How to Manage Debt Problems When You Are Drowning in Debt?
Need Help With Debt Problems?
Are you suffering under a pile of maxed out credit cards? Have you been wonderinghow 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.
Will filing for Bankruptcy solve all my Debt Problems?
The basic answer to this question is yes. Filing for bankruptcywill discharge most of your debts. Bankruptcy serves to eliminate your unsecured debts.
If you havesecured 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.
Secured Debt
Secured debtscanbe included when you declare bankruptcy.
As previously mentioned, if you do include secured debts in your bankruptcy, and accordingly, discontinue payments on them, thenthe 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) sometimeafterfiling 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 arenot dischargeable in bankruptcy. See section 178 of theBankruptcy and Insolvency Act .
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:
- Motor vehicle up to $6,600.00
- Household furnishings and appliances up to $13,150.00
- Necessary clothing, no limit
- Farming tools up to $29,100.00
- Principal residence maximum $10,000.00
- Trade Tools up to $11,300.00
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.
