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Richard Killen on Tunedin with Lucy Zilio

In this video, Lucy Zilio talks with Richard Killen on Richard Killen & Associated 25th Anniversary.

Richard, a Licensed Insolvency Trustee (LIT) talks about more and more people with debt challenges choose a consumer proposal over bankruptcy. Watch the video for more information.

What Happens To My Debts If I Go Bankrupt

 

In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about, What Happens To My Debts If I Go Bankrupt.

People sometimes ask me what is really happening with regards to my debts if I go bankrupt or if I do a consumer proposal? The first thing that happens with regards to your debt, when a person does a bankruptcy or proposal, the first thing that happens is a Stay Of Proceedings goes into effect. It’s kind of like a wall that goes up and separates them from their debts, from their creditors. This Stay Of Proceedings prevents the creditors from being able to continue to pursue them for the money. So, the first thing that happens is that you get this relief from the creditors who you are delinquent with. But eventually, when you go bankrupt or do a proposal, you are essentially trying to get to debt free land. And, when you get your discharge from the bankruptcy, or when you get the certificate at the end of the proposal, to show that you have paid the proposal in full, essentially you have reached debt-free land. So, what happens at the end is, basically, you are no longer responsible for all the debts you had on the date you went bankrupt. Now there is an exception to that, that exception, of course, is a secured creditor. A secured creditor, if you own a home or a car, and you want to keep the car, then you are going to have to keep paying that creditor throughout the bankruptcy or proposal in order to retain the asset.

If you are uneasy about bankruptcy you should definitely visit a licensed insolvency trustee so that you will be given an advice about your bankruptcy problems.

What Are The Different Types Of Creditors

 

In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about, What Are The Different Types Of Creditors.

In a Trustees world, there are three types of creditors, there are secured creditors, unsecured creditors, and contingent creditors. Contingent creditors are if you have co-signed for someone for instance. You may never be asked to pay that thing because the other person is going to do all the paying. But, who knows. The ones we regularly have to deal with, the ones that matter, are secured and unsecured creditors. The vast majority of the ones that we deal with are the unsecured creditors. The unsecured creditors are the ones who don’t have any particular rights in terms of being able to effect repayment of their debt. They have to go through the courts, get judgments and things like that. A secured creditor is a person who has a contract, you have given that person a contract, that specifically designates that they have a right to come and take a particular thing away from you if you don’t pay them. So, a typical one is a mortgage. If you give a mortgage to the bank because they leaned your money to buy a house, then if you don’t make the payments on that loan, that mortgage allows them to come and repossess the house. Same thing with a car loan and things like that. So a secured creditor is essentially a person who doesn’t have a lot to do with a bankruptcy or proposal. They are kind of outside the bankruptcy and proposal.

If you are uneasy about bankruptcy you should definitely visit a licensed insolvency trustee so that you will be given an advice about your bankruptcy problems.

Will I Lose My Personal Possessions If I Go Bankrupt

 

In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about, Will I Lose My Personal Possessions If I Go Bankrupt.

There is a Provincial law that regulates what a person might lose, or can lose, actually let me turn it around, there is a Provincial law that regulates what creditors can take from you. If you are not paying them, and they are trying to recover their debt by seizing things. Furniture and personal effects are essentially off the table. Personal effects are essentially completely protected, and furniture, you would have to have furniture that is worth so much money that before it hit the threshold, where a creditor can take it, frankly, I don’t remember a time when I had something like that. So, essentially, this law regulates that people don’t lose their furniture or personal effects. Now, this law applies to a Trustee in a bankruptcy situation, but like I say, who has stuff that’s worth that much? Most people, let’s face it, if you have a couch that your five-year hold has been bouncing up and down on for the last three years or something like that, it’s not going to be worth very much in terms of resale, is it?

If you are uneasy about bankruptcy you should definitely visit a licensed insolvency trustee so that you will be given an advice about your bankruptcy problems.

What Happens To My Co-signor?

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In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about, What Happens To My Co-signor?.

 

When people do a bankruptcy or even a consumer proposal, if they have a co-signor on one of their debts, they are going to be very concerned about what is going to happen in regard to their co-signor. The fact of the matter is that when you do a bankruptcy or consumer proposal, you are just relieving your own responsibility for those debts. You are not able to do anything for the other person. In other words, if I were to co-sign somebody else’s debt, they go bankrupt, they are not responsible for it anymore but now the creditors are going to want me to pay, and that is just a fact of life. That is what co-signing is all about. Now, whether or not that person has to pay the whole thing at once, usually can be worked out with the creditor but a bankruptcy or proposal will not relieve somebody else from their responsibilities.

 

If you are uneasy about bankruptcy you should definitely visit a licensed insolvency trustee so that you will be given an advice about your bankruptcy problems.

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Do I Have To Pay a Minimum Portion?

In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about, Do I Have To Pay a Minimum Portion?.

Some people are under the impression that they go bankrupt or for that matter they do a consumer proposal, they are required to pay a certain percentage of what they owe, what their overall debts are. That’s not quite the way it works. In a bankruptcy, it’s not that at all. In a bankruptcy, there is a mechanism that will determine whether or not if you have to make any payments for your creditors into the bankruptcy. It’s based on what you earn, what your monthly salary is. There’s a formula for all that, and a Trustee explains that to you and a Trustee does the calculation and all that. In a proposal, it can be a little bit of a factor trying to determine how much you are going to offer the creditors and all that. But, there is no fixed idea that you have to pay 20% or 10% or 50% of whatever you owe. In a proposal, you offer the best you can, and you try to work out a deal with the creditors that they are willing to accept of what you are going to pay. In a bankruptcy, this formula is applied, if you earn enough money you will pay that money into the bankruptcy in order to obtain your discharge. It doesn’t matter what percentage it is.

