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Difference between revisions of "Dealing with Debt (10:V)"
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Dealing with Debt (10:V) (view source)
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== C. Communicating with Creditors when Unable to Make Contractual Payments == | == C. Communicating with Creditors when Unable to Make Contractual Payments == | ||
:'''NOTE:''' Before communicating with creditors, debtors should be aware of the consequences of acknowledging a debt as a result of the ''Limitation Act'' SBC 2012 c 13. Under the | :'''NOTE:''' Before communicating with creditors, debtors should be aware of the consequences of acknowledging a debt as a result of the ''Limitation Act'' SBC 2012 c 13. Under the Act, for debts last acknowledged from June 1, 2013 onwards, after two years since the last acknowledgement of a debt by the debtor, a creditor has no legal recourse for pursuing the unpaid debt. Therefore, by instructing a debtor to acknowledge a debt, even implicitly, a clinician will create a renewed two year time frame for the creditor to initiate legal action against the debtor. See note above, at the start of Section III, for further information. | ||
:'''NOTE:''' Debtors should also be aware that if a judgement has been rendered against them it can be enforced for 10 years after the date of judgement (s 7). Refer to the ''Limitation Act'' for exceptions to this rule (s 23). | :'''NOTE:''' Debtors should also be aware that if a judgement has been rendered against them it can be enforced for 10 years after the date of judgement (s 7). Refer to the ''Limitation Act'' for exceptions to this rule (s 23). | ||
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== E. Voluntary Debt Repayment Programs == | == E. Voluntary Debt Repayment Programs == | ||
When someone has some ability to repay their debts, but is unable to meet the minimum payment requirements of their creditors, contact the Credit Counselling Society for help determining if the Debt Management Program (DMP) at the Society might be an option. This is an agreement between a debtor, to make set, reduced monthly payments, and their creditors, who in return agree to accept reduced payments and who often suspend or reduce ongoing interest charges. A | When someone has some ability to repay their debts, but is unable to meet the minimum payment requirements of their creditors, contact the Credit Counselling Society for help determining if the Debt Management Program (DMP) at the Society might be an option. This is an agreement between a debtor, to make set, reduced monthly payments, and their creditors, who in return agree to accept reduced payments and who often suspend or reduce ongoing interest charges. A debtor agrees not to incur further debt while on the program. If a debtor defaults from the program, creditors may proceed with any and all remedies available to them. The debtor should contact the Credit Counselling Society for more information at 1-888-527-8999. | ||
:'''NOTE:''' Though non-profit, the Credit Counselling Society does charge a small fee to administer the Debt Management Program (DMP). While counselling is free, CCS charges a one time setup fee of no more than the average monthly payment to creditors to a maximum of $75 upon entering the DMP. Once a debtor has entered intot he program and begins making payments, and only upon written acceptance by creditors, CCS charges 10% of a debtor's deposit to a maximum of $75 per month. CCS will consider reducing or waiving fees where they would become a barrier to debtors needing the help of a DMP. | :'''NOTE:''' Though non-profit, the Credit Counselling Society does charge a small fee to administer the Debt Management Program (DMP). While counselling is free, CCS charges a one time setup fee of no more than the average monthly payment to creditors to a maximum of $75 upon entering the DMP. Once a debtor has entered intot he program and begins making payments, and only upon written acceptance by creditors, CCS charges 10% of a debtor's deposit to a maximum of $75 per month. CCS will consider reducing or waiving fees where they would become a barrier to debtors needing the help of a DMP. | ||
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If all the conditions of bankruptcy have been met, there are no facts for which a discharge may be refused pursuant to s 173 of the BIA, and no objections have been filed by creditors or the Superintendent of Bankruptcy Canada; | If all the conditions of bankruptcy have been met, there are no facts for which a discharge may be refused pursuant to s 173 of the BIA, and no objections have been filed by creditors or the Superintendent of Bankruptcy Canada; | ||
*A first-time bankrupt with surplus income payable less than $200 is automatically discharged after nine months; | *A first-time bankrupt with surplus income payable less than $200 is automatically discharged after nine months; | ||
*A first-time | *A first-time bankrupt with surplus income greater than or equal to $200 is automatically discharged after 21 months; | ||
*A second-time | *A second-time bankrupt with surplus income less than $200 is automatically discharged after 24 months; | ||
*A second-time | *A second-time bankrupt with surplus income greater or equal to than $200 is automatically discharged after 36 months. | ||
The average monthly surplus income is calculated at different times (Directive 11R2, 7(1)) depending on whether there have been any material changes in the bankrupt’s financial circumstances. Examples for calculating the average monthly surplus income can be found at https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br03249.html. The period of the discharge may also be extended for certain prescribed reasons under the BIA. Consult the Office of the Superintendent of Bankruptcy or trustee. | The average monthly surplus income is calculated at different times (Directive 11R2, 7(1)) depending on whether there have been any material changes in the bankrupt’s financial circumstances. Examples for calculating the average monthly surplus income can be found at https://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/br03249.html. The period of the discharge may also be extended for certain prescribed reasons under the BIA. Consult the Office of the Superintendent of Bankruptcy or trustee. | ||
=== | === 3. Debts That Bankruptcy Will Not Discharge === | ||
A debtor should know that filing for bankruptcy will not discharge some obligations, such as: | A debtor should know that filing for bankruptcy will not discharge some obligations, such as: | ||
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The full list of exceptions may be found in s 178(1) of the BIA. Questions about bankruptcy, including specific questions regarding Canada Student Loans, may be directed to a licensed insolvency trustee or the Superintendent of Bankruptcy, at 1-877-376-9902. | The full list of exceptions may be found in s 178(1) of the BIA. Questions about bankruptcy, including specific questions regarding Canada Student Loans, may be directed to a licensed insolvency trustee or the Superintendent of Bankruptcy, at 1-877-376-9902. | ||
=== | === 4. Assets That May be Retained by the Bankrupt in B.C. === | ||
The bankrupt may retain household furnishings and appliances valued at up to $4,000 and any other goods or property exempt from execution under provincial and federal statutes (COEA, s 71(1); Court Order Enforcement Exemption Regulation, B.C. Reg. 28/98; BIA, s 67(1) and relevant amendments). | The bankrupt may retain household furnishings and appliances valued at up to $4,000 and any other goods or property exempt from execution under provincial and federal statutes (COEA, s 71(1); Court Order Enforcement Exemption Regulation, B.C. Reg. 28/98; BIA, s 67(1) and relevant amendments). | ||
