Personal Bankruptcy

Is Credit Counseling Better Than Personal Bankrupt...

J. Douglas Hoyes, CA, Trustee — Mon, 09 Oct 2006 11:40:00 +0000

Is Credit Counseling Better Than Personal Bankruptcy?

Credit counseling (called credit counselling in Canada) is usually a two step process. First, it involves working with a credit counselor to review your budget and determine your debt management alternatives. The second step is often for the credit counselor to put you on a Debt Management Program where you make monthly payments to your credit counselor, and they distribute the money to your creditors.

It is this second part, the Debt Management Plan, that is often thought of as a a bankruptcy alternative.

Credit counseling may be preferable to a personal bankruptcy because you are not required to give up your house or other assets, and you won’t have a bankruptcy appearing on your credit report, so for those reasons credit counseling may be better than personal bankruptcy.

However, with credit counselling you are required to make monthly payments, and you are required to repay your debts in full. If you have lost your job or have a reduced income, or if your debts are too large to repay over a three to five year period, then credit counseling is not for you.

Start by making a monthly budget to see what you can afford to pay. Then, talk to a credit counselor, a licensed bankruptcy trustee if you live in Canada, or a bankruptcy attorney if you live in the United States, and after reviewing your options you can make the decision about whether credit counseling or personal bankruptcy is the correct option for you and your family.

Filed under budget,
credit counseling, personal bankruptcy, bankruptcy

Here's a post in response to a question we often g...

J. Austin — Tue, 15 Aug 2006 19:00:00 +0000

Here's a post in response to a question we often get. Many people ask, "does my credit history follow me over the border, if I move to the US?"

In general the answer to this question is no, unless you actually have some American based credit, such as American credit cards. This however may not always be true, most bankruptcy experts recommend that you make sure to deal with any credit issues you have before you move.

Tagged as: bankruptcy, personal bankruptcy

Does your credit follow you across the border? If...

J. Austin — Wed, 14 Jun 2006 18:38:00 +0000

Does your credit follow you across the border?

If you are considering moving from Canada to the U.S. there are a couple of common questions:

Will the bankruptcy make my move harder?
Will it limit my ability to leave the country?
Will it affect my visa or make it harder to get credit in the U.S?

Just as a positive credit rating would not be taken into consideration when moving across the border, neither will a negative one or the filing of a bankruptcy. However, during bankruptcy you are not allowed to have any credit cards and all existing credit cards must be turned over to your trustee. You will also find that it can be more difficult to obtain a credit card after bankruptcy. Now whether you will find the same level of difficulty getting credit in your new country is hard to say, the key thing that you must keep in mind is that Equifax is a multi-national corporation and serve both the US and Canada, which suggests they can very easily access information pertaining to either side of the border. In any case you should ask your local bankruptcy expert if you are not sure.

What's better: a Debt Consolidation Loan or Person...

J. Douglas Hoyes, CA, Trustee — Mon, 17 Apr 2006 20:51:00 +0000

What's better: a Debt Consolidation Loan or Personal Bankruptcy?

There is no obvious answer to this question. It depends on your situation.

If you have a good income, good credit, and a manageable amount of debts, a debt consolidation loan is probably your best option. You can get a credit card debt consolidation loan to reduce the interest rate you are paying on your credit cards, or you could get a home equity debt consolidation loan to use the equity in your home to consolidate your other debts. It may even be possible to refinance a student loan.

Even if you have bad credit, some lenders will consider you for a bad credit debt consolidation loan.

However, if your credit is very bad, a debt consolidation loan may not be possible. In that case, personal bankruptcy may be your only option. Our advice: talk to your bank or mortgage lender about a debt consolidation loan. If they cannot do it, then consider, as a last resort, filing personal bankruptcy.

Questions to ask your Personal Bankruptcy Advisor ...

J. Douglas Hoyes, CA, Trustee — Fri, 12 May 2006 20:30:00 +0000

Questions to ask your Personal Bankruptcy Advisor

In Canada, to file personal bankruptcy you meet with a bankruptcy trustee. In the United States, you meet with a bankruptcy attorney. Regardless of who you meet with, there are some basic questions you should ask.

First, find out how personal bankruptcy will impact on you. How will to impact on your credit, and your ability to borrow again in the future.

Second, ask how much filing personal bankruptcy will cost, both for professional fees and for court fees and other filing costs.

