Campbell, Saunders Ltd. provides help in creating a financial plan for you to deal with insolvency, debt payments, and bankruptcy. We have a team of experienced professionals that have answers to all your questions regarding consumer proposals, proposal to creditors, and how to manage finance during bankruptcy. On this page, you will find answers to some of the frequently asked questions. Contact us for more information.
Consumer Proposals – FAQ
How Do I Know If I Qualify for a Consumer Proposal?
If your debt is at least $1,000, but less than $250,000 (excluding your mortgage) and you haven’t filed another consumer proposal recently (or a Division I Proposal/Notice of Intention) you should qualify. If your debt is more than $250,000 you may consider filing a Division I proposal.
What Do I Need to Do to File?
Step 1: Contact us to discuss your options.
Step 2: Prepare your financial documents for us to review so we can prepare the paperwork.
Step 3: Meet with one of our Trustees to review your situation and decide what your best option is.
Step 4: Sign the proposal documents and ask your Trustee to file them with the Federal Government.
How Long Does It Take?
Not more than 60 months. A proposal can be a lump sum, payments over a period of time, or a combination of the two. We always make sure your proposal contains a term that you can pay it off early if your circumstances change for the better.
What Happens If I Can’t Make My Payments?
If you miss more than three monthly payments your proposal will be in default. If you can’t make a payment you should contact us immediately to make arrangements to avoid the proposal going into default. Default means that the stay of proceedings is lifted and your creditors can start collection actions against you again.
Can I Keep My Home? What about My Car?
You get to keep all your assets in a consumer proposal if you wish, but if you want to keep secured assets you will need to keep making those payments. Some people may choose to return leased assets they can’t afford at the time of filing so that those debts can be included in their proposal.
What Happens to My Spouse If I File a Consumer Proposal?
Your spouse will not be affected by you filing a consumer proposal if they are not co-signers or guarantors of your debt. If they are, it may be appropriate to file a joint proposal that can include both of your unsecured debts.
What Does a Consumer Proposal Cost?
The Trustee’s fees come from the money you pay into the proposal, no additional costs are required. Trustee fees in consumer proposals are set by the government and are the same no matter which Trustee you decide to use. We will work with you to arrange a proposal payment plan that is fair and within your budget.
What Happens If My Creditors Don’t Accept My Consumer Proposal?
You are in no worse position than you were before filing. You are not bankrupt, but have the option of filing for bankruptcy if you think that is the best option for you at that time.
What Happens to My Credit Rating?
Filing a proposal will give you a credit rating of R7, which is not as bad as a bankruptcy, which is an R9. The R7 rating is removed three years after you complete your proposal.
Can I Keep My Credit Cards?
The Trustee will keep any credit cards that are part of your proposal. If you have a credit card with no balance that is not part of your proposal you may keep it.
How Do I Rebuild My Credit?
As part of the proposal process, you are required to attend two counselling sessions, the second is focused on helping you plan your financial future and will explain how you can re-establish credit.
The Legal Stuff
Is the Trustee My Lawyer?
No. Trustees are not lawyers; they are impartial officers of the court with a duty to administer the bankruptcy and proposal system fairly and honestly. We are regulated by the Office of the Superintendent of Bankruptcy.
Do I Need a Lawyer?
Usually not. If we feel that you have a complicated situation where you may need legal assistance we may refer you to a lawyer to get advice.
Are My Discussions with My Trustee Confidential?
We do not discuss your initial consultations before filing bankruptcy or a proposal with anyone.
If you do choose to file with us, we will have a duty to disclose anything you have told us in those meetings that are material to your filing, and will not be able to ignore it.
What Legal Aspects of Bankruptcy or Proposals Do I Need to Understand?
The law requires that people signing up for bankruptcies and proposals understand their legal responsibilities. Your Trustee will give you certain excerpts of the Bankruptcy and Insolvency Act to review and will have you sign a document attesting that you understand your responsibilities before signing the filing documents.
Don’t hesitate to ask your Trustee for clarification before signing, we will be happy to take the time to make sure you understand them.
Proposal to Creditors – FAQ
Can Filing a Proposal Stop Garnishment of My Wages?
Yes, filing a consumer proposal will stop garnishments, with the exception of garnishments for child and spousal support.
Upon filing, we will immediately inform all garnishing creditors.
When Will Creditors Stop Collection Calls?
Within ten days of your proposal, the Licensed Insolvency Trustee or Administrator will mail the proposal to your creditors. Collection calls from creditors should stop once they are notified of your proposal.
Can I Keep My Home? What about My Car?
The filing of a proposal allows you to retain control of your assets subject to the rights of creditors that have registered security against any of your assets.
