What are the disadvantages of hiring a debt settlement firm?

BankruptcyWhat are the disadvantages of hiring a debt settlement firm?

Anyone searching for debt relief options on the internet will likely see ads for firms offering debt settlement services to Ontario residents. These firms might be traditional debt settlement firms—which are supposed to hold the necessary license issued by the Ontario

Government—or they might be a firm exempt from this requirement. This latter group includes law firms, credit counselling agencies, and bankruptcy trustees. Debt settlement involves an informal agreement between a creditor and a consumer under which the creditor agrees to accept a one-time lump sum payment for less than one hundred percent of the outstanding balance as settlement in full. This is an alternative to a consumer proposal which is only available through a bankruptcy trustee.

No creditor will agree to an informal proposal unless your account is a minimum of six months overdue. In contrast, there is no such requirement for making a consumer proposal. Compared with a consumer proposal, debt settlement—or an informal proposal—has a number of disadvantages.

  1. You will receive collection calls
  2. You might be sued
  3. Results are not guaranteed
  4. It may be expensive

If you are an Ontario resident and you hire a traditional debt settlement firm then the fee they can charge you for settling a particular account is capped at ten percent of the amount of the debt on the date you signed a debt settlement agreement. If, however, you hire a law firm, you might pay substantially more in fees.

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.

Information about Collection Agencies: Know your Rights!

Information about Collection Agencies: Know your Rights!debt collection

A collection agency is a company that works to get back money owed by people in debt. Creditors pay agencies to get their money.

  1. Collection agencies try to get the money you owe their client, do not panic.
  1. If you are unable to pay, it is best to contact them so they can report on your file that you have contacted them.
  1. If you reach an agreement with a collection agency, get it in writing.
  1. Never send cash and always get a receipt
  1. Know that a person from a collection agency must not make frequent and/or aggressive calls to you or your family members.

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.  

Mindset is Everything

Mindset is Everything

Mindset is Everything

Many people in financial difficulty shy away from getting the most professional advice available, out of concern for social, financial, family, housing, or other consequences.  Calling a Trustee in Bankruptcy can be difficult simply because they have “bankruptcy” in their names!

A federally-licensed Trustee is the most qualified person to assist you with your debt situation. Most offer a free consultation. This helps you to decide if you are comfortable with the Trustee’s approach, and to find out your best options, whether bankruptcy, a consumer proposal, or something else entirely.  And more information leads to better decisions.

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 happens to my tax refund in a bankruptcy or proposal?

What happens to my tax refund in a bankruptcy or proposal?What happens to my tax refund in a bankruptcy or proposal?

If Canada Revenue Agency (CRA) is one of the creditors in a bankruptcy, any refund you are entitled to, for the year of bankruptcy and any prior year, may be retained by CRA to offset the amount owing.  After discharge, any debt still outstanding to CRA which formed part of the bankruptcy, cannot be recovered by CRA.  Post-bankruptcy Income tax refunds are property of the estate and any subsequent income tax refund may be retained by you.

If CRA is one of your creditors in a proposal, any refund you are entitled to, for the year of the proposal and any prior year, may be retained by CRA to offset the amount owing. You are entitled to all future income tax refunds.

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.