I normally follow the same procedure when I meet with people to review their financial situation. But sometimes people who I see already have their minds made up. That is not necessarily a bad thing but sometimes they don’t know or understand all the other options available.
My first job is to make sure I understand their financial situation. And then my next job is to make sure they understand the various options available.
Many people think I can offer them a loan. Trustees in bankruptcy do not do that. What we do is advise the options that are available (a loan from another source might be an option) and how they impact their situation. Everyone’s situation is different and not every option will work for every person.
I met with someone just lately who had an investment but it appeared a creditor had taken security on that investment. Now at first glance her situation seemed easy. There were no assets to be redeemed by the trustee for the creditors, her income was low enough that there would be no surplus income, and the creditors involved would be happy to close the file.
Further review of her documents showed that there might be a chance that the investment would not be available to the creditor, but could be used to fund a proposal.
What to do?
In this case we filed the bankruptcy. Doing it this way gives us, as the trustee, the right to look into the investment even more deeply. If the investment is not secured and is available to the trustee, then we will file a proposal. Yes, there is initially a bankruptcy, but if the proposal can be filed, then it will be completed very quickly as the investment will be offered to the creditors. All the parties should be happy because the proposal will be completed quickly and the file can be closed by the trustee and the creditors in a very short time. And a debtor who didn’t know what to do about their debt will be going on with their life free of debt.
Now this type of situation does not happen often, but in this case the debtor was happy that I made the proposal suggestion.
So, which option would be best for you? It depends on many factors and at Hoyes, Michalos we try to do a consumer proposal if it is at all an option. Knowing all your options is the first step to resolving your financial difficulties and reading the information available in our websites will help. http://www.hoyes.com/learn-bankruptcy-consumer-proposals.htm.
Call us today at 519-435-1500 if you are having problems to set up a free consultation.
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