Debt management guide [woodgreen] by The Yonge Street Mission

Services Professionals

Management Debt Management Guide: Guide: ource A Resource for Social for Social ces Professionals Services Professionals

Debt Management Guide: A Resource for Social Services Professionals By:

Alla Zhura, Osgoode Hall Law School with Elaine Magil, WoodGreen Community Services

(Resources used include Office of Consumer Affairs, Industry Canada; Office of the By:

Superintendent of Bankruptcy Canada, Industry Canada; Financial Consumer Agency of

e Hall Law School Alla Zhura, Osgoode Hall Law School Canada; and Ministry of Consumer Services, Ontario) with Green Community Elaine Magil, Services WoodGreen Community Services

e Office of Consumer (Resources Affairs, used include Industry Office of Consumer Canada; Affairs, Office Industry of the Canada; Office of the kruptcy Canada, Superintendent Industry of Canada; BankruptcyFinancial Canada, Industry Consumer Canada; Financial Agency Consumer of Agency of f Consumer Services, Canada; and Ontario) Ministry of Consumer Services, Ontario)

www.woodgreen.org

TABLE OF CONTENTS Introduction.................................................................................................................................3 Personal Steps to Reduce Debt............................................................................................4 Making a Budget ............................................................................................................5 Contacting Creditors .....................................................................................................6 Selling Personal Assets and Possessions ............................................................8 Dealing with Collection Agencies.........................................................................8 Professional Assistance to Reduce Debt...................................................................... Credit Counselling ...................................................................................................... Debt Management Programs ............................................................................... Debt Consolidation Loans ......................................................................................

11 12 12 14

Legal Assistance to Reduce Debt .................................................................................... 17 Consumer Proposal .................................................................................................... 18 Bankruptcy .................................................................................................................... 21 Waiting to Respond to Collection Efforts .................................................................... 27 Conclusion ................................................................................................................................. 29

INTRODUCTION Debt and money are a constant concern for many people living on low or based agencies are called upon to inform and counsel clients who struggle with debt. It is crucial that we, on the front lines of this issue, have at least a basic understanding of the debt and collections systems, and of a debtor’s options and rights. We are the most trusted source of information for many low-income debtors. Social service providers’ advice and referrals may have long-term

HOW TO USE THIS GUIDE We need to know what we’re talking about. This Guide can help. This Debt Management Guide was created to assist volunteers at WoodGreen’s groundbreaking Debt Management Clinic, who meet one-on-one with community members to educate them on their options. It is now available for social services staff who want to know how to help clients deal with debt. This Guide provides a comprehensive explanation of the options available to any debtor in Ontario, with practical advice about what may make the most sense for low-income debtors. It starts with a chart outlining options, and later explains these options in detail. Wherever this Guide isn’t exhaustive, it will direct you to other sources that may provide further and more detailed information on any given topic. It’s wise to check web resources when working with clients on debt management, as policies, amounts, and rights may change from time to time. This Guide is accurate as of March 2012.

Elaine Magil WoodGreen Community Services March 2012

WoodGreen’s Debt Management Clinic and this Guide are made possible by the generous support of our funder, the TD/SEDI Financial Literacy Grant Fund.

WoodGreen WoodGreen Community Services Community Services WoodGreen Community Services

Personal Personal Steps Steps to Reduce to Reduce Debt Deb

Personal Steps to Reduce Debt

Can Can you you manage manage repaying repaying this debt onthis yourdebt own? o

1 1. . Can you manage repaying this debtMOST on SUITABLE your own? ADVANTAGES ADVANTAGES DISADVANTAGES DISADVANTAGES FOR MO

Budgeting Budgeting .............................................................................................................................................. ....................................................................................................... 6 (tracking (tracking expenses expenses and ensuring and they ensuring are withinthey the person’s are within means) the person’s means)

-- Informal Informal

- May not be able-toMay achieve not thebe able to- achieve Individualsthe who usually make most - Ind desired results in reducing desired debt results in reducing or all of their debt required payments, or a but are temporarily having but - Creditors may be - unwilling Creditors to accept may be unwilling to accept -- Quick Quick results results (contacting (contacting creditors creditors partial or reduced partial repayment or reduced repayment - People or with at least some money - Peo setbacks) setbacks) - Debtor may feel-anxious Debtor or have may feel anxious have available to use towards debt ava linguistic barriers in linguistic communicating barriers in communicating repayment repa with creditors with creditors -- Low Low cost cost

Budgeting .............................................................................................................................................. 6 (tracking expenses and ensuring they are within the person’s means)

ADVANTAGES - Informal - Low cost

- Creditors will retain - Creditors the information will retain the information the debtor provides the them debtor with and provides them with and may limit or refusemay futurelimit credit or refuse future credit based on it based on it

DISADVANTAGES

MOST SUITABLE FOR

- Overall payment - may Overall actually payment be may actually be increased if the repayment increased period ifisthe repayment period is - May not bewithout able to achieve Individuals the who usually make most extended extended loweringthe the without-lowering interestresults rate in reducing interest desired debtrate or all of their required payments,

are temporarily having administrative administrative will be charged)” will be charged)” - Creditors may befees unwilling to accept fees but partial or reduced repayment - People with at least some money setbacks) - Debtor may feel anxious or have available to use towards debt 7 Contacting Creditors Creditors ......................................................................................................................... linguistic.................................................................................. barriers in communicating . .Contacting repayment (debtor (debtor makesmakes special arrangements special arrangements with creditors regarding regarding his/herhis/her debt) debt)

- Quick results (contacting creditors

2 2 3 3. . 4 4. . 4

- Creditors will retain the information Selling Selling Personal Personal Assets and Assets Possessions and ................................................................................ Possessions ......................................... 9 the debtor provides them with and (in(in order order to payto offpay debt) off debt) may limit or refuse future credit based on it to Agencies Dealing Dealing with with Collection Collection Agencies ....................................................................................... to ................................................ 9 arrange arrange settlements settlements or payment orplans payment - Overall payment may actually beplans increased if the repayment period is extended without lowering the interest rate -

rsonal Steps to Reduce Debt Personal Steps to Reduce Personal Debt Steps to ReducePers Deb

1. Making a Budget 1. Making a Budget1. Making a Budg

obligations exceed his means, it can be helpful obligations to createexceed a budget his(or means, it can be helpful obligations to create exceed a budget his means, (or it can b spending plan). This can help the person identify spending areas plan). of overspending This can help the person identify spending areas plan). of This overspending can help the per There are many budgeting There are many budgeting There are many budgeting and possibly put that money towards paying and offpossibly their debts. put that money towards paying and off possibly their debts. put that money towards

tools available on the internet. Check websites 1)such as OSB Canada ,

tools available on the internet. Check websites 1) such as OSB Canada ,

Steps to Follow:

tools available on the Steps to Follow: internet. Check websites 1) such as OSB Canada ,

Steps to Follow:

a. What are the person’s needs?

b. b. b. of Consumer Affairs , of Consumer Affairs , of Consumer Affairs , c. What is the person’s attitude towardsand money? c.Canadian What is the Banker’s person’s attitude towards c. What is theBanker’s person’s attitude to and Canadian Banker’s andmoney? Canadian Association. Association. Association.

a. This involves setting short-term, mid-term a. and Thislong-term involves setting goals and short-term, mid-term a. This andinvolves long-term setting goalsshort-term and placing them in order of priority. placing them in order of priority. placing them in order of priori

b. The goals must be realistic, have a determined b. Thetime goalsframe, must be and realistic, be have a determined b. The goals time must frame, beand realistic, be hav

c. Essentially, the three sub steps here are: c. Essentially, the three sub steps here are:c. Essentially, the three sub steps i. Identify the objectives,

i. Identify the objectives,

ii. Prioritize the objectives,

iii. Establish the necessary actions to achieve iii.these Establish objectives. the necessary actions to achieve iii. Establish these objectives. the necessary ac

