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

A 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.

Ontario Bankruptcy Trustees – What is Their Role in a Consumer Proposal?

When you feel as though you are drowning in debt, with few options available for relief, you may be considering a consumer proposal as a way to get those collection agencies off your back and to obtain some semblance of financial stability. Knowing this, perhaps you are thinking about seeking the advice or assistance of an Ontario bankruptcy trustee.

Wait – before you enlist the services of a bankruptcy trustee, you should first know what role they play in a consumer proposal and how this can impact you.

A bankruptcy trustee in Ontario is an individual licensed by the Superintendent of Bankruptcy. Their job is to administer consumer proposals and bankruptcies and to manage assets held in trust. They will negotiate the settlement between you and your creditors. In a proposal, that trustee will assist you in developing a proposal to present to your creditors (usually a percentage of what you owe them), and once accepted, monthly payments are made through the trustee, and the trustee transfers that money to your creditors.

Sure, this all sounds well and good – after all, you can’t make a consumer proposal without a trustee – it is a legal agreement under the Bankruptcy and Insolvency Act and must be administered following a formal and regulated process. That being said, there are a few important things to keep in mind before you make the call to a trustee.

Firstly, a bankruptcy trustee does not simply act on your behalf. Even though you are the one to call, this individual represents both parties (you and your creditors), not just you. This means that they are obligated to seek the most money possible for your creditors to ensure that they get as much of what they are owed as possible, while still being fair to you. What this means is that you may not necessarily be getting the best deal.

Secondly, most bankruptcy trustees never outline how they are paid – but this is important. Although their fees are regulated, they are paid according to how much you pay to your creditors, and thus it is in their best interest to get as much money for your creditors as possible.

So, what then are your options? Accept this and go forward? Skip the proposal all together to avoid it? No, there are ways to protect yourself and secure a consumer proposal that meets your needs. The best way to do this is to work with a financial organization experienced with debt relief solutions, one that can offer you representation and protect you throughout the entire proposal process. These professionals can walk you through the process, ensuring that you are aware of and understand your choices, as well as administer your paperwork.

Know before you go: before you call that trustee, think about getting personal representation – someone who will look out for your best interests rather than their own or that of your creditors. DebtCare Canada can help – call us today at 1-888-890-0888.

Bankruptcy Trustee – Recognizing their Role

If 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. 

Can You Really Trust An Ontario Bankruptcy Trustee

Before you can determine if you can trust an Ontario bankruptcy trustee, you first have to understand what an Ontario bankruptcy trustee is and what his or her role in a bankruptcy or consumer proposal is.

An Ontario bankruptcy trustee is an individual or a corporation that is licensed by the Superintendent of Bankruptcy. Bankruptcy trustees are regulated federally. The role of an Ontario bankruptcy trustee is to administer bankruptcies and proposals, administer the estates of the bankrupts, hold in trust and subsequently distribute the assets of the bankrupt. The bankruptcy trustee must follow the Bankruptcy and Insolvency Act (BIA).

The bankruptcy trustee is to be impartial and act in the best interests of both the bankrupt and the creditors. The same is true whether you are filing a consumer proposal or a bankruptcy. In the case of a bankruptcy, the bankruptcy trustee can oppose your discharge if you have not fulfilled your obligations under the bankruptcy. These obligations can change over the course of your bankruptcy and/or as a result of undisclosed information at the time you filed for bankruptcy. In layman's terms, if you incorrectly estimate the value of an asset, forget to tell the trustee that you have a particular asset or in the middle of your bankruptcy you get a better job, this may change your monthly payment in bankruptcy and the length of time you are bankrupt – the bankruptcy trustee will make this determination.

In the case of a consumer proposal you don’t have an ongoing obligation to the bankruptcy trustee like you do in a bankruptcy. With that said, the bankruptcy trustee assesses the proposal they will offer your creditors based on extracting maximum value for your creditors.

So the answer to the question “can you trust an Ontario bankruptcy trustee” is yes. They are a licensed, regulated officer of the court. However, now that you know the role a trustee plays in a bankruptcy or consumer proposal, it may not be wise to approach him or her directly, no matter how warm and fuzzy the advertising is.

