Need Help With Debt Problems?

Are you suffering under a pile of maxed out credit cards? Have you been wondering how to manage debt problems? If you are feeling overwhelmed with debt, filing for bankruptcy or filing a proposal (in Ontario) might help your situation, and resolve your debt problems permanently.

Determining whether you should file for bankruptcy or a consumer proposal can be a difficult decision. Let us help you figure out if either of these two options can solve your debt problems.

How to manage debt problems. Filing bankruptcy in Ontario is easier with a licensed insolvency trustee.

Will filing for Bankruptcy solve all my Debt Problems?

The basic answer to this question is yes. Filing for bankruptcy will discharge most of your debts. Bankruptcy serves to eliminate your unsecured debts.

If you have secured debts, such as a mortgage or a vehicle loan, you can elect to continue to pay those debts. Or you can include them in the bankruptcy.

If however you do choose to include secured debts, then the secured creditor is entitled to sell the security it holds, such as your house or car.

If you’re not sure whether your debts are unsecured, secured or both, then you should talk to a licensed insolvency trustee in Niagara in order to determine what kinds debts you are dealing with.

A trustee will make sure you know what type of debts you have and what options you have in the face of your debts.

Debt problems becoming out of control? Seek help from a licensed bankruptcy trustee.

Unsecured Debt

Bankruptcy really can only serve to discharge unsecured debts. Typically, these types of debts include credit card debt, unsecured personal loans, lines of credit etc.

Unsecured debts typically carry higher interest rates than secured debts do. Because unsecured creditors assume more risk (as they do not hold any assets as security), they typically charge a premium on the loan. The higher the risk the lender assumes, the higher the interest rate.

Tax Debt

Outside of insolvency proceedings, dealing with the Canada Revenue Agency (CRA) for tax debt is usually different than dealing with typical unsecured creditors.

The CRA will usually not give you as long a period of time to pay back your tax debts. They are not like a lending facility. The CRA can typically impose harsher penalties than other creditors. If they decide to take collection action against you, they have many more remedies available to them than a conventional unsecured creditor.

The CRA can garnish your wages, freeze your bank account and even register a tax lien against your property without obtaining a conventional court order. They can also do this without even putting you on notice beforehand.

When you have significant debt with the CRA, we suggest that you don’t try to do get out of the debt alone.

Speak to a licensed insolvency trustee to make sure you know what all your options are in order to mitigate your exposure to the CRA and its broad collection powers.

Niagara debt help.

Secured Debt

Secured debts can be included when you declare bankruptcy.

As previously mentioned, if you do include secured debts in your bankruptcy, and accordingly, discontinue payments on them, then the secured creditor has the right to sell their security (the asset that is secured).

If the security is not sufficient to satisfy the claim of the secured lender then the unsecured portion becomes a dischargeable unsecured claim in your bankruptcy.

However, if you file for bankruptcy and choose to continue making payments on your secured loans, but then default on the secured loan(s) sometime after filing for bankruptcy, then any deficiency or unsecured portion would survive your bankruptcy.

There are some debts such as family responsibility (support), student loans, overpayments and debts incurred by fraud that are not dischargeable in bankruptcy. See section 178 of the Bankruptcy and Insolvency Act.

Filing for bankruptcy in Niagara.

You’re Not Going to Lose Everything

Many people believe that going bankrupt means you’ll have to give up everything you own. This isn’t entirely true.

In Canada there are certain exemptions that differ in every province. These exemptions direcly affect those assets that you can keep after you declare bankruptcy.

In Ontario the exemptions are as follows:

  1. Motor vehicle up to $6,600.00
  2. Household furnishings and appliances up to $13,150.00
  3. Necessary clothing, no limit
  4. Farming tools up to $29,100.00
  5. Principal residence maximum $10,000.00
  6. Trade Tools up to $11,300.00

What happens when you claim bankruptcy.

Crawford, Smith & Swallow can Help You Become Debt Free!

Crawford, Smith & Swallow Inc. is a team of licensed insolvency trustees with over 70 years of experience in the Niagara region.

If you’re struggling with debt problems and don’t know where to turn, come in for a free consultation.

We will explain your options to you and help you decide what to do.

We are confident we can help you get your financial affairs back on track.

Niagara Debt Help