3) Establish the budget:

a. The person should plan his/her income and a. The expenses personfor should a set plan his/her incomea.and Theexpenses person should for a setplan his/he period of time (can be done daily, weekly orperiod monthly). of time (can be done daily, weekly period or monthly). of time (can be done da

b. It is important that the budget is realistic.b. It is important that the budget is realistic. b. It is important that the budget

4) Track one’s expenses:

a. This can be done over a one month period a. (all Thisexpenses, can be done big and over a one month period a. This (all can expenses, be done bigover anda one m small) or ideally even longer. small) or ideally even longer. small) or ideally even longer. b. It may be helpful to keep all receipts.

b. It may be helpful to keep all receipts.

b. It may be helpful to keep all re

5) Compare the budget with the real expenditures: 5) Compare the budget with the real expenditures: 5) Compare the budget with the re 2

a. Any discrepancies should be carefully reviewed a. Any discrepancies and addressed. should be carefully reviewed a. Any discrepancies and addressed. should be c 2 2 For more information see Industry Canada, For more information see Industry Canada, For example, if a budget shows expenses less For than example, income, if aask budget the shows expenses less For than example, income, if a budget ask the shows ic.gc.ca/eic/site/oca-bc.nsf/eng/h_ca02145.html>. ic.gc.ca/eic/site/oca-bc.nsf/eng/h_ca02145.html>. client whether they actually end the month client withwhether money left they over. actually endic.gc.ca/eic/site/oca-bc.nsf/eng/h_ca02145.html>. the month client with whether moneythey left over. actually e For more information see Industry Canada,

Personal Steps to Reduce Debt c. If there are any creditors who have contacted the debtor already in regards to defaults on their payments, the debtor may choose to reality of their situation. d. If there is default on essential services such as hydro, heat, or rent, b. This helps in identifying where the person overspends, and it also helps in making the budget more realistic possible service cuts or loss of their home. and accurate. e. The debtor can try to make new payment arrangements for all

6) Review budget regularly: typesthe of debts except mortgages, although even these may

a. By constantly being aware of the budget the person learns to control 3

<http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/ br02049.html#steps>.

Supra note 2.

<http://cba.ca/en/consumer-information/41saving-investing/57-managing-money>.

payment relief period of up to six months There are many budgeting tools available on the internet. Check websites (deferred payment of principal). 3 4 such as OSB Canada , and f. Canadian Banker’s Association5 . debts, since they will increase faster than others. 2) When contacting creditors by telephone, remind clients to write down the name and contact information of anyone they speak with, as well as any details about the debt that the creditor provides (interest rate, balance, status). The debtor may also wish to use registered mail for anything sent via Canada Post, and/or keep receipts or photocopies of Another way mailed. to ease debt repayment is by making arrangements with the anything creditors for one or more of the following: 3) The debtor can offer a proposal based on his/her budget and how much • Lower monthly payments

2. Contacting Creditors

•

Longer time period to make the payments If a client can demonstrate that his/her only source of income is social • Lower rate of assistance, forinterest example, the creditor may be more able to accept a lower repayment amount. This option is most suitable for individuals who can commit to paying off some either inbe a lump-sum or ongoing. Someone with the absolutely a. amount, The budget can used to show the creditors how much debtor no money available for debt shouldn’t bother contacting creditors because is able to pay until his/her situation improves. It is important to be there’s nothing to arrange. total debt the number of realistic and proposeIfathe payment planload thatand is feasible. The creditor is creditors that the person owes money to is excessive, the creditors may not unlikely to be understanding if the debtor defaults on his/her new be willing to make any arrangements and other debt management options payment plan. (such as those laid out in the rest of this Guide) may be more suitable. b. It is in the creditors’ interest to negotiate with the debtor since they Steps to follow: really want to recover the money owed to them. However, the notalegally obliged to make any special arrangements 1) Firstcreditors step is toare make list of the creditors to contact. Reviewing the with the debtor, nor are they required to abide by them. Their budget may reveal which creditors need to be contacted in order to ongoing cooperation completely voluntary66 . make the debt repaymentismore manageable. c. If The debtor should be polite but persistent. Creditors probably a. reducing the monthly payment for a single debt iswill enough, it be less inclined to help if the individual is aggressive. won’t be necessary to contact all of the creditors. 66

online: online: <http://www.ic.gc.ca/eic/site/oca-bc.nsf/ <http://www.ic.gc.ca/eic/site/oca-bc.nsf/ eng/ca02155.html>. eng/ca02155.html>.

886

4) b. If there is a need to contact more than one creditor, the debtor contact creditors to whom theyofowe the largest amounts a. could The debtor canthe prepare a brief summary his/her telephone of money. This will have a greater impact on the monthly conversation with the creditors and send it to them (by faxbudget. or

ersonal Steps to ReducePersonal Debt Steps to Reduce Personal Debt Steps to ReducePer De

c. If there are any creditors who have contacted c. If there theare debtor any creditors already inwho have contacted c. If there the are debtor anyalready creditors inwho h regards to defaults on their payments, theregards debtorto may defaults choose ontotheir payments, theregards debtor may to defaults chooseon totheir paym

d. If there is default on essential servicesd.such If there as hydro, is default heat, on or rent, essential servicesd.such If there as hydro, is default heat, or onrent, essential se

possible service cuts or loss of their home.possible service cuts or loss of their home.possible service cuts or loss of th

e. The debtor can try to make new payment e. The arrangements debtor can try for to allmake new payment e. The arrangements debtor canfor tryall to make new types of debts except mortgages, althoughtypes evenofthese debtsmay except mortgages, althoughtypes even of these debts may except mortgages

payment relief period of up to six monthspayment relief period of up to six monthspayment relief period of up to si (deferred payment of principal). (deferred payment of principal). (deferred payment of principal) f.

f. f. debts, since they will increase faster thandebts, others. since they will increase faster than debts, others.since they will increase fa

2) When contacting creditors by telephone, 2) When remind contacting clients to creditors write down by telephone, 2) remind When contacting clients to write creditors down by telep the name and contact information of anyone the name they speak and contact with, as information well as of anyone the name they speak and contact with, asinformation well as any details about the debt that the creditor any provides details about (interest therate, debt that the creditor any provides details(interest about the rate, debt that the c balance, status). The debtor may also wish balance, to use registered status). The mail debtor for may also wishbalance, to use registered status). The mail debtor for may als anything sent via Canada Post, and/or keep anything receiptssent or photocopies via Canada Post, of and/or keep anything receiptssent or photocopies via Canada of Post, and anything mailed. anything mailed. anything mailed.

