Will CRA allow liabilities to be included in my consumer proposal?
CRA will only allow liabilities up until the end of the calendar year, before the proposal, with one exception:
If the debtor files a provisional tax return at the time of filing the proposal the amount is shown as a liability. In other words, if there are clauses about the return in the proposal document, the CRA will allow the pre-proposal liability to be included in the proposal. It is important to note that this is usually done for high-income professionals or self-employed individuals that are no longer operating a business.
The best way to handle financial difficulties is to admit to them, find out your options and take back control. If you say yes to one of these danger signs it is time to recognize that you have or will have financial difficulties and begin to take action:
1. Credit cards are a necessity and/or you pay only the interest (minimum payments)
2. You consistently find yourself borrowing money from one creditor to pay another
3. Creditors harass you
4. Your wages are garnished
5. Your utilities have been cut off
You have options:
1. Ask your creditors about making lower payments. It is usually in a creditors best interest to receive all of their money over a longer period of time than to find out you have filed for bankruptcy.
2. Think of someone in your life who manages their money well. Ask for 15 minutes of their time to help you get back on track. If this makes you uncomfortable, find out if your community has a money management counselling office. Taking action is key.
3. Do your research: Compare interest rates at several different banks for debt consolidation. This in turn will allow you to combine your debts and make one monthly payment to the bank.
4. Consumer Proposal: You may make a consumer proposal to your creditors. This involves reducing the amount of your debt and extending the time you have to pay off the debt. You should know that an administrator of consumer proposals is a trustee in bankruptcy.
5. Bankruptcy: You may choose to declare bankruptcy if affordable payments are not feasible and you do not have the ability to meet your financial obligations. At this stage, once you file, you assign all assets that are not exempt to your trustee to be divided among creditors. Exempt assets include clothing, furniture, vehicles, etc. to a prescribed limit of value.
Contact Rumanek & Company Ltd. for more information. Or please fill out the form on the contact us page for additional information. Or if you would like a free evaluation please fill out the 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.
If you file a proposal or an assignment in bankruptcy, your credit card debts are included in the process.
If your account has a co-signor, they will be liable for the full amount due, less any funds received from the Trustee.
If there is a supplementary cardholder, you will need to read the fine print of your card agreement to find out if that person is liable for any part of the charges made by the main cardholder.
If the supplementary cardholder goes bankrupt, the main account holder is liable for the full amount.
If you are not sure, discuss your concerns with your Trustee.
Contact Rumanek & Company Ltd. for more information. Or please fill out the form on the contact us page for additional information. Or if you would like a free evaluation please fill out the 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.
Irene is a retiree who had amassed over $18,000 in credit card debt. She had spent the money on household items and some medical bills and being on an old age pension, she was now unable to afford the repayments. Her husband was also on the pension and tried to help as best he could. Irene had never considered going bankrupt before and saw it as an undignified approach to dealing with debt. She was also afraid to lose her car. Unfortunately, her creditors were becoming more aggressive, and she didn’t know what to do.
We talked with Irene, explaining that bankruptcy does not mean the loss of her car, and that sometimes, in some situations, bankruptcy is the only option. Fortunately, Irene did have another choice. She was able to afford monthly payments for a consumer proposal, which satisfied her personal feelings about bankruptcy. We offered her creditors a reasonable repayment on what they were owed, they accepted the offer, and Irene is now on the path to being debt-free.
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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