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Can insolvency help with student loans?

Yes, insolvency  can help with student loan debts if you have been out of school for seven years or more.

  • If you have been out of school for 7 or more years student loans are treated like regular unsecured debts.
  • Students, who have only been out of school for 5 year (but less than 7 years) and are experiencing financial hardship, may apply to the Court to request their student loans be discharged along with the rest of their debts.

How much does bankruptcy cost?

There is a basic minimum cost to file for bankruptcy. This cost will differ based on the type of assignment, whether it is a 1st, 2nd or more times you are filing.

  • It will also depend on your level of income based on the superintendent of bankruptcies guideline.
  • Allan Marshall & Associates Inc understands and deals with individuals experiencing financial problems and will clearly explain the costs associated with filing for bankruptcy.
  • Payments are usually broken down into reasonable monthly payments to allow an individual to pay the bankruptcy fee while they are being protected from their creditors.
  • The payments are often far more reasonable then people expect. Contact us today to schedule your free consultation to discuss your options.

If I File for Bankruptcy, Will It Affect My Co-Signer?

No bankruptcy itself would not affect your co-signor or a joint borrower; however, they would continue to be responsible for the debt as they agreed to pay it if the primary borrower did not.
Bankruptcy would not affect the creditor’s right to go after anyone who guaranteed or co-signed a loan. An individual’s bankruptcy would only protect them from their creditors, not other people such as co-signers, joint applicants on loans, or guarantors.

If you have a joint debt or have co-signed a debt for someone who enters into bankruptcy, the responsibility of the debt would shift to the guarantor and they should contact the lending institution to make payment arrangements, so the debt does not fall into arrears. (This would affect their credit rating).

If I declare bankruptcy does my spouse have to?

No, your spouse can decide how they need to proceed based on their own finances.   Sometimes it makes sense for couples to file together and other times it makes sense for only one partner to file a proposal or bankruptcy.

How does bankruptcy affect my spouse?

Technically bankruptcy does not affect your spouse or common-law partner.   Your spouse or partner would only be responsible for debts they co-signed, guaranteed or made a joint application for the credit.  Your spouse’s assets would not be affected by your bankruptcy. Their assets remain theirs.

How do I handle creditor calls & harrassment?

Creditors do have certain rights to collect upon their debts; however you need to know you have rights too.
A creditor is allowed to call to enquire about their debts and request a payment plan. They are however restricted on what they can say, how they act, when and where they call. For more information please review your provinces collection agency act or contact us to discuss your options.

  • Once an individual has filed for protection under the bankruptcy and insolvency act, a stay of proceedings is put into effect to stop all legal and collection proceedings including harassment.
  • All calls received after filing a proposal or bankruptcy should be referred to your trustee.
  • Should creditors continue to call. you should contact your trustee and provide them with the name and number of the creditors calling so the trustee can contact the creditor to have the calls stopped.

Will I lose my house?

If you have a house or vehicle secured by financing or mortgage you can keep them as long as the loan is current and remains up to date.  Each situation is different, and your home will be discussed with you at a consultation.  If your property has any equity,  you should discuss this with your trustee.

How long does bankruptcy last?

The answer to this question is, it depends. A number of factors are used to determine the answer to this question.

  • Is this a first time bankruptcy?
  • Is the individual’s monthly net income above the monthly surplus income guidelines?

A first time bankrupt, without surplus income, would be eligible to be discharged from bankruptcy nine months plus a day from the start of the bankruptcy.
A Second time bankrupt, without surplus income, would be eligible to be discharged from bankruptcy twenty-four months plus a day from the start of the bankruptcy.

To discuss your situation or to understand how surplus income could change the above time lines please contact Allan Marshall & Associates Inc.