Archive for the ‘bankruptcy’ Category
The lighter side of Bankruptcy
I’m starting this blog with a little joke that found it’s way to me in my inbox. And it goes like this…
A businessman was in a great deal of trouble. His business was failing, he had put everything he had into the business, he owed everybody – it was so bad he was even contemplating suicide. As a last resort, he went to a pastor and poured our his story of tears and woe.
When he had finished, the pastor said, “Here’s what I want you to do: put a beach chair and your Bible in your car and drive down to the beach. Take the beach chair and the Bible to the water’s edge, sit down in the beach chair and put the Bible in your lap. Open the Bible; the wind will rifle the pages, but finally the open Bible will come to rest on a page. Look down at the page and read the first thing you see. That will be your answer; that will tell you what to do.”
A year later, the businessman went back to the pastor and brought his wife and children with him. The man was in a new custom-tailored suit, his wife a mink coat, the children shining. The businessman pulled an envelope stuffed with money out of his pocket and gave it to the pastor as a donation in thanks for his advice.
The pastor recognized the benefactor and was curious. “You did as I suggested?” he asked. – “Absolutely,” replied the businessman.
“You went to the beach?” – “Absolutely.”
“You sat in a beach chair with the Bible in your lap?” – “Absolutely.”
“You let the pages rifle until they stopped?” – “Absolutely.”
“And what were the first words you saw?” – The business man replied…. “Chapter 11″. 
For those who are not familiar with the US Bankruptcy Code, Chapter 11 is the USA’s version of Canada’s Assignment in Bankruptcy.
Am I advocating Bankruptcy? Absolutely not! Bankruptcy should always be the last resort. But it can be the only option to remain sane and move on with your life, when all other options are outside of your grasp. In my 16 years in the industry I have seem people with unexpected illnesses that has thrown their financial plan out the window, single people living in their cars because of an addiction, families torn apart by divorce or other personal issues that has left a pile of debt and little hope for regaining control. In each of these cases, the individual or the family were able to start again, learn from their mistakes, and rebuild their lives. A chance they may not have had otherwise. There will always be those who abuse the system and give a bad rap to those who truly need the relief.
As always, it is imperitive that you get expert, impartial advise to help you make the best decision possible. It may seem odd, but Bankruptcy Trustee’s are one of the few professionals who not only can provide advice on all options, can refer you to a reputable firm for services outside of those they can provide, provide the advice you need for free and are heavily mandated by law and a professional association that is in place to ensure the integrity of and public trust and confidence in the system.
I received a call today from a Debt Consolidation Company planning to expand into Nova Scotia. They were looking for a Trustee to refer business to. We chatted about what they needed and what they offered to their clients.
He informed me that their objective is to help individuals find the best solution. I thought, “Us too!”. He explained that they have individuals complete an assessment package to assist them in determining the best option. And I thought, “We do that too!”. He further offered that they charge the client a fee for this advice. And I thought “We DON’T do that!”. Our consultations are free. Yet, these credit counselling companies are popping up AND, apparently, expanding.
He indicated that many people call them because they are afraid of the “B” word (that would be “Bankruptcy”); and I totally get that. Bankruptcy should always be your last option and we strive to help individuals find solutions other than the “B” word. In fact, and we pride ourselves on this fact, approximately 40 percent of the people who walk through our doors, walk back out again. Not because we couldn’t help them, but because we helped them to find an alternate solution. And it didn’t cost them anything. Other than, perhaps, the embarrassment of talking to a Trustee in Bankruptcy.
Which leads me back to “the cost of embarrassment”…it seems to me that if you are struggling financially, perhaps you would be better off not paying a fee for a service that you can get for free.
There is a movement in the bankruptcy industry to change the title from Trustee in Bankruptcy to something that better reflects our wide range of advice/services. I would say that’s a movement in the right direction.
So often, people come to me, embarrassed and ashamed that they are facing bankruptcy, or a similar compromise of debt. They feel that they have failed. They are hard on themselves in a way that is not productive.