Finally, ask about bankruptcy alternatives; personal bankruptcy is a last resort, so be sure you understand all of your options.

Once you have the answers to these questions, you will be able to decide if filing personal bankruptcy is the correct option for you.

Personal Bankruptcies Reach Record High in 2005 I...

J. Douglas Hoyes, CA, Trustee — Fri, 24 Mar 2006 23:59:00 +0000

Personal Bankruptcies Reach Record High in 2005

In both the United States and Canada, 2005 was a record year for personal bankruptcies.

According to the U. S. Courts Bankruptcy Statistics webpage, the number of Americans filing for personal bankruptcy jumped 30 percent in 2005 to the highest level in history. New U.S. personal bankruptcy laws took effect on October 17, 2005, causing a large increase in Chapter 7 personal bankruptcy filings before the new more restrictive rules became law.

Although no new Canadian laws came into effect in 2005, the number of personal insolvencies exceeded the 100,000 level for the first time in 2005.

As debt levels continue to increase, it is expected that personal bankruptcy rates will continue to increase in the future.

Is it Wrong to File Personal Bankruptcy? This is ...

J. Douglas Hoyes, CA, Trustee — Thu, 16 Mar 2006 13:38:00 +0000

Is it Wrong to File Personal Bankruptcy?

This is a common question. You know you owe the money, and you feel guilty that if you go bankrupt you are hurting your creditors.

If you have committed fraud by deliberately running up your credit cards when you knew you couldn't pay them, then yes, that is fraud, and that is wrong.

Most people, however, intended to repay their debts, but then they lost their job, got divorced, or had a medical condition that prevented them from working, and they got behind on their bills. Once your wages are garnisheed, for many personal bankruptcy may be the only option.

Before you make the final decision, consider all of your bankruptcy alternatives so that you are making an informed decision.

Can Personal Bankruptcy Help You Get a Job? This ...

J. Douglas Hoyes, CA, Trustee — Fri, 17 Feb 2006 23:40:00 +0000

Can Personal Bankruptcy Help You Get a Job?

This may seem like a strange question, but in some cases, yes, personal bankruptcy can help you get a job.

Many employers today will do a credit check on you before they will offer you a job. If they see that you have a lot of debts, they may decide not to hire you, because they don’t want the hassle of dealing with potential garnishment notices. They also don’t want an employee that is constantly worried about their personal finances; it can distract them from their job.

By filing for personal bankruptcy, you deal with your debts, and can get on with your life, without worrying about calls from creditors at your new job.

Of course for some jobs being bankrupt may be a problem, so Americans should consult a bankruptcy attorney and Canadians should contact a licensed trustee before deciding if personal bankruptcy will help or hurt your job prospects.

If I file for personal bankruptcy, will I ever get...

J. Douglas Hoyes, CA, Trustee — Tue, 14 Feb 2006 00:37:00 +0000

If I file for personal bankruptcy, will I ever get credit again?

Credit is everywhere in North American society. Very few people could buy a house or a new car without credit. People in financial trouble that filing personal bankruptcy in Canada, or Chapter 7 bankruptcy in the United States will mean that they can never get credit again.

In fact, once you are discharged from bankruptcy, it is possible to re-establish your credit.

First, start saving money. By saving money you demonstrate to potential lenders that you have learned to handle money. Your savings can also be used as a down payment on a car or other large purchase.

Next, you could apply for a secured credit card to re-establish credit.

By continuing to save money you will find that you can re-establish your credit relatively quickly, so make a a budget and get started saving money today.

Collection Agency Limitations in Canada If you fe...

J. Austin — Tue, 10 Jan 2006 16:55:00 +0000

Collection Agency Limitations in Canada

If you feel you are being harassed by Colletion agencies you can do something about it. There is provincial legislation in place that limits what collection agents are entitled to do. If you wish to complain about a collection agency you can contact their provincial or territorial office of consumer affairs.