Consumer proposals and bankruptcies are good options for getting out of debt and starting off on a fresh footing, but before jumping to this conclusion it is important to consider all of your financial options. Working with a qualified financial consultant that is experienced working with debt consolidation, mortgages, debt settlements, consumer proposals and bankruptcies will make you aware of these options. A financial consultant who is hired by you to represent your financial interests will ensure that you can be open and honest about all of your finances, ask questions that won't impact you and assess a host of different financial choices. He or she can also line you up with the appropriate professionals (this includes bankruptcy trustees if necessary) and represent you through the process. This takes the burden off of you and ensures that you walk away with the best possible deal. In the case of a consumer proposal you could save thousands of dollars.

If you are struggling with a financial problem and would like to review your financial options contact DebtCare Canada at 888-890-0888 or visit www.debtcare.ca.

 

What is a Bankruptcy Trustee in Ontario and What is Their Role in a Debt Restructuring?

A Bankruptcy Trustee in Ontario plays an important role when it comes to debt restructuring. Bankruptcy Trustees across Canada are appointed by the Superintendent of Bankruptcy to oversee bankruptcy and consumer proposal filings in Ontario.

It is important to understand what a bankruptcy trustee in Ontario is and what his role is with regard to debt restructuring before going to see one directly. The most significant fact that you need to be aware of is that the trustee administers the estate of the debtor as its legal representative, but his financial incentive when a bankruptcy or consumer proposal is filed is to maximize the return to the creditors.

What does this mean to you? Well, when you go to see the Bankruptcy Trustee to make a full financial disclosure, it is no different than going to your creditor to make a financial disclosure. Keep in mind; the role of the Bankruptcy Trustee is to obtain the greatest possible amount of money from you, all to the benefit of your creditors.

Bankruptcy and consumer proposals have, to some extent, become an industry of their own in Ontario. The Bankruptcy Trustee is a court-appointed officer and is supposed to take a neutral role in your bankruptcy or consumer proposal filing; however, they are frequently advertising in the mainstream media as a safe place for you to go for counsel when struggling with debt. This could not be further from the truth.

The truth is, visiting a Bankruptcy Trustee is no different than speaking to the CRA directly about your tax problem without representation from an accountant or a tax lawyer.

In addition to all this, where a consumer proposal is concerned the Bankruptcy Trustee gets paid based on a percentage of the consumer proposal that you file. This makes a consumer proposal more attractive to him from a revenue standpoint, more so than a bankruptcy. We have seen many cases where consumers or business owners have filed consumer proposals as recommended by their respective Bankruptcy Trustees. They subsequently default because they could not afford the payments in the first place, at which point they end up having to file for bankruptcy. In Ontario, ethics have become a real issue in the bankruptcy and consumer proposal business for this very reason.

When you go to a Bankruptcy Trustee, he or she will ask for complete financial disclosure with regard to your income, assets and liabilities. They will try to find as much income and liquidity as possible to drive up the amount of your bankruptcy or consumer proposal, all to the benefit of your creditors. We surmise that in some cases, also to the benefit of their own fees.

Another challenge is that in many cases a consumer will unwittingly omit information when they file for bankruptcy. The Bankruptcy Trustee will often accept whatever information you provide based on your word. Once the bankruptcy or consumer proposal has been filed, the trustee will then engage in a rigorous and determined process to validate your disclosures. If the trustee finds additional income or assets, he or she will adjust the amount of money that you have to pay. In the case of a bankruptcy, what begins as a predetermined length of repayment may snowball into a seemingly endless repayment. You will not be able to get discharged until you have paid the Bankruptcy Trustee all of the money that the trustee believes you owe.

Just as there are accountants and tax lawyers who represent people when they have a tax problem, there are financial consultants who can represent you if you have a debt problem. They can prepare your information, educate you about your choices, administer your paperwork and hold your hand through the process of a bankruptcy or consumer proposal, ensuring that you get a fair deal that protects you.

For more information about Bankruptcy Trustees in Ontario, their role in a debt restructuring or to get representation in a bankruptcy or consumer proposal please contact Michael Goldenberg at DebtCare Canada by calling 416-907-2582 or visit www.debtcare.ca