When you are struggling to make even the minimum monthly
payments to bills, or worse, having to choose which bills to pay each month, it
is probably time to consider professional financial help to get things back on
track. But how can you best determine which route is the right one, and who you
should elect to stand in your corner? We can help. Today’s topic: the financial
faceoff - Canadian bankruptcy trustees vs. Canadian debt counsellors. Both can
help you get out of debt - but not necessarily in the same way.
Trustees
A Canadian bankruptcy trustee is a court appointed
officer, appointed by the Superintendent of Bankruptcy. Their role is to
administer bankruptcies and consumer proposals - but to do so on behalf of the
interests of all parties. They don’t represent you as the client, they
represent both you and your creditors. This means that, since they are not your
representative, they can use the confidential financial information you provide
to them to get the best deal for your creditors. They are paid out of the
estate in the case of bankruptcy, and out of your pocket in the case of a
consumer proposal, so their paycheque is then determined by how much is paid by
you to your creditors.
Debt Counsellors
Often bankruptcy trustees like to say that you don’t need
to pay a debt counsellor, and can just go right to them. This is because if you
do this they can control the filing – which is especially enticing in the case
of consumer proposals, where, as mentioned above, the more you pay, the more
they earn.
Instead, debt counsellors are paid by YOU, they represent
YOU and only YOU. They know insolvency inside and out and you can trust that
any information you provide to them is not going to be used against you - you
can tell them everything without fear of unanticipated consequences. The role
of a debt counsellor is to structure your financial information, assist you in
finding a good trustee, and to help you manage negotiations with a trustee.
Both bankruptcy and consumer proposals represent
important and viable solutions when debt becomes unmanageable. That being said,
going right to a trustee and hoping for the most favourable outcome will often
leave you disappointed. Consider
speaking with a debt counsellor first and having them negotiate a consumer
proposal or bankruptcy on your behalf - NEVER go to a bankruptcy trustee
unrepresented.
For more about the difference between a Canadian bankruptcy
trustee and a Canadian debt counsellor, please contact DebtCare Canada today at
1-888-890-0888.
