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Dealing with Debt: A Consumer's Guide - Office of the Superintendent of Bankruptcy Canada - 0 views

  • You have a debt problem, or are going to have one, if: you continually go over your spending limit or you use your credit cards as a necessity rather than a convenience; you are always borrowing money to make it from one payday to the next; your wages have been garnisheed to pay for outstanding debts; you pay only interest or service charges monthly and do not reduce your total debt over many months; creditors pressure you for payment, threaten to sue or repossess your car, furniture or television, or hire a collection agency to recover the money for them; or utility companies cut off service because your bills have gone unpaid.
  • Possible Solutions
  • Contact your creditors Explain why you can't make your payments and suggest making lower payments over a longer period of time. You may be surprised by how many creditors are willing to accept such arrangements.
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  • It is important to stop buying on credit. Continuing to use credit could make your debt load too great for you to handle.
  • Under the Bankruptcy and Insolvency Act you may make a consumer proposal to your creditors to reduce the amount of your debts, extend the time you have to pay off the debt, or provide some combination of both.
  • If none of the above methods solves your debt problem, you may choose to declare bankruptcy. Bankruptcy should be a last resort if you cannot meet your financial obligations through affordable payments over a specific period of time. Bankruptcy is a legal process performed under the Bankruptcy and Insolvency Act. Because of your inability to pay your debts, you assign all of your assets, except those exempt by law, to a licensed trustee in bankruptcy. This process relieves you of most debts, and legal proceedings against you by creditors should stop.
  • How does one declare bankruptcy? First, you meet with a trustee in bankruptcy who will assess your financial situation and explain the options available to you as described earlier. If you decide to declare bankruptcy, the trustee will help you complete several forms that you will have to sign. You are considered a bankrupt only when the trustee files these forms with the Official Receiver.
  • What is the effect of a bankruptcy discharge? The bankrupt is released of most debts. Some debts are not released, however, such as an award for damages in respect of an assault; a claim for alimony, spousal or child support; any court fine; a debt arising out of fraud or misleading representation; or debts or obligations for student loans if the bankruptcy occurs while the debtor was still a student or within seven years after the bankrupt ceased to be a student
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    Canadian government article advising consumers about debt, such as recognizing danger signs, various methods to deal with it, and information on declaring bankruptcy in case consumers are unable to pay off their debts.
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