What are my Options?

Contents

Informal Agreements with Creditors (credit counseling) 

Advantages:

• Avoids personal bankruptcy or formal proposal

Disadvantages

• Not binding on all of the creditors
• Creditors can proceed to legal action meaning you may still be garnisheed by a creditor not wanting the offer presented.
• Not available for all creditors such as income tax, GST debts, employment insurance
• Difficult to negotiate where there are a large number of creditors
• R7 on your credit bureau without the protection of the legislation
• Reported 3 years after completion on your credit record
• If the plan is more than 36 months the chance of default is higher
• Costs of the plan may outweigh the benefits

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Proposals

Advantages:

• Immediate protection from creditors, no telephone calls, no legal action
• Binding on all unsecured creditors upon acceptance, the majority passes the proposal and all creditors are part of the proposal
• Creditors cannot garnishee wages or seize assets, except FMEP
• Proposal can be a lump sum repayment or monthly payment plan and does not require full payment of debt. (i.e.   20% or 25% of debt)
• No interest
• Payments are based on your income and ability to pay
• Your exempt assets are not affected
• R7 rating on credit report and remains on your record for 3 years after completion of the proposal
• Trish Eddy-Wright and Ann Clarke are both federally licensed trustees
• The legislation dictates that the trustee act both for the individual and the creditor
• Trustees are monitored by the federal government in Ottawa and the Office of the Superintendent of Bankruptcy may be able to assist you if the trustee is not performing his/her duties in accordance to legislation
• Trustees are supported by the creditor and legal industry

Disadvantages

• Proposal must provide for a better return to creditors than bankruptcy
• Does not affect debts for alimony, maintenance or student loans
• If the proposal is not accepted there are two costs: one for proposal and one for bankruptcy

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Bankruptcy- Click here for more information

( Is the last choice but the 1st step to get back on track, stop any garnishees ,   stop the harassing telephone calls and make more money available. )

Advantages

• Immediate protection from creditors
• Process is usually completed in nine months
• Cost is usually less than other options
• Provides one-on-one counseling with a licensed counselor
• Surplus income may be applicable. This will be discussed with you before you file.
• No co-signer required
• Student loans can be written off where the debt is over 10 years old
• Exempt assets are allowed by provincial law
• Can operate a business - sole proprietorship
• Income tax, GST debts and ICBC debts are all included
• Employment Insurance penalty and interest is written-off
• 1 st time bankrupts can receive an automatic discharge at the end of nine months where there is no surplus and all duties are preformed
• Reestablishing credit can happen after bankruptcy
• Individuals are protected by provincial and federal legislation
• Payments are less than payments to the unsecured creditors
• Shortfalls   as a result of a foreclosure are included in the debts
• Includes all debts incurred while operating a business while a director or where guarantees were provided
• Trish Eddy-Wright and Ann Clarke are both federally licensed trustees
• The legislation dictates that the trustee act both for the individual and the creditor
• Trustees are monitored by the federal government in Ottawa and the Office of the Superintendent of Bankruptcy may be able to assist you if the trustee is not performing his/her duties in accordance to legislation
• Trustees are supported by the creditor and legal industry

Disadvantages

• R9 credit rating for 6 years after discharge with Credit Bureau  
• May lose non-exempt assets (e.g. RRSP, RESP)
• Cannot be a Director of a limited company while bankrupt
• Some debts may not be released, such as student loans less than 10 years old or FMEP

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Financial Help: Proposals, Credit Counselling & Bankruptcy

Eddy-Wright & Associates Inc. is here to help. Our licensed Trustees, Trish Eddy-Wright in Kelowna and Ann Clarke in Kamloops , know the law and can direct you on the road to a fresh start.

With branch offices in Kelowna and Kamloops, Eddy-Wright & Associates Inc. is here to help with the following options:

• Credit Counselling
• Consumer Proposal
• Bankruptcy
• Budgeting and Counselling Services
• Restructuring
• Consulting

Contact us:
- Kelowna office (250) 717-0222 or 1-866-717-0222

- Kamloops office (250) 377-3255 or 1-866-387-3255

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