3) The debtor can offer a proposal based on 3) his/her The debtor budget can and offerhow a proposal much based on 3) his/her The debtor budget canand offer how a proposal much base

If a client can demonstrate that his/her only If a client sourcecan of income demonstrate is social that his/her only If asource client can of income demonstrate is social that his/ assistance, for example, the creditor may assistance, be more able forto example, accept athe lower creditor may be assistance, more able fortoexample, accept a lower the creditor repayment amount. repayment amount. repayment amount.

a. The budget can be used to show the creditors a. The budget how much can be theused debtor to show the creditors a. Thehow budget much canthe be used debtor to show is able to pay until his/her situation improves. is ableIttoispay important until his/her to be situation improves. is ableItto is pay important until his/her to be situa realistic and propose a payment plan thatrealistic is feasible. andThe propose creditor a payment is plan thatrealistic is feasible. andThe propose creditor a payment is unlikely to be understanding if the debtor unlikely defaultstoon behis/her understanding new if the debtorunlikely defaultsto onbe his/her understanding new if payment plan. payment plan. payment plan.

b. It is in the creditorsâ&#x20AC;&#x2122; interest to negotiate b. with It is inthe thedebtor creditorsâ&#x20AC;&#x2122; sinceinterest they to negotiate b. with It is in thethe debtor creditorsâ&#x20AC;&#x2122; sinceinterest they to n really want to recover the money owed to really them. want However, to recover the the money owed toreally them.want However, to recover the the mone creditors are not legally obliged to make any creditors special arearrangements not legally obliged to make any creditors special are arrangements not legally obliged with the debtor, nor are they required to abide with the by them. debtor,Their nor are they required to abide with the by them. debtor, Their nor are they req 6 6 . cooperation is completely voluntary . cooperation is complet ongoing cooperation is completely voluntary ongoing ongoing

c. The debtor should be polite but persistent. c. The Creditors debtor will should probably be polite be but persistent. c. The Creditors debtorwill should probably be polite be but less inclined to help if the individual is aggressive. less inclined to help if the individual is aggressive. less inclined to help if the indiv 4) 6

4) 6

a. The debtor can prepare a brief summary a. of The his/her debtortelephone can prepare a brief summary a. ofThe his/her debtor telephone can prepare a brief su

online: <http://www.ic.gc.ca/eic/site/oca-bc.nsf/ online: <http://www.ic.gc.ca/eic/site/oca-bc.nsf/ online: <http://www.ic.gc.ca/eic/site/oca-bc.nsf/ conversation with the creditors andeng/ca02155.html>. sendconversation it to them (bywith fax or the creditors andeng/ca02155.html>. send conversation it to them (by with fax orthe creditors eng/ca02155.html>.

Personal Personal Steps Steps to to Reduce Reduce Debt Debt repayment, repayment, either either in in aa lump-sum lump-sum or or aa series series ofhonour monthly monthly payments. As As by registered mail). If the creditors do notof thepayments. commitments always, always, it’s wise wise to to document document this in inletter writing writing and, and, ifif possible, possible, enclose aa theyit’s made, having a copy this of the of agreement may enclose facilitate good good faith faith payment. payment. their rectifying the situation.

Collectors have a great deal of they accept. Less than 50% of the amount owed is not common, although certainly possible. Because the collectors have such leeway in determining what the settlement amount will be, debtors would be wise to consider their own negotiation skills in this process. Some debtors, for example those with limited English-speaking skills, may wish to enlist the assistance of a trusted ally to help If If an an individual individual feels feels that that negotiate a fair and manageable settlement amount.

3) 3) b. The TheThe payments payments should be be made made in indebtor aa manner manner that provides proof proof of ofof a creditorshould may offer, or the maythat ask provides for, a settlement payment payment (and (and never neverwould in in cash). cash). debt: the creditor reduce the total debt (for example, from $5000 to $4000) on the condition that it’s paid with a lump-sum 4) 4) within a shortonly timewith frame. If agency such a proposal is agreed the theamount debtor debtor will will be be dealing dealing only with that that agency when when making making upon, the debtor should get the agreement in writing, the arrangements arrangements for for payment. payment. There There is is no no need need to to contact contact the thestating original original terms (that there is no outstanding debt due and that the debt now creditor creditor as as this this may may create create confusion, confusion, unless unless there’s there’s an an error error in in the theisaccount account cleared with this creditor). in in which which case case the the debtor debtor should should advise advise both, both, the the creditor creditor and and the the collection collection agency. c. After a agency. settlement payment has been sent, a debtor may wish to check that the information has been accurately updated on his/her credit report. Limitations Limitations on on the the Actions Actions of of Creditors Creditors and and Collection Collection Agencies Agencies 5) If, after making the arrangements, the debtor cannot honour his/her part of the agreement, he should contact the creditor as soon as possible and explain theof new include include the the name name of the thesituation. creditor; creditor; the the amount amount the the creditor creditor claims claims the the debtor debtor

try try to to determine determine whether whether there’s there’s been been aa recent recent change change of of address, address, or or whether whether mail mail was was received received but but not not

owes; owes; and and the the name name of of the the collection collection agency agency and and its its authority authority to to demand demand payment payment on on behalf behalf of of the the creditor. creditor. After After sending sending the the notice, notice, the the agency agency must must wait wait 66 days days before before itit can can contact contact the the debtor debtor in in person person or or by by phone. phone.

3. Selling Assets/Possessions

The The agency agency cannot cannot continue continue to to contact contact the the individual individual if: if: While not always easy to do, selling an asset is one way to alleviate a •• The The individual individual sends sends aa registered registered letter letter to to the the agency agency saying saying that that he/she he/she disputes the the debt debt and and suggests suggests the the matter matter be be taken taken to to court; court; shedisputes owns (but does not owe money on). •• The The individual individual (or (orcosts his/her his/her lawyer) lawyer) sends aa registered registered letter letter to to the the agency agency There are usually no involved insends selling most assets. However, the providing providing the the lawyer’s lawyer’s contact contact information information and and notifying notifying the the agency agency to debtor may incur costs if he/she has to hire a professional or has certain to communicate communicate only only with with the the lawyer; lawyer; •• The The individual individual has has told told the the collection collection agency’s agency’s representatives representatives that that he/she he/she is is not not the the person person they they are are looking looking for, for, unless unless they they take take reasonable reasonable precautions precautions to to ensure ensure the the individual individual is is that that person. person.

4. Dealing with Collection Agencies Other Other Restrictions Restrictions on on the the Collection Collection Agencies Agencies

A collection agency is a person or company hired to obtain or arrange for 1) 1) After After the the initial initial contact contact between the the agency’s agency’s representative representative and the the payment of money owed tobetween a third party (creditor). If a collectionand agency debtor, debtor, the the agency agency cannot cannot contact contact the the debtor debtor more more than than 3 3 times times in in 77 be contacts the debtor regarding an outstanding debt, the following stepsaamay day day period period unless unless it it is is by by regular regular mail, mail, or or they they obtain obtain consent consent of of the the debtor. debtor. taken: “Contact” “Contact” means means the the agents agents must must actually actually speak speak with with the the debtor, debtor, email email 1) If possible, payment the debt should madeanswer immediately to avoid him/her, him/her, or orthe leave leave aa voice voiceofmail. mail. If If the the debtor debtorbe doesn’t doesn’t answer the the phone phone and and further interest charges. The agency will stop contacting the individual the the agents agents don’t don’t leave leave aa message, message, itit doesn’t doesn’t count count as as aa contact. contact. once the account has been cleared. 2) 2) The Theagency agencyCANNOT: CANNOT: 2) If it is impossible to pay the full amount at once, the debtor should a. a. contact contact the the debtor debtor on on Sunday, Sunday, except between the the hours hours of of 11method pm pm contact the agency to explain whyexcept and tobetween offer some alternative of and and 55 pm; pm;

8 10 10

Personal Steps to ReducePersonal Debt Steps to Reduce Debt Personal Steps to ReducePer De

repayment, either in a lump-sum or a series repayment, of monthly either payments. in a lump-sum As or a series repayment, of monthly either payments. in a lump-sum As or a always, it’s wise to document this in writing always, and,it’s if wise possible, to document enclose athis in writing always, and, if it’spossible, wise to enclose document a this in w good faith payment. good faith payment. good faith payment.

