Your Legal Options

Your Legal Options Explained

Lots of debt? We can help.

There are many options available to help you deal with an excessive debt load.  These include avoiding Bankruptcy and keeping your assets.

We are required by Federal law to explain ALL of your options to you.

It's good to know there are many options available to help you get out of debt. Bankruptcy is only one possibility … and it should be evaluated against all other options before you proceed with any sort of protection from your creditors.

In fact, if you can avoid bankruptcy and offer your creditors a settlement offer (known as a consumer proposal) you may be in a position to reduce your debts and maintain your assets.

Before you can decide which solution is the right one for you, it would be helpful for you to sit down with one of our trained administrators who can walk you through your custom R-Plan -- it's designed to help you find the RIGHT solution for your debt problems. And the consultation is totally free of charge.

Let's take a look at some of the legal options available to you in Ontario:

(1) Consumer & Division One Proposals - A Settlement Offer That Works

Proposals are used by debtors who cannot meet their obligations but wish to make a settlement with their creditors and avoid bankruptcy. First, you work with a federally licensed Trustee to determine how much you owe, how much you can afford to pay towards your debt each month, and how long it will take you to pay it off. Then the Trustee submits your proposal to your creditors.

It’s all about breathing room. This agreement may allow you to pay off only a portion of your debts or extend the time you have to pay them off. A. Farber & Partners Inc. will prepare and present a formal proposal for you that is fair and reasonable to your creditors and also affordable for you. If the required majority of your creditors accept the offer, then all your unsecured creditors are obliged by law to also accept the offer.

Here's another benefit: Filing a Proposal immediately stops all collection efforts and legal actions by your creditors, including lawsuits, asset seizures, and wage garnishments, without having to file for bankruptcy. This type of debt relief is an excellent alternative to a personal bankruptcy filing.

The two types of Proposals are:

Division 1 Proposal. This is used mainly by small-to-medium-sized enterprises and consumers who owe more than $250,000 of debt. Creditors are asked to accept a portion of the full amount owed. Generally, the proposal is directed at ordinary unsecured creditors, while secured creditors are negotiated with individually. In larger, more complex proposals, classes of secured creditors are created to vote on the proposal. If the requisite creditors (50% in number and 66.66% in dollar value) agree and the court agrees, a debtor can restructure his or her balance sheet by reducing the debt.

Consumer Proposal. This is a simplified form of a proposal available only to individual debtors owing less than $250,000, excluding mortgages on the principal residence. An individual asks their creditors to accept a portion of the full amount owed. If more than 50% of your creditors agree and the court approves, the person can reduce their debt.

310-1100Call from any area code

Call 310-1100 toll-free to find our more about Proposals & to book your free consultation or click here to request a free meeting using our on-line system.

(2) An Alternative To A Proposal: Personal Bankruptcy

As an alternative to filing a proposal you can address your financial crisis by using your right to seek protection under the BIA (commonly referred to as “declaring bankruptcy”). Filing bankruptcy in Ontario is a relatively simple process. The Trustee handles all the legal requirements for you. This immediately stops all collection efforts and legal actions by your creditors, including lawsuits, asset seizures, and wage garnishments. The personal bankruptcy process includes debt-counseling sessions that will help you create realistic budgets and regain control over your finances. While nobody wants to go bankrupt, this may be the most appropriate solution for bringing closure to a difficult period in your life, and building a financially-secure future. It is the most fair and honest way to deal respectfully with your creditors when there are no other choices. If you feel that you just can't handle the multi-year time-frame of a proposal or feel you would struggle to make those payments to your creditors you have the legal right to file for bankruptcy protection from your creditors. Filing a personal bankruptcy in Toronto or at any of our other offices in Ontario is a very simple process and we will assist you with the entire procedure.

310-1100Call from any area code

Call 310-1100 toll-free to find our more about Bankruptcy & to book your free consultation or click here to request a free meeting using our on-line system.

Other Options Include:

(3) Informal Settlement

This is a proposal made to creditors without the protection of the Bankruptcy and Insolvency Act. It is usually negotiated by insolvency professionals, as they are aware of all other possible options, and add credibility to the negotiations. While not as easy to negotiate, nor as successful, as a Consumer or Division 1 Proposal, an informal settlement, if successful, enables you to navigate through difficult times without a formal reorganization.' In situations where informal settlement offers are not accepted, it allows creditors to pursue collection actions. The most common cause of failure happens when one creditor obtains a judgment against the debtor that renders the negotiated settlement with other creditors impossible to perform.

(4) Debt Repayment Plan

This is a type of Informal Settlement whereby we as a third party assist you in negotiations with creditors. This procedure usually requires that the full debt be repaid (over time) but stops interest from accumulating.

(5) Debt Negotiation

This process involves contacting some or all of your creditors to explain your financial situation and suggesting an arrangement that is tailored for your circumstances. With assistance from professionals at A. Farber & Partners Inc., debt negotiation could, in some cases, be a viable alternative to bankruptcy, and could preserve your credit rating.

You should be aware

There are many unlicensed firms and individuals practicing as Credit Counselors. These firms pose obvious risks to both creditors and debtors. Unlike a Proposal under the Federal Bankruptcy and Insolvency Act (BIA), in a Credit Counseling settlement scheme the creditors can change their minds mid-stream or continue to take legal action (for example: garnishment, seizure of assets, etc..) against you!

Let a licensed trustee help you arrange the protection you have a legal right to!