If I File a Proposal, Will My Spouse Be Obligated to Pay My Debts?
Unless your spouse has guaranteed or co-signed any of your debts, they are not obligated to pay any of your debts.
What Does a Consumer Proposal Cost?
We will work with you to arrange a payment plan that is fair and within your budget. The Trustee’s fees are calculated in accordance with the Bankruptcy and Insolvency Act (BIA) and are paid from the payments that you make to us under the terms of your proposal.
Can Personal Income Tax Debts Be Included in a Proposal?
Yes, all debts, including personal income debt, as at the date of filing your proposal, are included in your Proposal.
How Long Can a Proposal Last For?
The maximum term of the consumer proposal is 5 years.
The term of a Division I proposal can exceed 5 years.
A proposal can be a lump sum payment, payments over a period of time, or a combination of both. If your circumstances change for the better, you can prepay your proposal in full at any time.
What Happens If My Creditors Don’t Accept My Consumer Proposal?
You are in no worse position than you were before filing. You are not bankrupt but may still consider filing for bankruptcy if you think that it is the best option for you at that time.
What Happens to My Credit Rating?
The filing of your proposal will be on your creditor report for 3 years after you have complied with its terms.
Can I Keep My Credit Cards?
In a Proposal, you are not required to surrender your credit cards to the Licensed Insolvency Trustee; however, most debtors surrender them to the Licensed Insolvency Trustee, as creditors will usually not allow them to be used.
Is the Licensed Insolvency Trustee My Lawyer?
No, Licensed Insolvency Trustees are not lawyers. We are impartial officers of the court with a duty to administer the bankruptcy and proposal system fairly and honestly. We are regulated by the Office of the Superintendent of Bankruptcy.
Are My Discussions with My Licensed Insolvency Trustee Confidential?
Yes, under the Personal Information Protection Act (PIPA), we cannot discuss any information that you have provided to us with any third party before you file a Proposal.
Upon filing, we will ask you to give us the authority to speak with creditors on your behalf.
Bankruptcy – FAQ
Are My RRSPs Protected?
Only RRSP contributions within the twelve (12) month period prior to your date of bankruptcy are not protected. Should your RRSP be part of a Life Insurance contract, it may be protected depending on who the beneficiaries are.
Can Filing an Assignment in Bankruptcy Stop the Garnishment of My Wages?
Yes, filing an assignment in bankruptcy will stop garnishments, with the exception of garnishments for child and spousal support.
Upon filing, we will immediately inform all garnishing creditors.
When Will Creditors Stop Collection Calls?
Within five days of you filing bankruptcy, the Licensed Insolvency Trustee or Administrator will mail the bankruptcy notice to your creditors. Collection calls from creditors should stop once they are notified of your bankruptcy.
If I Go Bankrupt Will My Spouse Be Obligated To Pay My Debts?
Unless your spouse has guaranteed or co-signed any of your debts, they are not obligated to pay any of your debts.
Will I Lose My Car?
The Court Order Enforcement Act of BC provides for an exemption of up to $5,000 equity in one of your vehicles taking into account any secured charge. This exemption is reduced to $2,000 for court-ordered family maintenance debtors.
Will I Lose My House?
Should your principal residence be in Greater Vancouver or Greater Victoria, you are allowed an exemption of up to $12,000 equity for your principal residence. The personal exemption elsewhere in B.C. is capped at $9,000.
You may have the option to pay the non-exempt portion of your home equity to the Licensed Insolvency Trustee. Every circumstance is different.
Can Personal Income Tax Debts Be Included in My Bankruptcy?
Yes, all debts, including personal income tax debt, as at the date of your bankruptcy, are eligible to be discharged in a bankruptcy.
Will My Credit Report Be Affected?
Once you are discharged from bankruptcy, the credit bureau will report the bankruptcy for 6 years after the discharge date for a first-time bankruptcy; and 14 years for any subsequent bankruptcy.
Can I Keep My Credit Cards?
Once you file for bankruptcy, you will have to surrender all your credit cards to the Licensed Insolvency Trustee.
Is the Licensed Insolvency Trustee My Lawyer?
No, Licensed Insolvency Trustees are not lawyers. We are impartial officers of the court with a duty to administer the bankruptcy and proposal system fairly and honestly. We are regulated by the Office of the Superintendent of Bankruptcy.
Are My Discussions with My Trustee Confidential?
Yes. Under the Personal Information Protection Act (PIPA), we cannot discuss any information that you have provided to us with any third party before you file bankruptcy.
Upon filing an assignment in Bankruptcy, we will ask you to give us the authority to speak with creditors on your behalf.