3) The payments should be made in a manner 3) The that payments provides should proofbeofmade in a manner 3) The that payments providesshould proof of be made in a m payment (and never in cash). payment (and never in cash). payment (and never in cash). 4)

4) 4) the debtor will be dealing only with thatthe agency debtorwhen will be making dealing only with that agency the debtor when willmaking be dealing only with t arrangements for payment. There is no need arrangements to contactfor thepayment. original There is no need arrangements to contact the fororiginal payment. There is n creditor as this may create confusion, unless creditor there’s as this an error may create in the confusion, account unless creditor there’s asan this error mayincreate the account confusion, in which case the debtor should advise both, in which the creditor case theand debtor theshould advise both, in which the creditor case the and debtor the should advis collection agency. collection agency. collection agency.

Limitations on the Actions of Creditors Limitations and Collection on the Actions Agencies of Creditors Limitations and Collection on the Actions Agencies of Cred If an individual feels that

If an individual feels that

include the name of the creditor; the amount include thethe creditor nameclaims of the creditor; the debtor the amount include the creditor the name claims of thethe creditor; debtorthe amo try to determine try to its determine try toitsdetermine whether owes; and the namewhether of the collection agency owes; and and the authority name ofwhether to the demand collection agency owes; andand the authority name of to the demand collection age there’s been a recent there’s been a recent change there’s been a recent change payment on behalf of thechange creditor. Afterpayment sending the on behalf notice, of the the agency creditor. must After sending payment the on notice, behalf the of the agency creditor. mustAfter of address, or whether mail the debtor of mailthe debtorwait ofperson or phone. whether mail the debt wait 6 days before it can contact wait in6address, person days before oror bywhether it phone. can contact in 6address, days or before by it can contact

was received but not

The agency cannot continue to contact the Theindividual agency cannot if: continue to contact theThe individual agency cannot if: continue to contact th •

The individual sends a registered letter • to The theindividual agency saying sendsthat a registered he/she letter• to The the agency individual saying sends that a registered he/she lette disputes the debt and suggests the matter disputes be taken the todebt court; and suggests the matter disputes be taken the to court; debt and suggests the ma

•

The individual (or his/her lawyer) sends • The a registered individual letter (or to his/her the agency lawyer) sends • aThe registered individual letter(or tohis/her the agency lawyer) sen providing the lawyer’s contact information providing and notifying the lawyer’s the agency contactto information providing and notifying the lawyer’s the agency contact to inform communicate only with the lawyer; communicate only with the lawyer; communicate only with the lawyer;

•

The individual has told the collection• agency’s The individual representatives has toldthat the collection he/she agency’s • The individual representatives has told that the he/she collection is not the person they are looking for, unless is notthey the person take reasonable they are looking for, unless is not they the take person reasonable they are looking for, precautions to ensure the individual is that precautions person. to ensure the individual is that precautions person. to ensure the individual

Other Restrictions on the Collection Other Agencies Restrictions on the Collection Other Agencies Restrictions on the Collecti

1) After the initial contact between the 1) agency’s After the representative initial contact andbetween the the agency’s 1) Afterrepresentative the initial contact and the between the a debtor, the agency cannot contact the debtor debtor, more the than agency 3 times cannot in contact a7 the debtor debtor, more the than agency 3 times cannot in a 7contact the day period unless it is by regular mail, orday they period obtain unless consent it isof bythe regular debtor. mail, or they day period obtain unless consent it of is by theregular debtor.mail “Contact” means the agents must actually “Contact” speak with means thethe debtor, agents email must actually“Contact” speak with means the debtor, the agents email must actu him/her, or leave a voice mail. If the debtor him/her, doesn’t or answer leave a voice the phone mail.and If the debtor him/her, doesn’tor answer leave the a voice phone mail. and If the d the agents don’t leave a message, it doesn’t thecount agentsasdon’t a contact. leave a message, it doesn’tthe count agents as adon’t contact. leave a message, it do 2) The agency CANNOT:

2) The agency CANNOT:

a. contact the debtor on Sunday, except between a. contactthe thehours debtor ofon 1 pm Sunday, except between a. contact thethe hours debtor of 1on pmSunday, exc and 5 pm; and 5 pm; and 5 pm;

Personal Personal Steps Steps to to Reduce Reduce Debt Debt repayment, repayment, either either in in aaon lump-sum lump-sum or orday aa series series of ofweek monthly monthly payments. payments. As As b. contact the debtor any other of the between the hours always, always, it’s it’s wise wise toam; document document this this in in writing writing and, and, ifif possible, possible, enclose enclose aa of 9 pm and 7to good good faith faith payment. payment. c. contact the debtor on a statutory holiday; 3) 3) The The payments payments should should be be made made in in aa manner manner that that provides provides proof proof of of d. use threatening, profane, intimidating or coercive language; payment payment (and (and never never in in cash). cash). e. use undue, excessive or unreasonable pressure; 4) 4) f. debtor give false orbe misleading information any person the the debtor will will be dealing dealing only only with with that thatto agency agency when whenregarding making making the debtor; arrangements arrangements for for payment. payment. There There is is no no need need to to contact contact the the original original creditor creditor as as this this may may create confusion, confusion, unless unless there’s there’s an an error error in in the the account account g. recommend to acreate creditor that a legal action be commenced against the in in which which case case the the debtor debtor should should advise advise both, both, the the creditor creditor and and the the collection collection agency. agency. h. charge extra fees above the outstanding debt which the debtor owes to the creditor and the collection agency is attempting to recover.

Limitations Limitations on on the the Actions Actions of of Creditors Creditors and and Collection Collection Agencies Agencies

If If an an individual individual feels feels that that try try to to determine determine whether whether there’s there’s been been aa recent recent change change of of address, address, or or whether whether mail mail was was received received but but not not

3) In general, a collection agency can contact the debtor’s employer once to obtain debtor’s employment information. Otherwise, they cannot contact the employer unless: include include the the name name of of the the creditor; creditor; the the amount amount the the creditor creditor claims claims the the debtor debtor a. and employer hasof guaranteed the agency debt; owes; owes; and the the name name of the the collection collection agency and and its its authority authority to to demand demand payment payment on behalf behalf of the the creditor. creditor. After After sending sending the the notice, notice, the thegiven agency agency must b. theon call is in of respect of a court order or wage assignment tomust a wait wait 66 days days before before it it can can contact contact the the debtor debtor in in person person or or by by phone. phone. credit union;

c. the debtor provided written authorization to contact his/her employer. The The agency agency cannot cannot continue continue to to contact contact the the individual individual if: if: 4) A collection agency cannot contact the debtor’s spouse, a member of the •• The The individual individual sends aa registered registered letter to to the the agency agency saying saying that that he/she he/she debtor’s family sends or household, or aletter relative, neighbour or acquaintance disputes disputes the debt debtthe and and suggests suggests the the matter matter be be taken taken to to court; court; unless: except tothe obtain debtor’s address and telephone number, •• The Thethe individual individual (or (or his/her his/herhas lawyer) lawyer) sends sends aathe registered registered letter to to the the agency agency a. person contacted guaranteed debt; letter providing providing the the lawyer’s lawyer’s contact contact information information and and notifying notifying the the agency agency to to b. the debtor gave permission for the person to be contacted. communicate communicate only only with with the the lawyer; lawyer; •• The The individual individual has has told told the the collection collection agency’s agency’s representatives representatives that that he/she he/she If the collection agency has breached any oftake thereasonable above, the is is not not the the person person they they are are looking looking for, for, unless unless they they take reasonable debtor can: to ensure precautions precautions to ensure the the individual individual is is that that person. person. • send the agency a letter outlining why the debtor believes they have acted inappropriately and notifying them that he/she expects them to Other Other Restrictions Restrictions on on the the Collection Collection Agencies Agencies comply with the law; • 1) 1) After After the the initial initial contact contact between between the the agency’s agency’s representative representative and and the the ministry debtor, debtor, the the agency agency cannot cannot contact contact the the debtor debtor more more than than 33 times times in in aa 77 day day period period unless unless itit is is by by regular regular mail, mail, or or they they obtain obtain consent consent of of the the debtor. debtor. “Contact” “Contact” means means the the agents agents must must actually actually speak speak with with the the debtor, debtor, email email him/her, him/her, or or leave leave aa voice voice mail. mail. If If the the debtor debtor doesn’t doesn’t answer answer the the phone phone and and the the agents agents don’t don’t leave leave aa message, message, itit doesn’t doesn’t count count as as aa contact. contact. 2) 2) The Theagency agencyCANNOT: CANNOT: a. a. contact contact the the debtor debtor on on Sunday, Sunday, except except between between the the hours hours of of 11 pm pm and and 55 pm; pm;

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WoodGreen Community WoodGreen Services Community Services

WoodGreen Community Services

Assistance Professional Assistance In Reducing In Reducing Debt Debt

Professional Assistance In Reducing Debt 1. 2.

