• Avoid bankruptcy and protect assets
  • Prevent creditors from taking further legal or collection action against you
  • Stop wage garnishments, interest and penalties
  • Bankruptcy and Insolvency Act forces creditors to participate
  • Ability to compromise debts
  • Flexible payment terms
  • Allows you to protect assets that would be affected by filing personal bankruptcy

  • Anyone whose total debts, excluding the mortgage on the principal residence, are less than $250,000. For larger debts a Division I Proposal is filed.
  • Two people can file a joint consumer proposal provided that they have a financial relationship and the majority of their debts are joint
  • Individuals that owe over $250,000 can file a Division I Proposal

Generally speaking:

  • Bankruptcy legislation in Canada is designed to help an honest, but unfortunate debtor, get a fresh start
  • Bankruptcy legislation is not designed to make it impossible for you to live or to rebuild your credit rating
  • Filing personal bankruptcy ends your legal obligation to pay your unsecured creditors and gives you a way to be discharged from your debts
  • Immediately stops all creditor collection action including wage garnishments
  • Provided you make the required payments, filing personal bankruptcy doesn't affect secured creditors (mortgages & car loans)
  • If you have surplus income you will have to pay a portion of your surplus to your creditors
  • Many assets, but not all, are exempt from seizure by creditors

No. A goal of the bankruptcy legislation is that individuals filing personal bankruptcy get a fresh start. Therefore, certain assets are deemed exempt from seizure by creditors. 

You need to do one of the following:

If you owe money to your creditors and do not make payments your creditors may take legal action against you. The result of this legal action is something called a judgement. A judgment is a court order that allows your creditors to deduct payments directly from your wages and to seize assets.

Your credit rating is like a report card. Having money problems, filing personal bankruptcy or making a consumer proposal will result in a bad mark on your credit report card. Therefore to rebuild your credit rating you have to get as many good marks as possible. The only way to get a good mark is to borrow money and pay it back within the time restrictions. The way to get a bank or credit card company to lend you money despite your poor credit rating is to:

  • Have a co-signer
  • Obtain a secure credit card

Complete the relevant form to receive your free credit report by mail:

Debt Consolidation Loans are a popular debt management option for people who are experiencing money problems.

Using a consolidation loan to manage your personal debts will:

  • Consolidate your personal debts into one monthly payment
  • Reduce interest charges
  • Will not damage your credit rating

  • More assets than personal debts (not insolvent)
  • High income and can afford to pay all debts including interest
  • Own assets that can be used as collateral for loan
  • An excellent credit rating

A debt management plan is an informal arrangement negotiated between yourself and your creditors by a credit counsellor.

Credit counsellors CAN help you by:

  • Providing budgeting and money management advice
  • Filing a debt management plan
  • Helping you communicate with your creditors

Credit counsellors CANNOT help you to:

  • Filing a consumer proposal
  • Deal with government debts
  • Compromise the total amount that you owe
  • Stop, by legislation, creditors from garnisheeing your wages

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