I created this pep talk in an effort to help them through this cross road in their life. Feel free to share this with anyone who you feel would benefit from it.
…
“You’re not here because you messed up. You’re here because you optimistically thought that you would continue on the progressive path you were on. But life happened and things change and you have to learn the rules of a new game. And its tough at first. But you will get through it. And you will learn from your experience. And be stronger because of it.
Life is a series of lessons. This is just one of them.
So hold your head up high. Walk out into the world. Be strong in the knowledge that you made a difficult decision that will benefit you and your family for years to come. Let the guilt go. Be thankful that you have learned this lesson at this stage in your life and not later.
I wish you health, happiness, peace and prosperity. “
What comes to mind when you hear the word “Consolidation”? Do you envision all of your debts being ‘paid off’ leaving you with the manageable obligation of one monthly payment? If so, you are thinking about a “Consolidation Loan”. A financial institution loans you money by paying off your debt and you pay them back. With interest, of course.
Nowadays, the word “consolidation” is being used in a much more liberal term. Many debt-relief agencies offer to “consolidate your debt”. The process is quite different. Your creditors are approached and offered a settlement. That settlement could be in full or in part (a percentage of what you owe) and could result in an elimination or reduction of interest.
In the Insolvency Restructuring Profession we call this “consolidation” or “settlement” a Consumer Proposal
So, what is the difference between a “consolidation loan” and a “debt consolidation”?
The most important distinction is the effect on your credit rating or score. A consolidation loan will not affect your score in a negative way and may, in fact, improve it. A debt consolidation, on the other hand, WILL impact your score negatively, the extent depends upon your credit score at the time of the ‘consolidation’.
A friend recently asked me if I could recommend a reputable debt consolidation company that will not impact your credit score. My answer was “Nope, they don’t exist!”. If you find one, let me know!!
Recently, I received a question on this site, asking about our credentials – a very important questions. Given the broad range of “advisers” out there in both the real world and the world-wide web, you never really know who is imparting their knowledge on you, do you?
So, I thought I would take a moment and tell you about us…
As I write most of the posts, I will start with my credentials. I have been working in the Financial Counselling / Bankruptcy industry for 12 years. My training has been a combination of professional training and experience. I obtained my financial counselling certificate from The Association for Financial Counseling and Planning Education (AFCPE) while working in this industry. Nowadays (is that word actually in the dictionary?), the Financial Counselling Program is coordiante by the Office of the Superintendent of Bankruptcy and the Canadian Association of Insulvency Restructuring Professionals. More importantly, I feel that I have personally made most of the financial mitakes I write about.
Enough about me…we are supported by our Trustee, Darryl Haley, who has more than 30 year experience dealing with individuals and businesses in everything from money management to business turn arounds. He hold a CA designation and Trustee in Bankruptcy license.
In addition, we have several staff members with a wealth of training and experiences who talk to people every day about their financial situation and we draw upon other business colleagues and experts in their fields, to bring you relevant advice and experience.
So thank you for asking!
(Do you have a question for Dr. Debt? Click on “Ask Dr. Debt” and watch for a post addressing your question.)
I know…it seems wrong doesn’t it? You are in a state of having to consider filing for bankruptcy and you find out that you have to pay. Often I get asked, “How can someone pay you if they are bankrupt?” The answer is simple in most cases…the definition of ’being insolvent’ is that ‘you are unable to meet your obligations as they become due’. An insolvent person can often pay something on their debt, just not what their creditors are asking or demanding.
More often than not, the amount you are required to pay into your bankruptcy is a manageable payment, considering what you are required to pay to maintain your current debt (let alone pay it off).
The amount an individual pays varies depending on the level of income and the expenses they have. The best way to determine what you have to pay is to meet with a Trustee in Bankruptcy. This simple Bankruptcy Payment Calculator will help you estimate what that payment might be.
For a more comprehensive look at your personal situation, complete our online assessement