If you are uneasy about bankruptcy you should definitely visit a licensed insolvency trustee so that you will be given an advice about your bankruptcy problems.

How Long Will My Bankruptcy Last in Ontario?

In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about, How long a Bankruptcy lasts.

There tends to be some general misunderstanding about how long a bankruptcy lasts. People hear things about this 7 years business, not being able to obtain credit, and things like that. But, essentially a bankruptcy is a legal process, it has a beginning and it has an end. It begins when you file for bankruptcy. It ends when you are discharged from the bankruptcy and therefore from your debts. So, how long will it last? Well, for the majority of people who have gone bankrupt, it’s their first and hopefully only bankruptcy, they are eligible for the discharge to take place in nine months. If they earn above a certain pre-set amount, an amount the Government sets for your monthly income, then if you earn more than that, bankruptcy might be extended by 12 months, from 9 to 21 months. If you have been bankrupt once before, you are going to be eligible to be discharged automatically in 24 months, not nine. And if you earn again, above that amount, then you will get the 12 months tacked onto that too, so you will end up being bankrupt for 36 months. So, generally speaking, a person goes bankrupt, they are bankrupt either 9 or 24, or 21 or 36 depending on the circumstances. Now, there are other factors that come into play, that could extend the bankruptcy, it would result in a person having to go to court to get their discharge and all that. Now, those are the kinds of things a Trustee needs to explain to you. And there are so many different variables.

If you are uneasy about bankruptcy you should definitely visit a licensed insolvency trustee so that you will be given an advice about your bankruptcy problems.

Would Services of a Trustee Prevent Me From Getting a Mortgage?

In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about “Would Services of a Trustee Prevent Me From Getting a Mortgage”.

One of the big ambitions of most people, especially for the family is to ultimately buy a house. People who have debt problems come to see a Trustee and end up do a bankruptcy or perhaps a consumer proposal, are going to be concerned whether this bankruptcy or consumer proposal is going to somehow prevent them from being able to obtain a mortgage at a later date. The only way that we can really answer this is, nobody can really predict the future, there is a lot of factors that go into why a person can get a mortgage, and why they cannot. Bankruptcy and proposals on your record are just one factor, and also time. The bottom line is, it is impossible to really predict it, but generally speaking, after you have done a bankruptcy or proposal, and have solved all your credit problems, and some time has gone on, most people can and have the other ingredients properly arranged, they can get the mortgage. An interesting aspect of it though is the mortgage renewal, people are highly concerned that they may lose their house when the renewal time comes. And what we found, I’m not an expert on this practice, but what we found is that renewals, I guess they are automatic, generally they are almost computer generated, and so very few people have this kind of problem renewing their mortgage.

If you are uneasy about mortgage you should definitely visit a licensed insolvency trustee so that you will be given an advice about your mortgage problems.

Will My Boss Find Out About My Bankruptcy?

In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about if the boss can find out about the bankruptcy.

The only time that a person’s employer is officially told, that they have gone bankrupt or that they have done a consumer proposal, if they have been sued and garnished by somebody, and your employer is having to deduct money from your pay to send to the court because of the garnishee. The person going bankrupt is basically going bankrupt or doing a consumer proposal, that’s one of the big thing that they are trying to stop that garnishee. A bankruptcy and consumer proposal will do that but isn’t going to stop if we don’t tell the employer to stop it. Yes, the employer would get notified in that case. The other thing I can think of is offhand, and where we would have this kind of contact with an employer, is if we had to contact an employer to find out some information that is of important to the creditors. Like for instance, say you have a profit sharing plan at work, and your employer is the only one who has the details of it, the profit sharing might be money that belongs to the creditors in a bankruptcy, you see the trustee has to verify this information. Now, there are different ways of verifying it, we might be able to verify it by having you get the information and providing it to us so there is no direct contact with your employer. We prefer to do it that way as long as we can get the facts. Generally speaking, an employer is not, I can’t even remember the last time that we contacted an employer when there was no garnishee involved.

If you are uneasy about your bankruptcy you should definitely visit a licensed insolvency trustee so that you will be given an advice about consumer proposal and debt problems.

What Happens To My Job If I Go Bankrupt In Ontario

In this video, Richard Killen, a Toronto-based Licensed Insolvency Trustee talks about if your job is affected by a bankruptcy.

Generally speaking, a person’s employment is not affected by a bankruptcy and not affected negatively by a bankruptcy. In fact, in may be affected positively by a bankruptcy. This is because you might be able to focus a lot more on your job if you don’t have to worry about your debts. However, in terms of any legal effects of a bankruptcy or proposal, there are some professions where it is effected, chartered accountants, for instance, lawyers, people who operate trust accounts like real estate brokers, things like that. There would be some negative affect of going bankrupt for people in those positions. But, for the vast majority of us, nope, the main effect is often positive. So, to answer the question, don’t be afraid of your job being affected negatively by either a bankruptcy or consumer proposal.

If you have debt problems and are concerned about how it may affect your job, I encourage you to call our office and talk to a trustee.

About Richard Killen & Associates


Since 1992, Richard Killen & Associates, a Licensed Insolvency Trustee, have helped thousands of people resolve their financial problems. With 25 years experience in this industry, our president, Richard Killen, and the rest of our team understand the difficulties that honest people can sometimes find themselves in. This expertise makes it possible to provide you with a service that effectively deals with the issues.


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