Don Allen - Bankruptcy Trustee & Receiver
Trustee & Receiver
1-888-504-1511
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Bankruptcy Barrie - Don Allen & Associates Trustee in Bankruptcy Toronto

Personal Money Problems

Help for Financial & Debt Problems 

You are feeling stressed and pressured with unmanageable debts. You might have tried to manage your debt by trying different debt management options. Often, these options are not practical for you because you need solutions - Fast Help NOW. We can provide immediate relief from your financial stress. We can review with you the possibility of filing a consumer proposal, which is an alternative to filing personal bankruptcy.

If a consumer proposal is not for you, we can help you file personal bankruptcy to solve your financial problems. Find out the real costs of your recovery options using our Debt Options CalculatorWe will help you understand and solve the financial issues and questions you have, such as: 

  • Don,
    Thanks for all your help with my consumer proposal. Your explained my options very clearly in a non-judgmental way and helped guide me through the process very professionally. I really feel you and your staff have helped me have a new fresh start.
    — L.A.W

  • When we first went to Don Allen & Associates, days were hard and nights were harder. We didn't have enough time to breath between phone calls and bill payments. Don took us on looked over our case and made us feel like it was ok, we were not alone and we will get through it. Now after what felt like a life time of suffering we have a car, a credit card and for the first time we can answer our phone. Along with the amazing support from Kirsten we had a life changing experiences. Thank you Don 
    —B.J.R

  • Thank you for your professionalism and kindness during the lengthy and heart wrenching process of my bankruptcy. I was going through miserable days and sleepless nights after losing my job and exhausting my entire savings. Your guidance gave me a hope to live. Anyone who is misfortunate enough and being crushed under the weight of debt should consult you for professional advice and guidance, with human touch.
    Once again, many thanks.
    —SAM

Call us at 888-504-1511 or email us for fast help NOW - to let us help you get control of these problems in a FREE consultation in person or over the phone. We review your options and find out if it is realistic to consider filing a Consumer Proposal to avoid bankruptcy or whether Bankruptcy makes most sense in your situation.

We will then get information about yourself by completing our Information Worksheet. Then we will meet at our office at a time that works for you and get the process started to relieve the pressure and start on the Road to Recovery.

Credit card debt – when we file for you a consumer proposal or bankruptcy, unsecured  creditors (like credit card companies) will be stayed ( put on hold) from taking further action to collect or charging further interest for debts up to your filing date. You will not have to make further monthly payments to them for these debts, as you have in the past, and whatever credit cards you still have will be turned over to the Trustee when you sign up.   See the real cost of your credit card debt by trying our Debt Options Calculator

Collection agency calls – after we file a consumer proposal or bankruptcy for you, these will stop shortly thereafter. For more information see Collection Agencies

Credit reports – see our description on how to obtain, understand and manage your credit report – Credit Reports

Not sure what I owe – If you are not sure of who or what you owe, see Credit Reports to find out how to obtain your credit report to find out who and what you owe

Assets to keep – Once you are bankrupt you will be required to turn over your assets to a Trustee. These assets will then be sold and the money earned will be distributed amongst your creditors. However, not all assets will be turned over and sold.  Under Ontario law there is a list of items which are exempt from being sold.
Some bankruptcy exemptions include:

  • Maximum of $ 5,650 in personal possessions (clothing, jewelry etc.)
  • Maximum of $5,650 for motor vehicles (cars, trucks, etc.)
  • Maximum of $11,300 for furnishings
  • Maximum of $11,300 for any tools of trade (equipment that is used to earn a living)
  • RRSP's except for the last 12 months of contributions
  • Certain qualifying life insurance

House – This a complicated question and the answer will vary depending on your individual circumstances. Generally, if you don’t have significant equity in your house, then claiming bankruptcy should not affect your house. If you can afford to keep up all payments related to the house, you can keep it. See your House.)