.................................................................................................................... Credit Counselling ........................................................................................................................ 1414

d advice (professional on dealing education with anddebt) advice on dealing with debt)

rograms Debt.................................................................................................. Management Programs .................................................................................................. 1414

makes special (when a credit debt counsellor repayment makes special arrangements debt repaymentwith arrangements creditors with creditors on on behalf of the debtor)

1. 2.

Credit Counselling ........................................................................................................................ 14

ADVANTAGES DISADVANTAGES DISADVANTAGES SUITABLE MOST SUITABLE FOR FOR (professional education and advice on dealing withMOST debt)

- Counsellor may achieve better - Individuals that - Individuals can demonstrate that can demonstrate anan results than the debtor when ability to make ability thetomonthly make the monthly contacting creditors regular expenses plus the arranged regular expenses plus the arranged payments on the payments plan, on the in plan, addition in addition to to payment on debt) payment on debt) paying for their paying regular for their monthly regular monthly - Saves the debtor a lot of time (and bills bills and expenses possibly stress) as the counsellormay not have - Credit counsellors - Credit the counsellors may not have the and expenses makes all the phone calls and does - People who feel - People that whothe feel that stress the stress of of all the negotiating debt is a primary debt is or a primary majororissue major issue highly unregulated highly unregulated - Only have to make a single monthly payment - High cost (fees, interest charges) - High cost (fees, interest charges) -

Debt Management Programs .................................................................................................. 14

(when a credit counsellor makes special debt repayment arrangements with creditors on behalf of the debtor) Strict monthly repayment schedules - Strict monthly repayment schedules

- Debtor cannot incur other debt - Debtor cannot incur other debt

ADVANTAGES

DISADVANTAGES

MOST SUITABLE FOR

oans .......................................................................................................... Debt Consolidation Loans .......................................................................................................... 1515 . - Counsellor may achieve better - Individuals that can demonstrate an results than the debtor when ability to make the monthly ADVANTAGES DISADVANTAGES DISADVANTAGES MOST SUITABLE MOST FOR FOR contacting creditors paymentsSUITABLE on the plan, in addition to regular expenses plus the arranged - Lower interest rate than credit card debt paying for that their regular monthly payment onto debt) - (still Individuals that - Individuals have anhave acceptable an acceptable - No - No reduction have in overall debt have to - Saves thereduction debtor a lot of in timeoverall (and debt (still - All pay creditors will promptly be paid in full the entire amount back over paytime) the entire amount back over time) billsthey and expenses demonstrate that demonstrate that will they bewill able be able to to possibly stress) as the counsellor - Financial Credit counsellors may not have the - A to maintain a good credit rating - chance Financial institution may not- be as institution may not manage be as the loan manage the loan makes all the phone calls and does - People who feel that the stress of - Only have to make a single monthly (default on payments may result (default in on payments may result in payment all the negotiating debt is a primary or major issue - Interest on loan may be lower than highly unregulated - Debtor may be required - Debtor some may form be required to give some form - interest Only have to make a single monthly otherwise accruing on the debtsto give of security on the loan of security on the loan payment High costinstitution (fees, interest charges) - Financial institution may cancel - - Financial the may cancel the debtorâ&#x20AC;&#x2122;s credit cards and other sources debtorâ&#x20AC;&#x2122;s credit cards and other sources - ofStrict monthly repayment of credit to ensure the debtor does credit not to ensure the debtorschedules does not accumulate any further debt accumulate any further debt

- Debtor cannot incur other debt

11 13 13

Professional Assistance In Reducing Debt

1. Credit Counselling Some agencies offer assistance by providing the debtor with credit counselling services. These agencies may be community based and may not charge for their services, or they may have fees for helping the debtor make a budget and helping him/her get out of debt. Some of these agencies actually do relatively little counselling, and instead engage in administering debt management or debt consolidation plans (described below). Since the agencies often get monetary incentives from the creditors for administering these plans, they have a vested interest in servicing only debtors that qualify for such plans. This means income to qualify for such a plan will not receive any credit counselling. these plans onto their clients, they may not provide the debtors with other viable or even better options, such as bankruptcy or no action at all.

2. Debt Management Programs The debtor can register for a debt management plan through a not-for-

counselling is rarely free. Before agreeing to work with a credit counselling agency on debt repayment, it is wise understanding of the fees and costs

12 14

authorizes a counsellor to speak to creditors on his/her behalf in order to make special arrangements regarding his/her outstanding debt. The counsellor may be able to negotiate a better payment schedule and lower budget. Essentially, the counsellor sets up and administers a debt management plan for the debtor. In most cases, the plan involves the debtor making one regular payment to the agency, and the counsellor then divides the agreed upon amounts among the creditors. The debtor decides, with the help of the counsellor, which creditors the agency contacts on his/her behalf in order to accomplish debt settlement. Once again, the budget is helpful in making this determination.

Professional Assistance In Reducing Debt

Cost of Debt Management Plans Depending on the organization, this service may be free, but in most cases it involves a fee. The fees vary based on the services offered. It may combination of all three. It is best to contact the organization offering these services directly and ask for their fee schedule. Before signing any contracts the debtor should make sure it includes all the services discussed and the exact costs he/she will have to pay. It may be a good idea to shop around for an agency before committing to anything.

Main Credit Counselling Agencies Servicing Ontario 1. Credit Counselling Canada (CCC) a. agencies. It provides contact information for agencies throughout Canada. b. Phone: 1-866-398-5999 c. Website: http://www.creditcounsellingcanada.ca/ 2. Ontario Association of Credit Counselling Services (OACCS) a. agencies. It provides contact information for agencies in Ontario. b. Phone: 1-888-7-IN DEBT c. Website: http://www.oaccs.com/agencies.html#Toronto 3. Consolidated Credit Counselling Services of Canada, Inc. a. Toll Free: 1-800-656-3920 b. Website: www.consolidatedcredit.ca 4. Credit Canada a. Toll Free: 1-800-267-2272 b. Website: www.creditcanada.com 5. InCharge Canada a. Phone: 416-637-6820 b. Website: http://www.inchargecanada.ca/

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Professional Assistance In Reducing Debt

3. Debt Consolidation Loans new loan (not all debts can be combined into a consolidation loan, for example a mortgage or a car loan cannot be included). The debtor must then pay off this loan saving money because the interest rate on the loan tends to be lower than other types of debt such as credit cards. The debtor is therefore able to pay off the debt faster, as well.

institutions. In order to qualify for a consolidation loan, a consumer usually needs to have an to manage repaying the loan on top of paying for their regular monthly bills and expenses. A debtor may also be more likely to be approved for a consolidation loan from the institution with whom they do most of their banking. A solid banking relationship can be very helpful for a consumer in this situation. Once someone has debts that have gone unpaid for a long period of time or been at reasonable interest rates.

