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Category: Bankruptcy Trustee

  • Why You should Never Go to a Bankruptcy Trustee in Ontario Without Representation

    Bankruptcy TrusteeA bankruptcy trustee is a court appointed officer. Their job is to administer bankruptcies and consumer proposals in Canada – and they do this by representing both you and your creditors. This means that they are expected to get as much as possible from you for your creditors.

    Take a look at the typical process and you will see how people get themselves in trouble:

    A trustee advertises a financial solution, and you contact them for help (thinking that because you have contacted them that they represent you). However, even though you are the one looking for assistance, they in fact represent both you and your creditors.

    Next, the trustee will pitch you on the financial solutions they can provide, which are usually bankruptcy or a consumer proposal. Since a trustee doesn’t make any money if you don’t sign up, things are often very pleasant at the beginning.

    At no point during this meeting will they tell you how they get paid, but it is important information. A trustee gets paid based on a tariff (a fee set by the government in the case of bankruptcy, a percentage in the case of a consumer proposal, a percentage of surplus income in the case of a bankruptcy) – this comes out of your monthly payment.

    How much you have to pay and the amount of your monthly payments in a proposal and bankruptcy depend on your income and assets – the more income and assets you have, the more you end up paying. In the case of a consumer proposal the amount of proposal you negotiate will be locked in once the proposal is accepted.

    In the case of bankruptcy you have to report your income to the trustee each month and they do a calculation called surplus income. If you have income above a certain threshold you will have to pay your trustee 50% of the amount that has exceeded the threshold. In bankruptcy, when there is surplus income (income over the amount defined by the Bankruptcy and Insolvency Act) your bankruptcy will go from being 9 months to 20 months which can make a huge difference.

    So, why is being represented when going to a trustee a much smarter idea? Because it gives you the chance to, firstly, openly discuss your information without reprisal or pressure to sign. This representation can mean negotiating a much lower proposal, or a much stronger financial picture with contingencies in place to help you bounce back quickly. Finally, when you have your own representation, you won’t have to deal directly with the bankruptcy trustee – that individual will handle most negotiations and correspondence for you!

    Before you call a bankruptcy trustee directly, call DebtCare Canada – we can help keep you protected. Contact us today by calling 1-888-890-0888.

  • Bankruptcy Trustee – Recognizing their Role

    Bankruptcy TrusteeIf you are drowning in debt and having trouble making even the minimum payment on any of your cards – or worse, not making them – it might be time to admit that you have a debt problem. Ignoring this problem will only end up making things worse, and so avoidance should never be an option. For many in this position the best solution is bankruptcy – but how does one know who to turn to when this is the case – who can you trust? It is very important when making this type of financial decision to understand the role of a bankruptcy trustee and the part they play in your financial future.

    What is a bankruptcy trustee? Bankruptcy is a legal process and must be handled by a licensed professional, a bankruptcy trustee. This is the individual who will administer your bankruptcy or consumer proposal and manage your assets held in trust. This individual can also provide advice and assistance to make sure both your rights and your creditor’s rights are protected. They are an objective party – their role is to remain impartial throughout the process, acting in both parties’ best interests.

    A bankruptcy trustee has several jobs. The first main job is to repay your creditors – this is done by selling your assets. This includes negotiations with your creditors as far as settlements. A bankruptcy trustee may also provide debt counselling or put you in contact with an insolvency lawyer if deemed necessary.  During your bankruptcy, a bankruptcy trustee is the person who monitors your activities and ultimately decides when you can be discharged. For example, if your financial situation changes and your income now leaves room for surplus income, a bankruptcy trustee may determine that a longer term may be necessary before discharge.

    Can you trust a bankruptcy trustee? The short answer is yes – they are licensed and regulated by the Superintendent of Bankruptcy, their actions monitored and any questionable behaviour is addressed. Their goal should ultimately be to help get you out of the financial pickle you are in – and most adhere to this. All of this being said, it is sometimes best to visit a professional debt solutions company first – that way you can be sure that all avenues have been examined before entering into bankruptcy, and if the end conclusion is to file, they can put you in touch with one that is trusted and respected.

    For more information about bankruptcy and the role of a bankruptcy trustee, please contact DebtCare Canada today at 1-888-890-0888 or visit www.debtcare.ca.