Bankruptcy and Student Loans in Canada

BankruptcyBankruptcy and Student Loans in Canada.

We have written many articles over the years about student loans. We recently found the enclosed article which details the history of student loans and bankruptcy in Canada. It is reproduced in its entirety:

pdf_logo The History of Bankruptcy and Student Loans in Canada

pdf_logo Treatment of Student Loans Under Canadian Bankruptcy Law

 

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. 

Can I Buy a Car and Then Go Bankrupt?

Bankruptcy PeopleCan I Buy a Car and Then Go Bankrupt?

The short answer is yes. There is always a “But.” The review of the trustee in bankruptcy will take into account the following:

  • How long before the bankruptcy did you buy the car?
  • What did you pay for the car?
  • Did you pay cash? – if so, was any part of the cash from cash advances on your credit cards or from lines of credit?
  • If you financed all or part of the purchase price of the car, do you still owe money to the finance company? Did the finance company put a lien on your car as security until they were paid? If the answers are yes and you wish to keep the car, you will likely just continue to make the car payments and keep the car
  • What is the car worth on the day you filed the assignment in bankruptcy?

The answers to all of the above questions determine what action, if any, the trustee will take. Obviously, the length of time between the purchase of the car and the date of filing bankruptcy and the current value of the car are the two most important factors. If this situation applies to you, you would be wise to review the details with your trustee before you file bankruptcy.

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.

Bankruptcy Terms & Definitions

BankruptcyBankruptcy Terms & Definitions:

Bankruptcy

Bankruptcy is a legal process governed by the Bankruptcy and Insolvency Act for a person who can no longer pay back debt. The person who owes the debt assigns all assets — with some exceptions which are governed by Provincial legislation — to a trustee in bankruptcy who sells the assets that are not exempt to help pay your debt to the creditors.

Consumer Proposal

A Consumer Proposal is a formal offer by a debtor to creditors. This may include an offer to pay a percentage of the debt, pay back the debt over a period of time (maximum of 60 months), or some combination of both.
This option is available to individuals whose total debt does not exceed $250 000, not including debts secured by their principal residence.

Division I (Commercial) Proposal

A Division I (Commercial) Proposal is a formal offer by a debtor to creditors. This may include an offer to pay a percentage of the debt, pay back the debt over a longer period of time, or both. Unlike a consumer proposal there is no limit with respect to how much money is owed, nor is there a limit to the number of months that you may choose to make in your offer to make monthly payments.

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.

Bankruptcy in Canada: What you should know

Canada_flag1Bankruptcy in Canada: What you should know

Advantages of filing for personal bankruptcy:

1. Protects from collection agencies harassment

2. Eliminates personal debt

3. Quick financial fresh start

4. Relatively inexpensive

5. Most Provinces provide protection for your clothes, furniture, car, etc. from your creditors

6. All legal actions, wage garnishees, etc. are stopped. No new legal proceedings are allowed to start without the express prior consent of the court.

Disadvantages of filing for personal bankruptcy:

1. Credit history resets to R9

2. Some assets/possessions must be surrendered to your trustee for division among your creditors

3. You will need to rebuild credit. If your credit is bad, you will have to do this regardless whether or not you file an assignment in bankruptcy.

4. Possible future difficulties acquiring loans. Even if you do not get the loan, you will pay higher interest rate due to a higher risk factor.

 

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.