Cost of Debt Consolidation Loans It does not cost anything to apply for a loan in order to consolidate all the debts. However, there may be some administrative fees. Arranging a consolidation loan does not cause any additional damage to debtorâ&#x20AC;&#x2122;s credit rating so long as he/she continues to make the monthly payment. Steps to Follow: 1) draw up a complete list of his/her current debts to determine the total amount of the outstanding debt. Though the debtor doesnâ&#x20AC;&#x2122;t have to include all debts, he/she anyways when they check the debtorâ&#x20AC;&#x2122;s credit history). 2) The debtor can try to negotiate a better interest rate on the loan by shopping

credit is already somewhat damaged, mainstream banks may not approve the request but other lenders may, at higher rates of interest.

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Professional Assistance In Reducing Debt 3)

The debtor should carefully review the terms and conditions of the loan (loan term, interest rate, special conditions, application or service fees, etc.) so that he/she knows exactly how much the loan will end up costing altogether.

4) will pay off the outstanding debts to the creditors. 5) close all other accounts that the debtor has (e.g.: with stores, businesses or credit card issuers), to make sure that the debtor doesnâ&#x20AC;&#x2122;t increase the debts while paying off the consolidation loan.

4. Dealing with Mortgage The Canada Mortgage and Housing Corporation (CMHC) suggests that in ability to make regular mortgage payments (for example job loss or family income reduction), the mortgagee should contact his/her mortgage lender

Steps to Follow: 1) Talk to the mortgage professional: a. situation through early intervention, the borrower should call his/ b. The borrower should ask the mortgage professional about situation; and c. Keep the mortgage professional informed as circumstances evolve. 2) a. Before meeting with the mortgage professional, the borrower any credit cards, loans, and household bills with the amounts owing and their due dates, plus information about current income, savings accounts, investments, and any other assets.

15 17

Professional Assistance In Reducing Debt 3) Stay informed: a. The more information the borrower has at his/her disposal on decisions. For mortgages insured by Canada Mortgage and Housing Corporation (CMHC), CMHC provides mortgage professionals with tools and the

• mortgage in order to protect the borrower from a sudden interest rate increase, should one occur. • Offering a temporary short-term payment deferral. The mortgage particularly if previous lump sum prepayments have been made, or if the borrower has previously chosen an accelerated payment schedule. • Extending the original repayment period (amortization) in order to lower the monthly mortgage payments. Making a loan last longer means less is owed at each payment. • Adding any missed payments (arrears) to the mortgage balance and spreading them over the remaining mortgage repayment period. • Offering a special payment arrangement unique to the individual’s

CMHC is also willing to consider other alternatives proposed by the mortgage professional to resolve or avoid mortgage payment default. In circumstances. A homeowner having trouble making mortgage payments will generally rather than after several payments have been missed.

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WoodGreen Community WoodGreen Services Community Services

WoodGreen Community Services

nce Legal To Assistance Reduce To Reduce Debt Debt

1 Assistance To Reduce Debt Legal

..................................................................................................................... Consumer Proposal ....................................................................................................................... 2222

h creditors (negotiated to pay agreement off only with a creditors portion to pay of offthe onlyunsecured a portion of the unsecured debt and debt toand beto be er of the released debt)from the remainder of the debt)

ADVANTAGES DISADVANTAGES DISADVANTAGES MOST SUITABLE MOST SUITABLE FOR FOR - Interest - Debtor on debt cannot stops accumulating choose and which debts - Debtorto cannot be choose which - debts Individual’s to be -total Individual’s debt total does debt not doesexceed not exceed only included part of debt to in creditors the proposal needs to be included in the proposal $250,000, not including $250,000, not including debts secured debts secured by by paid their principaltheir residence principal residence - Debtor cannot eliminate support - Debtor cannot eliminate support - Debtor and retains alimony all of his/her obligations, assets student and alimony loan obligations, student - Individual loan is- insolvent Individual is insolvent (unable (unable to make to make obligations, andbysecured obligations, as aand secured debtspayments such as a andpayments selling and the selling netthe assets net assets - Actions against the debtor unsecured debts such house and a car loan house mortgage and a car loanwould not cover would the notdebts) cover the debts) creditors, suchmortgage as wage garnishments,

will - Debtor be stoppedmust still pay a portion - Debtor of his/her must still pay a portion - Individual of his/her has - Individual income has to income make to make some some outstanding debt outstanding debt payment to the payment creditors to the creditors - Debtor can solve his/her money problems - All credit withoutaccounts having to must be cancelled - All credit accounts must be-cancelled Bankruptcy for - Bankruptcy this individual for this individual would would declare bankruptcy - Credit rating reduced to an R7- (as Credit opposed rating reduced to an R7 (as opposed payments, and/or payments, theand/or individual the individual - Credit to rating no effect reducedon to an credit R7 (compared rating) to no effect on credit rating) has assets thathas would assets that bewould lost be inlost a in a to R9 for a bankrupt) bankruptcy (such bankruptcy as equity (such as equity in a house in a houseor or a car) a car)

Consumer Proposal .......................................................................................................................22 (negotiated agreement with creditors to pay off only a portion of the unsecured debt and to be released from the remainder of the debt)

.................................................................................................................... Bankruptcy ....................................................................................................................................... 2525

which the (a formal debtor legaldeclares process in which bankruptcy the debtor declares and surrenders bankruptcy and surrenders his/her his/her kruptcy, assets who to the then trustee sells in bankruptcy, them and who distributes then sells them and thedistributes money theamong money among the creditors)

ADVANTAGES

DISADVANTAGES

MOST SUITABLE FOR

ADVANTAGES DISADVANTAGES DISADVANTAGES MOST SUITABLE MOST SUITABLE FOR FOR Interest onisdebt stopsfrom accumulating Debtor cannot choose which debts to be has Individual’s debt does notdebt exceed -- The - Expensive debtor released the legal and - - Expensive - Individual - -Individual attempted hastotal attempted other other debt obligation to repay the debts he/she had management management options and options has and not has not been been - Bankruptcies generally do not - affect Bankruptcies the generally do not affect the only part of debt to creditors needs to be included in the proposal $250,000, not including debts secured by at the date of bankruptcy, except for rights of secured creditors (for example rights of secured carcreditors (for example car certain types of debts that are excluded loans, mortgages, etc) - Individual has - Individual a large has amount a residence large amount of debt of debt paidloans, mortgages, etc) their principal - Debtor cannot eliminate support - Once the debtor is bankrupt, - Bankruptcy does actions not absolve -the Bankruptcy debtordoes not absolve debtor - the Majority of the - Majority debt of isthe unsecured debt is unsecured against him/her by unsecured creditors, of alimony payments and spousal of alimony or payments and spousal or - Individual has - Individual a small hasamount a small amount of assets of assets such as wage garnishments, will be child support payments, student child loans, support payments, student loans, that would bethat seized wouldduring be seized during bankruptcy bankruptcy stopped

- Debtor retains all of his/her assets

and alimony obligations, student loan - Individual is insolvent (unable to make obligations, and secured debtsmisleading such as a payments and selling theis already net assets -credit Individual’s rating creditisrating already poor poor andagainst debtthe arising from fraud or misleading and debt arising from fraud-orIndividual’s - Actions debtor by unsecured representation representation -loan The potential - adverse The potential effects adverse effects of of house mortgage and a car would not cover the debts) creditors, such as wage garnishments, bankruptcyon bankruptcyon the individual’s the individual’s - Credit rating reduced to R9 (the - Credit worst rating reduced to R9 (the worst spouse and/orspouse family and/or members family members must must be be possible) and remains on the credit possible) and remains on the credit considered report for at least 6 years from the report date for at least 6 years from considered the date of discharge, which will occur at of discharge, least 9 which will occur at least 9

will be stopped

- Debtor can solve his/her money problems without having to declare bankruptcy

- Credit rating reduced to an R7 (compared

- Debtor must still pay a portion of his/her outstanding debt

- Individual has income to make some payment to the creditors

- All credit accounts must be cancelled

- Bankruptcy for this individual would

- Credit rating reduced to an R7 (as opposed to no effect on credit rating)

payments, and/or the individual has assets that would be lost in a

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Legal Assistance To Reduce Debt