Alberta
Alberta Government Services
Consumer Services Branch
13th Floor, Commerce Place
10155&-102 Street
Edmonton AB T5J 4L4
Tel: (780) 427-4088
Toll Free (in Alberta): 1-877-427-4088
Fax: (780) 422-9106
Web site: http://www3.gov.ab.ca/gs/information/consumer/

British Columbia
Director of Debt Collection at 1-250-356-6035 or by fax at 1-250-953-3533.
Director of Debt Collection
PO Box 9297, Station Prov. Govt
(Wharf and Fort)
Victoria BC, V8W 9J8

Manitoba
Consumers Bureau
Manitoba Finance
302-258 Portage Avenue
Winnipeg MB R3C 0B6
Tel: (204) 945-3800
Toll Free: 1-800-782-0067 (in Manitoba)
Fax: (204) 945-0728
E-mail: consumersbureau@gov.mb.ca
Web site: www.gov.mb.ca/finance/cca/consumb

Newfoundland and Labrador
Consumer and Commercial Affairs Branch
Department of Government Services and Lands
2nd Floor, Confederation Building West Block
PO Box 8700
St. John's NF A1B 4J6
Tel: (709) 729-2570
Fax: (709) 729-4151
Web site: http://www.gov.nf.ca/

New Brunswick
Justice Services Division
Office of the Rentalsman and Consumer Affairs Branch
Centennial Building
PO Box 6000
Fredericton NB E3B 5H1
Tel: (506) 452-2583
Fax: (506) 453-3651
Web site: http://www.gnb.ca/0062/index-e.asp

Nova Scotia
Mail Room, 8 South
Maritime Centre
1505 Barrington Street
Halifax, NS
B3J 3K5
Tel: (902) 424-5200
Toll Free: 1-800-670-4357 (in Nova Scotia)
Fax: (902) 424-0720
Web site: http://www.gov.ns.ca/snsmr/

Northwest Territories
P.O. Box 1320
Yellowknife NWT X1A 2L9
Tel: (867) 669-2377
Fax: (867) 873-0169
Web site: http://www.maca.gov.nt.ca

Nunavut
Community Government and Transportation
Box 1000, Station 204
Igaluit, NU X0A 0H0
Tel: (867) 975-5300
Fax: (867) 975-5305

Ontario
Government Services
Consumer Services Bureau
33nd Floor, 250 Yonge Street
Toronto ON M5B 2N5
Tel: (416) 326-8800
Toll Free: 1-800-889-9768
Web site:http://www.cbs.gov.on.ca/mcbs/english/welcome.htm

Prince Edward Island
Consumer, Corporate and Insurance Division
Fourth Floor, Shaw Building
95 Rochford Street
PO Box 2000
Charlottetown PEI C1A 7N8
Tel: (902) 368-4550
Fax: (902) 368-5283

Quebec
Office de la protection du consommateur
Room 450, 400 Jean-Lesage Boulevard
Quebec QC G1K 8W4
Tel: 1-888-672-2556
Fax: 418-528-0976
Web site: http://www.opc.gouv.qc.ca

Saskatchewan
Consumer Protection Branch
Department of Justice
1871 Smith Street
Regina SK S4P 3V7
Tel: (306) 787-5550
Toll Free (in Saskatchewan): 1-888-374-4636
Fax: (306) 787-9779
Web site: http://www.saskjustice.gov.sk.ca/cpb/default.shtml

Yukon
Department of Community Services
PO Box 2703
Whitehorse YK Y1A 2C6
Tel: (867) 667-5111
Toll Free: 1-800-661-0408
Fax: (867) 667-3609
Web site: http://www.gov.yk.ca/depts/community/

For more information about collection agencies in Canada visit www.bankruptcy-canada.ca

Credit Counseling and Bankruptcy: What Happens in ...

J. Austin — Thu, 15 Dec 2005 19:02:00 +0000

Credit Counseling and Bankruptcy: What Happens in the United States in Canada
In both Canada and the United States credit counseling is now part of the bankruptcy process. Credit counseling has been part of the Canadian bankruptcy process since 1992, but was only added to the American bankruptcy process in 2005.

An individual filing bankruptcy under either Chapter 7 or Chapter 13 in the United States is required to participate in a counseling session with an approved nonprofit credit counseling agency PRIOR to filing for personal bankruptcy. The certificate of completion must be included with the bankruptcy petition to start the bankruptcy.

In addition, prior to discharge an individual must complete a financial education course that will discuss budgeting, rebuilding finances after bankruptcy, and understanding and using credit. A certificate proving you have completed the course will be required to obtain your discharge from bankruptcy.

In Canada, credit counseling is required, but only after the personal bankruptcy process begins. In Canada, an individual must have two credit counseling sessions; one during the first 10 to 60 days of the bankruptcy or consumer proposal (similar to Chapter 13), and a final session 30 days after the first session, but within the first 210 days of the bankruptcy.

