The Rebecca Martyn Bankruptcy Windsor Blog

Frequently someone emails me to find out about filing a consumer proposal or bankruptcy and they tell me that someone (usually a relative) cosigned a debt.

This is a typical scenario I see, and for the sake of making the example easy to follow I will name the debtor Fred.  Fred has 3 credit cards and a line of credit.  He is making the minimum monthly payments, but because of the high interest rate, the amount of the debt is only going down a little bit each month.  He decides to go to his bank to get a consolidation loan.  Due to his income and debt levels, the bank will not give him a loan without a co-signor.  Fred then asks his parents to co-sign the loan and they agree.   A few months later Fred is finding it difficult to make his loan payment.  His income has decreased and now his car needs repairs.  Fred has emailed me to find out what he can do.

The purpose of a co-signor is to protect the bank in the event the loan is not paid.  If Fred doesn’t pay his loan, the bank will expect payment from the co signors, in this example, his parents.  If Fred files for bankruptcy or files a consumer proposal, it does not relieve his parents of their responsibility for payment.

If you have been turned down for a consolidation loan, call us at 310-PLAN to review your options first.

I received an email a couple of day ago from someone who was being garnisheed and wanted to know what he could do.  In his email he told me that a credit card company took him to court and now his wages have been garnisheed 20%.  He wanted to know what he could do about this.  There are only 3 ways to stop a garnishment 1 – pay the debt in full, 2 – file bankruptcy and 3 – file a consumer proposal.

Once he files a bankruptcy or consumer proposal we will send a “stay of proceedings” to his employer.  This lets his employer know that the bankruptcy or consumer proposal has been filed and the garnishment is no longer in force.  Any money already deducted from his paycheque but still with the court will be sent to the trustee.  Any money already sent to the creditor will not be returned.

If you are being garnisheed and want to know if bankruptcy or a consumer proposal is the right option for you, call me at 310-PLAN or email me.

As a trustee in Windsor, Ontario everyday I meet with men and women who have had their hours cut back at work.  For years they had been working 6 days a week, 48 hours a week and they became used to this income and the lifestyle. 

Recently, many companies in Windsor have faced tough times and they are no longer offering the overtime they have in the past.  As are result, many employees are finding they are no longer able to pay their debts.  I met with someone a few months ago who was still working but was having difficulty managing his expenses with the lower income. He is married and has a nice house and 2 cars.  He was concerned that he would lose his house and cars.  He and I reviewed his budget and determined that he has the income to still be able to pay his mortgage and car loans.   However, he didn’t have enough money left over to afford even the minimum payments on his line of credit and credit cards.

He filed a consumer proposal, offering a payment plan over the next 48 months of 40 cents on the dollar to his unsecured creditors.  His unsecured creditors have accepted the consumer proposal and he is grateful for his fresh start.

If you find your income has been reduced and you would like to review your options, call me at 310-PLAN or email me for free no obligation consultation.