1. Consumer Proposals A consumer proposal is a formal procedure governed by the Bankruptcy and Insolvency Act where the debtor works with a trustee in bankruptcy8 to put together an offer to pay his/her creditors a percentage of what is debtor has to pay off the debt, or a combination of both. Payments are made through the trustee, and the trustee uses that money to pay each of the creditors. The debt must be paid off within 5 years. This option is available to individuals8 whose total unsecured debts do not exceed $250,000, not including debts secured by their principal residence. A consumer proposal will not allow the debtor to: • pick and choose the debts to be included • eliminate support and alimony obligations • eliminate student loan obligations • deal with secured debts, such as a house mortgage and a car loan The unsecured creditors will not be able to take legal steps to recover their debt (such as seizing assets or garnishing wages) unless the proposal is withdrawn, rejected or annulled, or if the administrator is discharged before the proposal was fully performed. Creditors will accept a consumer proposal if they see that they will lose more if the debtor declares bankruptcy. Steps to Follow: 1) Debtor should contact a person who is either a trustee in bankruptcy or a person appointed by the Superintendent of Bankruptcy to administer proposals. This administrator will assess the debtor’s 8

The trustee can be found in the Trustee

Bankruptcy (OSB), online: http://www.ic.gc.ca/ eic/site/bsf-osb.nsf/eng/h_br01993.html, or by searching trustee bankruptcy” in the Yellow Pages.

2) . At that time:

Not available to businesses. Division I Proposals are available for both individuals and businesses. 10

duties under the Bankruptcy and Insolvency Act. bankruptcies, examines bankrupt people under oath, and chairs meetings of creditors.

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a. Debtor stops making payments to his/her unsecured creditors (will still need to make payments on the mortgage, car, and other property that can be repossessed), b. Wage garnishments will stop, c. Lawsuits against the debtor by his/her creditors will be put on hold.

Legal Assistance To Reduce Debt

3) the proposal is fair and reasonable, and whether the debtor will be able to perform it. 4) At the same time the administrator submits the proposal to the creditors. The administrator will also give them: a. A statement of the debtor’s affairs (including a list of assets and liabilities, a list of creditors, information about debtor’s personal affairs, and debtor’s budget), b. Administrator’s report on debtor’s personal situation. 5) The creditors have 45 days to accept or reject the proposal, during this time: a. One or more creditors with 25% or more of the outstanding debt can call for a creditor’s meeting: i. Each creditor is given votes equal to the dollar value of the debt owed to them. ii. If 50% plus one vote in favour of the proposal, the proposal is accepted and applies to all creditors. b. Any creditors that do not respond will be considered to have accepted the proposal. c. The OSB can also direct the trustee to call a meeting of creditors at any time within this 45-day period. A meeting of creditors will be held within 21 days after being called. d. the proposal, the proposal will be deemed to have been accepted by the creditors, regardless of any objections received. 6) After another 15 days, if none of the creditors try to block the proposal in the courts, then the proposal is considered to have been approved by the court. a. (which are arranged by the trustee). b. Debtor is now responsible for paying either a lump sum or periodic payments to the trustee and adhering to any other conditions in the proposal.

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Legal Assistance To Reduce Debt

7) Note, if the proposal is rejected, the debtor will no longer be protected by the Bankruptcy and Insolvency Act. The administrator will notify 5 days. The creditors will now be able to take legal steps to recover their debts. a. Debtor may choose to make changes to the proposal and resubmit declare bankruptcy. 8) will be legally released from the debts included in the proposal. a. However, if the debtor misses three payments, or if the last payment is more than three months past due, the proposal will be deemed annulled. This means the creditors will be able take action to collect the money owed to them, unless the court has ordered otherwise, or an amendment to the consumer proposal has b. If the proposal is annulled and full debt load is restored, interest will have accumulated at the original rate of interest that applied to each debt. c. An administrator can revive the proposal by providing notice to creditors about a temporary inability to make payment (for example due to an illness or temporary unemployment).

Cost of Consumer Proposals The total cost of a consumer proposal is the sum of the payments agreed to in the proposal. The higher the payment and the longer the payment schedule, the more the overall cost. The amount can be paid as a lump sum or in regular instalments over a number of years as set out in the proposal. The payment plan for a consumer proposal cannot exceed 5 years; however, 5 year proposals often end up failing and wind up in bankruptcy. Generally, a manageable consumer proposal with a good chance of success has a term of 3 years or less. Unlike in bankruptcy, a debtor can keep his/her assets so long as the payments are being made to both: a) the trustee as set out in the proposal, and b) other creditors with the right to repossess debtorâ&#x20AC;&#x2122;s property (secured creditors).

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Legal Assistance To Reduce Debt

There are no additional payments to be paid to the trustee for fees and disbursements as they are included in the debtor’s payments. The debtor pays the amounts set out in the consumer proposal to the trustee and the trustee deducts his fees prior to distributing the remainder to the creditors. Note on Credit Rating Filing a consumer proposal will result in a very low credit score. Consumer proposals create an R7 rating and, in Ontario, this will stay on the credit report for 3 years after the debtor makes the last payment. Some debtors will pay off the amount faster than scheduled or even in a single payment, in order to start the countdown on removing the R7 rating and begin restoring their credit rating. As part of the proposal process the debtor will be required to cancel his/her credit accounts, and will likely not be able to get access to any credit until after the consumer proposal is removed from the debtor’s credit report.

2. Bankruptcy any combination of formal and informal steps (some of which are listed above) and nothing has worked, bankruptcy becomes a viable option. Bankruptcy is a formal legal process governed by the Bankruptcy and Insolvency Act. When a debtor declares bankruptcy, his/her assets (except those exempt by law) are given to a trustee in bankruptcy who then sells them and distributes the money among the creditors. It’s important to understand that bankruptcy usually doesn’t mean that the person must give up all their belongings; there are clear rules about what an individual can “carry through” a bankruptcy, and these limits are explained in the Execution Act.

All or part of the value of certain items, such as a principle residence, some furnishings, and tools needed for work, may be exempted under the Execution Act. These amounts differ by province. Each debtor’s situation may vary, and a trustee will be best able to advise.

Note that only assets owned by the bankrupt are included in the bankruptcy. If assets are jointly owned with a spouse, then the bankrupt’s portion may have to be sold and distributed to the creditors. A debtor’s bankruptcy also does not affect the liability of anyone who guaranteed or co-signed a loan on his/her behalf (for example, a spouse may still be accountable for liabilities incurred jointly with the debtor). It is important to make the trustee aware of joint assets so that each case can be reviewed individually. Once the debtor is bankrupt, actions against him/her by unsecured creditors, such as wage garnishments, will be stopped. However, bankruptcies generally do not affect the rights of secured creditors (for

21 25

Legal Assistance To Reduce Debt example creditors who have a valid security against the debtor’s property, such as a car or a house). Steps to Follow: 11

See note 8

Debtor should contact a trustee in bankruptcy and attend a meeting with him/her to discuss the debtor’s personal situation and available options. Once decided on bankruptcy, the trustee will help debtor 11

2) means that: a. Debtor stops making payments directly to the unsecured creditors, b. Wage garnishments will stop, c. Lawsuits against the debtor by his/her creditors will be stopped. It’s important to understand that it isn’t free to declare bankruptcy. Even though they’re already in debt, the individual will be required to make monthly payments to help cover some of the debt costs as well as the fees for the trustee’s work. Anyone considering bankruptcy should get a clear understanding of what fees will be charged and what monthly payment will be required.

