Howard Hayes Bankruptcy Cambridge Blog: Howard Hayes Answers Questions about Bankruptcy in Cambridge

Why settle for less? What are the chances my creditors will actually accept my consumer proposal?

Often when I tell people about consumer proposals; that they can offer to pay their creditors only part of their debt, they are very skeptical. It seems too good to be true that just by paying what you can afford over a period of time, your debts will be erased. People often wonder, why would my creditors go for this? Especially if they have spent a lot of time harassing you with collection calls and perhaps even garnishing your wages. It seems the creditors would stop at nothing to get the money you owe, why would they now agree to take any less?

A well-designed proposal administered by a licensed bankruptcy trustee ensures that it is fair for both the debtor and the creditors. The fact is, creditors know when you are in financial trouble because you are not making your payments to them and when you approach them with a proposal they know that if they don’t accept it, you will probably need to file bankruptcy.

A consumer proposal offers the creditors more money than they would receive if you filed bankruptcy. So for them, it does not make good financial or common sense to refuse the proposal because they will end up getting far less money when you are forced to go bankrupt.

When you file a proposal here in Cambridge with a trustee from Hoyes, Michalos & Associates, we will make sure that you can afford it but that it is also fair and resonable to both you and the creditors. If the proposal is well-designed, the chances of the creditors accepting it are very high. The creditors do not want you to go bankrupt anymore than you want to.

A bankruptcy trustee can help you figure out what you can afford to give your creditors and if a proposal would be a good option for you. If you would like to set up a free-of-charge initial consultation to learn more about consumer proposals, please call the Cambridge office today at 519-622-3773 or send us an e-mail. We look forward to meeting with you!

If I go bankrupt, will my spouse also have to go bankrupt?

This is one of the most common questions I come accross here in our Cambridge office when somebody is considering filing a bankruptcy. People seem to think that because you are married, you must go bankrupt together. However, whether or not your spouse will need to file bankruptcy with you depends on your individual situation.

In general, when you get married whatever debts you had to your name remain yours and yours only, so if you file bankruptcy in order to have them cleared it will have no effect on your spouse.
In the event that your spouse has co-signed or guaranteed any of your debts or if they hold a supplementary credit card on your account, they may need to file for bankruptcy also.

When the creditors find that they are unable to get the money you owe to them from you, they will go to your spouse to get if their name is also on the debt. If your spouse cannot make the payments either, then they too will have to look at options to deal with the debt including filing for personal bankruptcy.

Be careful for credit card companies that say supplementary card holders are responsible only for the charges that they put on the card. It is often too difficult for them to tell who made what charges and so they will try to make your spouse pay the entire amount.

If neither you nor your spouse can make the payments on debts which have both your names on them, you may need to file a joint bankruptcy. If you would like to learn more about filing a joint bankruptcy or would like information on alternatives to bankruptcy such as a consumer proposal or credit counselling and if you are unsure whether your spouse is going to be affected by your debt troubles, call me today at 519-622-3773 or send an email and I will be happy to answer any of your questions.

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Posted on Friday, November 07, 2008

Why settle for less? What are the chances my creditors will actually accept my consumer proposal?

Posted on Thursday, October 30, 2008

If I go bankrupt, will my spouse also have to go bankrupt?