In both countries the sessions will deal with budgeting and the causes of the bankruptcy.

To learn more about how credit counseling impacts on personal bankruptcy, contact a U.S. bankruptcy attorney, or a Canadian personal bankruptcy trustee.

Changes to Bankruptcy Law in Ontario Canada Effec...

J. Austin — Wed, 14 Dec 2005 20:24:00 +0000

Changes to Bankruptcy Law in Ontario Canada

Effective December 14, 2005, the Province of Ontario has amended the limits on the amounts for certain assets which are exempt from seizure by a trustee in a bankruptcy.

Basically the increases allows for inflation since they have not changed in the last 5 years.

The new values are:

$5,650 worth of personal possessions (clothing, jewelry, sports equipment, etc.);
$5,650 worth of motor vehicles (cars, trucks etc.);
$11,300 worth of furnishings;
$11,300 worth of tools of the trade (equipment that you use to earn a living); and certain types of life insurance.

Furthermore, when the new Bankruptcy rules come into effect during the summer of 2006, RRSPs will also be protected, with some exceptions.

Do I Need a Lawyer to File Personal Bankruptcy? I...

J. Austin — Fri, 09 Dec 2005 15:41:00 +0000

Do I Need a Lawyer to File Personal Bankruptcy?

In short, in the United States you do not need a lawyer to file for bankruptcy. In Canada you need a Trustee licensed by the Federal Government.

That being said, bankruptcy law is complex, and it is therefore strongly recommended that any individual considering filing for personal bankruptcy first obtain the advice of a competent bankruptcy attorney. Most bankruptcy attorneys will have a first meeting with you for free, or for a small charge, so that they can help you review your options.

In the United States if you file personal bankruptcy without legal representation, you will not be given any special consideration by the court and you will be held responsible for knowing the requirements of the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure.
This means if you miss a deadline, fail to perform a required task, or fail to respond properly to an action, your bankruptcy case could be dismissed, or you could be denied your discharge from bankruptcy, or you may lose property which you might otherwise have been entitled to keep.
In addition, the Clerk’s Office at your local bankruptcy court is prohibited by law from providing legal advice. Paralegals and typing services are also prohibited by law from providing legal advice. Only an attorney may provide legal advice. In Canada these people are called "Trustees". The following sites provide a list of attorney's and trustees by city in the US and Canada.

Residents of the United States: Chapter 7, 13 Bankruptcy Lawyers
Residents of Canada: Personal Bankruptcy Trustees

Whether you are considering filing for personal bankruptcy protection under Chapter 7 or Chapter 13, bankruptcy is a serious legal procedure, governed by federal law, and therefore the advice of a competent bankruptcy attorney is strongly recommended.

What do you get to keep when you file chapter 7 Ba...

J. Austin — Wed, 16 Nov 2005 15:13:00 +0000

What do you get to keep when you file chapter 7 Bankruptcy?

Currently there are two different sets of property exemptions that the law says you can keep. Your attorney will usually choose the most beneficial to you, based on the value and type of property you own.

Both sets of exemptions cover things like, clothing, jewelry, furnishings, automobiles, equipment used in trade or business, etc, in varying amounts, but one of the major differences is in the treatment of equity in your residence.

One set provides that a married couple may have $75,000 in net equity in your home (in some cases $150,000 depending on age and income) after deducting all encumbrances) while the other set doesn't provide specifically for equity in a residence, but provides for a catch all exemption which allows an additional $19,675.00 exemption in anything you choose, whether it is money in the bank, cash in your pocket, equity in real property etc.

You may also legally convert non-exempt property into exempt property prior to filing your case, provided it is done correctly. If not done correctly, it can result in a loss of the property and even denial of your discharge, so you usually need the help of a bankruptcy attorney in making these decisions.

Personal Bankruptcy Videos If you are looking for...

J. Austin — Mon, 14 Nov 2005 16:50:00 +0000

Personal Bankruptcy Videos

If you are looking for information about personal bankruptcy try Google video. There are a couple of good videos from Canadian bankruptcy trustees explaining the bankruptcy process and alternatives to bankruptcy. This is an easy way to learn about bankruptcy and your options.

Personal Bankruptcy in Canada
Alternatives to Personal Bankruptcy