Questions About bankruptcy
 

They made a very low living allowance for my family $3250/m,if my income exceeds this amount for few months,they will take half of the surplus.I got no problem with this because I own them.But I don’t feel fair is the period will increase to 21 months from 9 months.Can I deal with creditors myself?

I'm pretty sure once the proceedings start, ie - paperwork has been signed and filed, you cannot back out of the agreement you made. It is a legal agreement and all. Would depend on where you are in the process I think.

I do sign but feel it’s no fair
 

There are lots jobs now and I can take one!Someone still phoning me try to make an arrangement!

You think that $3250 is a very low allowance after bankruptcy?

You should have dealt with the creditors before bankruptcy, now you have to deal with the trustee.

What is not fair? What is wrong with paying the people/businesses/creditors that gave you product or services that you have to pay back, if only a portion?

After you have declared bankruptcy they can not chase you if you declared everyone or did you leave a few out? Preferential payment can reverse the bankruptcy but you will face fines.

Actually, you can opt of the bankruptcy proceeding after it starts. But it requires you to pay all of the creditors completely, plus 5%, and all the trustees fees, including legal fees incurred by the trustee.

At least that how it used to be a long time ago when I worked for a Trustee.


Sent from my iPhone using Tapatalk

Actual law
 

As to the income guidelines, they are set by location, family size, etc, under the Act. A percentage of net income above the permitted amount per month is referred to as "surplus income" and must be paid in to be distributed to proven unsecured creditors. The intent is that a bankrupt, while in bankruptcy, should only be allowed to retain enough each month to provide necessities to themselves and dependents. It would be an affront to the system if undischarged bankrupts were allowed to keep enough to, for example, keep driving a financed late model luxury vehicle - would it not?

If the bankrupt is required to pay over surplus income, and is a first time bankrupt (repeaters are subjected to longer periods), then the minimum time between assignment and discharge is 21 months. The reasoning behind this is that the bankrupt can (whether or not it accords with their own view on this) afford to pay something to the creditors before having all the unsecured debts wiped clean.

Fair would be paying what you owe.

I also found it ironic that the fellow who isn't honoring his end of the bargain is complaining about "fairness".

And...
 

Of course you can deal with the creditors yourself, but it only works if you treat all of them in each class (secured, preferred, unsecured) exactly equally according to amounts, and get all of them to expressly agree in writing to settlement of claims on a specific basis (percentages, time, with or without interest), etc. This is exceedingly hard to do if there is even one of them who does not agree or will not negotiate, for whatever reason.

The alternative to just assigning in bankruptcy, if it looks too difficult to live with the process consequences, is to make a proposal in bankruptcy, through the trustee, in one of 2 forms, depending on the total debts involved. You and the trustee have to demonstrate how whatever is proposed (generally payment of a total over time) is better for the creditors than a simple assignment in bankruptcy. It is put to the all the creditors and if a sufficient plurality and percentage of total debt vote in favor, it is accepted and carried out. If it is rejected or defaulted, there is an automatic or likely assignment in any event. The creditors who do not vote in favor of an accepted proposal are bound by it anyway, and all actions are stayed. If it is successfully completed, all the dischargeable debts (there are some kinds of debts that are not affected) are released. But, a proposal usually is in place for somewhat longer than 21 months.

For those who think bankruptcy is just not "fair" at all to creditors, I would say, of course, there are cases where the debtor is unfairly getting off when at least something could have been paid. Actually, there are extensive rules on background and intra-process behaviour, and creditors can and do file objections to simple discharges. But they have to actually analyse things and bring their complaints forward in the proper form and content, and very few can seemingly be bothered to do so. In many cases bankrupts, particularly repeat ones, are unable to get out unconditionally or within the minimum times. The vast majority, whether due to stupid or irresponsible financial behaviour or pure misfortune (and they do run the entire spectrum), are situations where, without this option and process, there is no realistic chance at all of the debtor ever paying their debts, and it is either this or, I suppose, get a fake new ID in a foreign land (?). Debtor's prisons just won't cut it in a society like ours (?).