Car
In Ontario, a bankrupt is permitted to keep one motor vehicle worth up to $5,650. If your car has no liens and is worth more than $5,650, you may keep the car by paying the Trustee the difference for the benefit of your creditors. Thus, if your car is worth $6,650 with no liens, you can keep the car by paying $1,000 to your Trustee for distribution to your creditors.  If you lease the car, you can keep the car if your lease payments are current and you are able to keep up the payments. Again, if there is more than $5,650 of equity in the car, you will need to pay the Trustee that excess toward your estate. In either case, if you can keep the car, you will need to produce proof that your insurance for driving the car is paid up to date during your bankruptcy.

Tax debts – to Canada Revenue Agency (CRA) are included with other unsecured debts in bankruptcy or a consumer proposal and filing stops interest from continuing to be added. If CRA has issued a lien, they are a secured creditor for this. If they have garnished your wages, this will be stopped. See more at Canada Revenue Agency.

Garnishments Under the Ontario Wages Act, the maximum a creditor can garnishee is 50% of your gross wages.
If a creditor has already gone to court and obtained a garnishee summons allowing them to garnishee your wages, the wage garnishment will only stop once it is paid, or if the creditor agrees to stop it. The longer you wait to deal with the wage garnishment, the more you will lose from each paycheque.

If you are threatened with a wage garnishment, or are currently being garnisheed, call us immediately to determine your options. In most cases, filing a consumer proposal or personal bankruptcy will stop a wage garnishment from banks, credit card companies, CRA, pay day loan companies, credit unions and most other types of creditors. If you file a consumer proposal or a personal bankruptcy with us, we can stop the garnishment of your wages within hours after you file by us notifying your employer directly. Note that wages garnished for child support or spousal support cannot be stopped by the filing of a consumer proposal.

Judgments – judgment actions are stayed (put on hold) once we file a consumer proposal or bankruptcy for you.

Fines – fines are not included in a bankruptcy or consumer proposal and need to be paid. This can be done over a period of time. See Discharge.

Alimony payments – these must still be paid and are not eliminated by bankruptcy or a consumer proposal .See Discharge

Student loans – If you have been out of school for 7 years, these are eliminated in a bankruptcy. If you have been out of school between 5-7 years, you can apply for relief on account of hardship. If you have been out of school for less than 5 years, the loans remain.

If you have been out of school for less than 7 years, you could try contacting student loans office to negotiate a new payment arrangement.

Filing a consumer proposal with us is an alternative and often costs less. A consumer proposal is a legal settlement which allows you to repay only a portion of your debts and still have them eliminated.

Bankruptcy will clear your Ontario student loan only if you've been out of school for more than seven years. If you have other significant debts, bankruptcy may still be a good option. Filing bankruptcy can help clear other debts and make repaying your student loan more manageable.

Medication, Gambling – medication is an allowable expense as part of your standard living requirements. If you have an addiction, we will help you deal with it.

Employer – we do not normally contact your employer unless you need us to help to eliminate a garnishment of your wages.

Joint debts with my partner – As long as your debts belong solely to you, then claiming bankruptcy should have no impact on your spouse or their credit rating. If your spouse has not co-signed or guaranteed any of your debts then those debts belong solely to you.
However, if your spouse has co-signed any of your debts, they as well become fully liable if you file for bankruptcy.

A supplementary credit card has the same account number as the primary credit card. If your spouse has used a supplementary credit card with their name on it, they will be considered jointly responsible for all debts accumulated under that credit card account. This means that if you – as the primary card holder – claim bankruptcy, your spouse will be liable for all the debt accumulated, regardless of whether or not they signed the initial credit card application form.

In Ontario, if you get divorced, all matrimonial property is split between the husband and wife. However, with joint debts, if you get divorced the debt is not split and you both remain equally responsible to ensure all debts are fully repaid.

Even if you have a legal separation agreement which states that each person is to assume half of any joint debts, this will not release you from your spouse's portion. The reality is, each of you cannot owe half of any joint debt and it is not a 50/50 split. As soon as one party defaults on their payments, or claims bankruptcy, then a creditor can legally pursue the other spouse for all amounts outstanding.

