There has been a rise in personal bankruptcies in the last decade; this has been made worse by the economic downturn we all felt in 2008. Experts put the numbers at over 80% and increasing. There are a lot of reasons why people find themselves in a situation where they have so much debt, there is absolutely no way of getting out of it until just giving in and screaming for help. Life happens, people lose their jobs, people get sick to such an extent they cannot create an income and when the income dries out, there’s nothing left to take care of the mounting and unrelenting debt. If you find yourself unable to reduce debt and cannot find any other way around it, you should consider filing for bankruptcy with A.Farber & Partners Bankruptcy Trustee Toronto Licensed by the Canadian Government.
The Bankruptcy Insolvency act was created to help anyone who find themselves in a financial hole they cannot see a way out of. The Act buys us time to tackle issues, get our feet from under us and go on repairing what left is of our lives. It protects debtors from being intimidated by creditors who can make life virtually difficult. This is an act that give you room to have a fresh start and rehabilitate your financial situation as best as you can.
Bankruptcy is not the only option you have according to the law. There are two other options you can consider:
1. Consumer Proposals to Creditors
This involves the debtor, an officer at the Office of the Superintendent of Bankruptcy (OSB) who will act as a trustee and the creditor. What a Consumer Proposal is a contract between the debtor and creditor on one hand and the trustee on the other. The contract could entail extending repayment period or freezing interest for a particular duration. It works well in cases where the creditor is a bank or financial institution where the debt is related to loans of no less than $250,000.
2. A Commercial Proposal
A commercial proposal is meant to help businesses and business owners in need. This kind of proposal does not have a limit on the amount owed.
How Bankruptcies work
If you do decide to file for bankruptcy, the office of the Superintendent of Bankruptcy will appoint a trustee who will investigate the debtor’s financial affairs in order to work out and execute a plan to get creditors paid and to give debtors a chance to start afresh without having the weight of debt crushing them. The trustee can help the debtor work out debt payment plans to creditors and actually manage the process as all payments will be left to the trustee to co-ordinate. The trustee does more than that, he can offer advice to the debtor on how to manage whatever money they have.
The thing that scares a lot of people is that: when you file for Bankruptcy you cede ownership of any property you might have. This property might be sold off for the trustee to initiate payments to creditors. Once a Bankruptcy order has been issued creditors cannot initiate any collections directly from the debtor but they have to go through the appointed trustee. This does not come free or easy, to get financial freedom through bankruptcy will be require the debtor to pay a fee. In addition to the fees, your trustee will expect to get monthly contributions from you the debtor to honor the contracts and arrangements that were made to keep creditors away from your door.read more