Category: Bankruptcy Questions

Good Debt & Bad Debt

Posted on by Jordan Rumanek

Good Debt & Bad Debtdebt

Good Debt: any money borrowed to buy an appreciating asset where the cost of servicing the loan does not affect your ability to save to the appropriate level & where the principal will be fully repaid before your retirement

Bad Debt: Everything Else

In sum, divide bad debt by your annual income and if that percentage is over 25%, it is time to make larger payments to reduce this number and make sure you also keep good debt at a minimum.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form, to learn more please visit our YouTube. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.

RRSPs: What you should know!

Posted on by Jordan Rumanek

RRSPs: What you should know!RRSP

A Registered Retirement Savings Plan (RRSP) provides annual tax benefits for saving for retirement. It is often suggested that couples set up an RRSP together: a spousal/common law RRSP, however, this type of investment assumes that partners will be together forever. The higher income earner (in this situation) benefits in the short term due to tax breaks. The lower income earner is supposed to benefit when they reach retirement. When setting up a plan such as this, make sure the plan actually benefits both parties in both the long and short term. If in fact this is uncertain (and most financial circumstances are difficult to determine), it may be best to set up a Tax Free Savings Account (TFSA) as a couple, this way both parties benefit equally.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.  

 

Is it possible to include a loan secured against a mortgage in a consumer proposal?

Posted on by Jordan Rumanek

MortgageIs it possible to include a loan secured against a mortgage in a consumer proposal?

The first step is to confirm whether the secured creditor did its homework and actually registered their interests against your house or car (usually they have). Verify the registration by asking your lawyer to check the parcel registry on your house, or do a PPSA search in respect of your car or other assets. If the loan is registered properly, it will be included in the Consumer Proposal documents, but will not be among the debts reduced or stayed (put on hold) by the proposal.  If you do have secured loans, talk to your Trustee about your options.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.  

How are student loans affected by a proposal or a bankruptcy?

Posted on by Jordan Rumanek

How are student loans affected by a proposal or a bankruptcy?Student Loan

It depends on the age of the student loan.

If the bankruptcy or proposal is filed more than 7 years since the end of your last semester using student loan funds, then the loan is dischargeable. When the process is done, the debt is gone.

If the bankruptcy or proposal is filed more than 7 years since the end of your last semester using student loan funds, the loan is still included in the consumer proposal or bankruptcy.  No collection action can be taken against you during the process, but once the bankruptcy is discharged or the consumer proposal is complete, the loan is collectible again. Discuss this with your Trustee, as interest will still accrue, and you should have a plan to address it.

There is a provision in the Bankruptcy Act that if a person demonstrates true financial hardship, and the bankruptcy was file less than 7 years, but more than 5 years, after the last semester, the court may order that the debt does not survive.

Contact Rumanek & Company Ltd. for more information on bankruptcy and debt solutions. Or please fill out the free bankruptcy evaluation form. To learn more please visit our YouTube Channel. Rumanek & Company have been helping individuals and families overcome debt for more than 25 years.  

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