A big part of the problem is the drunken sailor approach of many players in our financing sectors to granting credit. One sees repeat bankrupts who, less than 10 years after the first time around, have several of the exact same creditors, in the same context, as last time. The current record-holder in my experience for number of separate credit cards is 32. Vehicle financiers openly advertise that they will finance even known undischarged bankrupts, and I have seen it. I have even seen a chartered bank issue a new VISA card to an undischarged bankrupt as to whom they were one of the proven unpaid creditors relative to the pre-existing card. With this approach it is hardly surprising that a lot of "low information" types get sucked into the vortex of unmanageable debt.

Takes about 7 years of good credit after bankruptcy to have any chance at a decent loan interest rate.

I have heard people that approach creditors outside of bankruptcy to take cents on the dollar versus fighting in court for a piece.

Not sure how much you were in debt or why but you are in for some tough times ahead.

I know people that have gone through it. Buckle down...take the learning lesson and follow the rules and move on.

This thread was a hit and run.

I don't think the OP wanted any truth in the replies.

Armchair critics in full force.

I also see where individuals with bad credit and released from Bankruptcy can access vehicle loans quicker than some individuals with marginal credit although thru higher interests rates.

Tough crowd in here. Bankruptcy is not an easy thing to bring yourself to declare or to live with. Takes a long time to get over feeling ashamed and feel a sense of self worth again.

Bankruptcy
 

It should take a long time to get over it. Bankruptcy is basically a process where you surrender your financial affairs to a trustee since you are incapable of handling them yourself (or presumably you would do that) You are in essence being treated like a child where someone runs your financial affairs for you as you cannot do it yourself. ALWAYS REMEMBER THAT "DEBT" IS A 4-LETTER WORD for a reason

I think he got more that the truth. There sure are a few tools on this forum.

In answer to your question OP, it is unlikely that your trustee will penalize you for going slightly over the limit for the odd month but if you demonstrate that you are capable of repaying more to you creditors then the trustee must keep you in for 21 months. The nine month discharge is only available if there is no advantage to your creditors of keeping you in for 21 months.

9 months is if you are not making any money. 21 is if you are making a income. And you are not guaranteed a discharge after 21 months.


Sent from my iPhone using Tapatalk

IMO the question already contained the answer - the OP already signed the agreement. Only useful reply was - yes, you can, if you pay off all creditors and trustees their dues.
Otherwise either suck it up for 9 months, or that job better be really well paid so you can give half of the excess for 21 months (and possibly longer) to someone else, and the remainder would make it worth the hassle.

Went through the proposal myself, so not an armchair critic.

More than a few years ago I was very bad at managing my debt while I tried to hold my family together. My wife sued me for divorce, a couple of creditors took me to small claims and I had a couple of garnishments on my paychecks. I was in a bad way but I took on an evening job and worked 7 days a week for years. Got so that I really hated those collection agency guys. And the CRA. I repaid all that I owed and started over with nothing.

After I was out of debt I went to my bank and asked for a small loan to get back on my feet. My request was denied with the words "We won't even open a chequing account for you. You would have been better off to have filed for bankruptcy protection."

I responded with "You'd rather do business with a deadbeat than an honest man who honored his debts?"

"They are not deadbeats. They are people who have fallen on hard times." WTF
Anyway, I have moved on, own my house, live debt free in retirement and all is good.

Free

Good on you to get back on your feet, hey we live in Canada and it can be done, what gets me is how people fall flat yet still,reach out, get helped and fall flat again:snapoutofit:

You chose to battle through, learn from it and get what you want by blood, sweat and tears....most should take note....

You didnt give much details as to what why and how your in this situation so i will share my personal experience for the sake of helping you or someone else in the future as many people know about their options.

2 years ago i lost my job in calgary and took a job in regina for half the pay plus i had to drive back and forth on my own dime. For 10 months we raked up about 18000 in credit card debt and it didnt look too good. We had good credit and minimal debt other than that.

So i went to the bank and took out a 48 month personal loan at prime plus 4.5% just to try and save on the interest. As the credit card was 21%. We saved so much on the interest that we paid off the loan in 13 months. And since we did not use a credit restructuing service, our credit scores were not impacted and managed to contain this problem pretty quick.

Times can be tough and a person shouldn't be ashamed to ask for help. Tighten your belt a bit and pay it back as dast as u can. Thats the only advice i can give u