I filed a Consumer Proposal and my trustee tells me that he has to file an Administrator’s Report. What is this?
Your trustee is acting in this situation as the Administrator of your proposal. As such, there is a requirement under the legislation that he submits a report to your creditors:
The proposal was filed with the Officer Receiver who represents the Office of the Superintendent of Bankruptcy
Your financial situation and assets listed on your documents are reasonable
Your list of creditors (with balances higher than $250) is reasonably accurate
Explains what is the cause of your financial problems
A brief summary of your net income per month, type of employment, the fact that you do not wish to file a bankruptcy and the amount that the creditors will receive in the proposal. If you and your partner are filing individual proposals at the same time, the joint creditors will be notified of the concurrent proposal so that they realize that they receive payments from both proposals. If the administrator has determined that the payment in the proposal is lower than the creditors would receive in a bankruptcy, there is an obligation to disclose that fact but add any mitigating factors for the creditors to consider before deciding whether or not to vote for or against your offer.
In many cases, the creditors start reviewing your proposal by reading the Report of the Administrator. It is a very important document.
I have been researching my options lately because I am considering filing for bankruptcy and have a few questions for you regarding my student loan. I graduated from my undergrad in 2007 and then from my Master’s in October, 2011. I have been applying for the Repayment Assistance Program every 6 months through OSAP which has been very helpful considering I have not been able to make payments for a variety of personal reasons. I am aware that if I file for bankruptcy that I am not able to include my student loan until October, 2016 because The Bankruptcy and Insolvency Act indicates that there needs to be 7 years and sometimes 5 years in between the date that I ceased to be a full or part-time student and the date I file for bankruptcy. So, here are my questions:
If I have been benefiting from the Repayment Assistance Program does this mean that the 5 years changes the age of my loan?
Are there ways to apply to the court to consider my student loan to be discharged by my bankruptcy?
Are you able to meet with me to advise me and give me options?
Yes, if you have been receiving assistance from the repayment program, the age of your loan changes according to the Canada Student Loan Act as well as OSAP (Ontario Student Assistance Program).
There are ways to apply for a Hardship Provision to include your student loan. However, the court needs to have proof of the hardship and the court decides on a case-by-case application process.
Yes, we are able to meet with you to discuss your options and ensure your rights—please give us a call and we can answer your questions and book an appointment for you. There is no charge for the initial meeting. Charges and terms of payment for future work will be discussed at this initial meeting.
Just because you are over 65 years old does not mean you cannot file an assignment in bankruptcy. If you are unable to pay your debts as they normally come due, the debts total more than $1,000 and your liabilities are greater than your assets – you have passed the test of insolvency and are entitled to file an Assignment in Bankruptcy. The question then becomes – should you do so. If your income is only from Canada Pension or Old Age Security, you are protected as these cannot be seized or garnished by a creditor. Note that once your pension is deposited to your bank account, it becomes co-mingled with other monies and loses the identity of its origin. Your bank account could be garnisheed regardless of the source of the money. Therefore, never give a creditor information about where you bank.
The biggest reason why seniors declare bankruptcy is to stop the harassment of telephone calls and letters from collection companies and creditors. The bonus is that no creditor is allowed to start a lawsuit or continue one (if they have already started) as of the day you file the Assignment in Bankruptcy.
What Happens to My Credit Score if I file for Bankruptcy?
The filing of an assignment in bankruptcy, by itself, does not ruin your credit score. In most cases, you will already have destroyed your credit score by not paying your creditors, being very far behind in making payments, or by not even making the minimum monthly payments on your debts. The credit reporting agencies in Canada (Equifax and Trans Union of Canada) accumulate information from your creditors on a regular basis and based on a 6 year history period, calculate your credit score. When you file an assignment in bankruptcy, your credit rating is moved to R9 and stays there for a period of 6 years – the start of the 6 year period is the date of your discharge from your bankruptcy, which could be as fast as 9 months after the date that you filed the bankruptcy. You can start rebuilding your credit score as soon as you obtain your discharge from your bankruptcy. Do not confuse your credit rating with your credit score. You should receive information from your trustee at the time of your second counselling meeting (or at least before your discharge from bankruptcy) on how to obtain credit after bankruptcy and how to rebuild your credit score.
If you are not filing a bankruptcy, please refer to the article on our website – What happens to My Credit Score if I File a Proposal.