,000 or less, not counting any mortgages on their principal residence, may be eligible to make a consumer proposal. If an individual owes more than $250,000, not counting any mortgages on their principal residence, they may be able to file a Division I proposal and should speak to a trustee about how that would work.
A Consumer Proposal, aka Division II Proposal, is a legal process that can only be filed through a trustee in bankruptcy.