How much can I make – we encourage you to make as much as possible. If your income reaches a certain level, you have to contribute a portion of it monthly toward your bankruptcy - see Surplus Income.

One of your duties in your bankruptcy is to submit monthly Statements of Income and Expense to us to help you through the process and see if you are required to make Surplus Income Payments to your estate. The Government has set net monthly income amounts for a person or a family to maintain a reasonable standard of living in Canada. Every dollar which a bankrupt's family unit makes in net income (after taxes) above the level set by the Government is subject to a Surplus Income payment of 50% of that excess amount, to be paid monthly to the Trustee, while a person remains a bankrupt, until discharge.

Calculating Surplus Income Payments

The Bankruptcy and Insolvency Act (“BIA”) requires bankrupts to submit monthly Statements of Income and Expense to their Trustee for the purposes of determining if the bankrupt has Surplus Income. The Government has set net monthly income thresholds for a person or a family to maintain a reasonable standard of living in Canada. Every dollar that a bankrupt family makes above the level set by the Government is called surplus income, and the bankrupt is required to pay to the Trustee for the bankrupt estate 50% of this Surplus Income while they are bankrupt, and if they have Surplus Income, a first time bankrupt will be discharged in 21 months instead of 9 months.

Use our Surplus Income Worksheet to help you determine if you have Surplus Income and what your required Surplus Income Payments will be. We will help you with any questions.

How long is the process - Discharge - The goal of claiming bankruptcy is to obtain your bankruptcy discharge. 
A bankruptcy discharge is legal document that officially and permanently eliminates your debts and is the beginning of your Road to Recovery.
By receiving your discharge, you are legally released from all debts covered under your bankruptcy. This means you are no longer liable for payments and you are legally protected from your creditors for those debts to the date of bankruptcy. See more about Discharge

How do the Trustee’s fees get paid? – in a bankruptcy or a consumer proposal, the Trustee is acting on behalf of you and the creditors as well.  The fees are paid out of the monies you contribute to the bankruptcy or consumer proposal and are set by the Bankruptcy and Insolvency Act.

How much will a bankruptcy cost?
The exact cost of filing a bankruptcy varies, as it is based on your monthly income, expenses, family size and assets. Without knowing the specifics of your individual situation we cannot give you the exact costs. However, we can walk you through all the calculations that a Trustee uses when determining the costs of a bankruptcy.

The different types of costs associated with filing a bankruptcy include: Monthly Contributions, Surplus income payments, and Assets.

Monthly contributions:
You are required to make a minimum contribution to your bankruptcy for each month that you are bankrupt. This contribution covers administrative costs such as: Government fees, your Trustee's time, mailing etc.

Surplus Income payments:
See Surplus Income Worksheet

Assets
The final "cost" of a bankruptcy is the assets that you lose when you go bankrupt. In order to be rid of your debts you will need to surrender certain assets to your Trustee.
The most common assets you will be required to pay to the Trustee for the benefit of your creditors are:

  • Equity in your house
  • The value of a car with no loans (over the $5,650 exemption limit);
  • Investments (like Canada Savings Bonds or other non-exempt assets);
  • Quarterly GST credits - These will be automatically forwarded to the Trustee;
  • Tax refunds for prior years that you haven't yet filed and for the entire year that you are bankrupt;
  • Any RRSP contributions that you have made in the last year (but not your RRSP)

The actual costs of a bankruptcy are somewhat complicated and vary by individual case. Contact us for a FREE initial discussion to get a better idea of what it will cost you.

Consumer Proposal vs. Personal Bankruptcy
Click here for a comprehensive comparison.

 

Bankruptcy Assistance Program – the Bankruptcy Assistance Program is potentially available to individuals who cannot afford the regular cost of bankruptcy. We participate in this program and would be happy to see whether this can apply to your situation.

 


 

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