Category: Credit Counselling

Categories of Debt

Posted on by Jordan Rumanek

bankruptcyCategories of Debt

All debts are either secured or unsecured. In the case of a secured debt, if the debt is not paid, the creditor has some type of collateral it can look to for payment. The best examples are mortgages and liens arising from the purchase or lease of a car. Any debt that is not a secured debt is unsecured debt.

When a debtor has an unsecured debt the creditor has no collateral it can look to if the debt is not paid. Most credit cards are unsecured debt. There are three different categories of unsecured debt: debt owed to the government, debt arising from a consumer transaction, and non-dischargeable debt. Eliminating debt owed to the government can be challenging. Settling government debt is not available nor is credit counselling. Government debt, however, can often be eliminated when the consumer makes a consumer proposal or files for personal bankruptcy.

Eliminating unsecured consumer debt is less daunting. A consumer might be able to take advantage of a limitation period, make a one-time lump sum payment, do credit counselling, make a consumer proposal, or file for personal bankruptcy. Non-dischargeable debts are those debts which cannot be eliminated by making a consumer proposal or filing for personal bankruptcy. These include the following:

  • Spousal support and child support obligations
  • Government fines
  • Student loans where a person ceased to be a student less than seven years ago
  • Civil judgments involving fraud

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.

Why not all debt is created equal

Posted on by Jordan Rumanek

Why not all debt is created equal

bankruptcyNot all debt is created equal and we see this when a Canadian contacts a licensed insolvency trustee to explore eliminating his debt by way of filing for personal bankruptcy or making a consumer proposal to his creditors. In fact, depending on the type of debt that a consumer has it is possible that only some of his debts might be eliminated when he files for personal bankruptcy or makes a consumer proposal to his creditors

There are two distinct categories of debt which are not discharged or forgiven when a Canadian files for personal bankruptcy or makes a consumer proposal:

  1. Secured debt
  2. Non-dischargeable debt

A secured debt is a debt where the creditor has some security or collateral it can look to if a debt is not repaid. The most common examples are mortgages and liens arising from the purchase or lease of an automobile. None of a consumer’s secured debts are eliminated when he files for personal bankruptcy or makes a consumer proposal to his creditors.

Furthermore, there is a miscellaneous category of debt—non-dischargeable debts—which are not discharged or forgiven when a Canadian files for personal bankruptcy or makes a consumer proposal. This includes child support and spousal support obligations, as well as unpaid government fines, and civil judgments involving fraud. Finally, student loans are not discharged if the consumer files for personal bankruptcy or makes a consumer proposal less than seven years after ceasing to be a full-time student.

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.

What can I do if I cannot make my student loan payments?

Posted on by Jordan Rumanek

bankruptcy-150x150What can I do if I cannot make my student loan payments?

Thousands of Canadians cannot afford to pay their student loans. The law in Canada punishes anyone making a consumer proposal or filing for personal bankruptcy if they recently stopped being a full-time student. Student loans are not forgiven unless a person can satisfy the 7-year waiting period or the discretionary 5-year waiting period based on financial hardship.

If you cannot make your monthly student loan payments then you do have a number of options:

Firstly, your lender might offer a number of debt relief options. Secondly, it might be to your advantage to make small token monthly payments. Thirdly, if you have not made a payment on your student loan for a minimum of six months you can explore negotiating a one-time lump sum payment as settlement in full—sourcing funds from family members or the sale of an asset.

Finally, you might want to consider credit counselling as a “bridging strategy”. Credit counselling might help you reduce your monthly payments on your unsecured consumer debt—but not your student loan -which might significantly improve your cash flow situation. Some Canadians seeking personal bankruptcy or a consumer proposal will use credit counselling until they satisfy the all-important 7-year waiting period.

If you want to make a consumer proposal or file for personal bankruptcy and you have ceased attending school a minimum of 5 years—but not 7 years–then you can bring a motion before a judge who has a discretion to grant you a discharge on the grounds of financial hardship.

 

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 Can I Avoid Collection Calls?

Posted on by Jordan Rumanek

Bankruptcy PeopleHow can I avoid Collection Calls

Many Canadians are very uncomfortable receiving a collection call from a bill collector. In some instances it can be a major headache for an Ontario resident to get a collection call at the workplace. There are three basic strategies for avoiding collection calls:

  1. Reduce the likelihood that a bill collector can find your phone number

You might want to get a new phone number if you are getting phone calls or you anticipate receiving collection calls. If you have a landline you should consider getting an unlisted number—and advising friends and family not to give out this unlisted number to anyone. Furthermore, you should avoid having your name mentioned on your voicemail greeting.

  1. Effectively screening potential phone calls from bill collectors

There are a substantial number of tactics you might employ to screen your calls:

  • Letting all incoming calls go to voicemail
  • Using the call display feature on your phone to screen your calls
  • Have someone else answer your phone
  • Decline to give out your name to callers unless they first identify the name of their employer
  1. Dealing with a bill collector who does get you on the phone

If a bill collector does get you on the phone then you have every right to hang up on the bill collector—or simply put the phone down on the table, or let them talk to your dog—at any time! You are under no legal obligation whatsoever to speak to a bill collector.

 

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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