The trustee sells the debtor’s assets, except those exempted by provincial and federal laws 12, and holds the proceeds in trust for distribution to the creditors. This includes all existing assets as well as those acquired prior to the discharge of the bankruptcy13. a. assets assigned to the trustee. b. During the bankruptcy, the debtor is also required to make payments to the trustee for distribution to the creditors. The fee is determined by the trustee taking into account the debtor’s total income, income standards issued by OSB, and debtor’s personal and family situation14.

4) may be a meeting of creditors which the debtor is required to attend. Creditors’ meetings are not common for low or no income bankruptcies, but they remain a possibility. The purpose of the meeting is to: a. Allow creditors to obtain information about the bankruptcy,

Each debtor’s situation may vary, a trustee will be best able to advise.

s. 158 of the Bankruptcy and Insolvency Act states that the debtor has a duty to disclose to the trustee all property disposed of within a period starting 12 months prior to the date of the initial

bankruptcy. Furthermore, the debtor must disclose all property disposed of by gift or settlement without adequate valuable consideration within the period beginning 5 years before the date of the initial bankruptcy event and ending on the date of bankruptcy. 14 The costs of bankruptcy are discussed in the next section.

22 26

c. your estate, d. Allow creditors to give directions to the trustee. 5) by a representative of OSB. The purpose of the examination is to question the bankrupt about his/her conduct, the causes of the bankruptcy and the disposition of debtor’s property.

Legal Assistance To Reduce Debt 6)

The debtor then attends 2 counselling sessions to help him/her discover and understand the causes of his/her bankruptcy. These sessions will also provide information to assist the debtor in counselling sessions are typically provided by the trustee; in reality they vary widely in quality and content. a. with information concerning money management, spending obtaining and using credit. b. In the second session, the counsellor will help the debtor discover and understand the causes of his/her insolvency or bankruptcy, and will assist in establishing a rehabilitation plan.

The trustee prepares a report to the OSB describing the debtor’s actions during the bankruptcy. In certain circumstances, the trustee prepares a report regarding the debtor’s application for discharge. This report a. b. The causes of the bankruptcy, c. The manner in which the debtor performed his/her duties under the Bankruptcy and Insolvency Act, d. Debtor’s conduct before and after the bankruptcy, e. Whether the debtor was convicted of any offence under the Bankruptcy and Insolvency Act (sections 198 to 208), f.

Any other facts that could justify the Court refusing to debtor’s discharge.

8) bankruptcy if the following conditions are met: a. payments from surplus income are not required (see (d) below), automatic discharge takes place 24 months after the date of the bankruptcy. b. The discharge is not opposed by the OSB, the trustee or a creditor15. c. Debtor did not refuse or neglect to receive counselling. d. Debtor is not required to pay a portion of his/her surplus income into the bankruptcy estate as per the standard established by the OSB. If the debtor is required to make surplus payments16, he/she will be eligible for an automatic discharge after contributing part of the surplus to the estate for 21 months. Second-time bankrupts with surplus income are required to contribute part of the surplus

15 Opposition to discharge occurs in less than 14% of cases and can occur for example where there are personal issues, a perception of fraud or dishonesty, or the trustee hasn’t been paid. 16

See the section on Cost of Bankruptcy

23 27

Legal Assistance To Reduce Debt to their estate for 36 months, after which they are eligible for an automatic discharge. trustee in bankruptcy, he/she may be eligible for the Bankruptcy Assistance Program which is designed to facilitate access to bankruptcy trustees. To be eligible the debtor must have contacted at least two trustees who participate in the Bankruptcy Assistance Program and tried to obtain their services, is not involved in commercial activities; and is not in jail. If the contact OSB at 1-877-376-9902 (toll free) and they will send the debtor information and a list of trustees who participate in the program. Furthermore, if the debtor is having a problem with his/her trustee, he/she should contact OSB at the same toll free number and they will investigate the complaint.

For those who have been bankrupt before, or who do not qualify for an automatic discharge, the trustee will apply to the Court for an appointment to hear the application for discharge. Debtor attends the discharge hearing. At the hearing, the trusteeâ&#x20AC;&#x2122;s report is used to inform the Court of the circumstances surrounding the debtorâ&#x20AC;&#x2122;s bankruptcy. The Court will choose one of the following discharge alternatives: a. Absolute discharge: debtor will be released from the obligation to except for certain types of debts that are excluded (see Step 10). b. Conditional discharge: conditions prior to obtaining absolute discharge. Typically, the debtor will be required to pay a certain amount of money, possibly over time. However, the Court may impose other types of conditions as well. Once the conditions are met, an absolute discharge will be granted. c. Suspended discharge: this is an absolute discharge that does not take effect until a future date. d. Discharge refused: the Court has the right to refuse a discharge.

10) The bankruptcy is discharged. The debtor is released from the legal obligation to repay the debts he/she had at the date of bankruptcy, except for certain types of debts that are excluded: a. Alimony payments and spousal or child support. b. Student loans, if it is less than seven years since the debtor years of not being a full- or part-time student the debtor can make an application for release from his/her student loans on the basis of hardship17. c. damages in respect of an assault). d. Debt arising from fraud or misleading representation.

The Court will only discharge the student loan

faith in connection with the obligation to repay the student loans, and that the debtor experienced, these debts. The Courts also look at how debtors used student loan money, their efforts to complete their educational program, their efforts to repay the loans and their use of available interest-relief programs when considering the question of good faith.

24 28

Cost of Bankruptcy They are: 1)

Monthly contributions mentioned in step 3b. above. The debtor is required to make a minimum contribution to his/her bankruptcy for each month during the bankruptcy. This contribution covers administrative costs such as government

Legal Assistance To Reduce Debt fees, trustee’s time, mailing, etc. This fee is typically up to $190 per month, although this cost may increase if there are unusual complexities in the debtor’s circumstances. The trustee determines the fee by taking into account the debtor’s total income and expenses, income standards issued by OSB, and debtor’s personal and family situation (such as family size and assets). 2)

Here’s how social service providers can help people who are considering bankruptcy: • Remind debtors that they can choose a trustee. They may want to shop around or negotiate fees. As the “customer” in this process, they are not powerless.

Surplus income payments mentioned in step 8)d. above. The government has set net monthly income thresholds, for a person or a family, to maintain a reasonable standard of living in Canada. Every dollar that a bankrupt makes above this income threshold is subject to a surplus income payment of 50%. Each month the debtor is required to send the trustee a copy of his/her paystubs so the trustee can calculate debtor’s net income and determine if any surplus income payments are required, and if so, how much they will be18.

• If the cost of bankruptcy is an obstacle, refer them to OSB to ask about the Bankruptcy Assistance Program. It is generally not advertised but can be a great help to low-income people.

All assets surrendered when the debtor goes bankrupt.

Note on Credit Rating Usually when the debt reaches the point where bankruptcy is required, the debtor’s credit rating is already poor. A person who declares bankruptcy is assigned the lowest possible credit rating score (R9). In Ontario, information that affects the credit score is usually removed from a TransUnion credit report 7 years after discharge and from an Equifax credit report 6 years after discharge19. To ensure that the credit record is updated, the debtor should send a copy of the discharge order to the major credit-reporting agencies (such as the two mentioned above). It is also important to keep all documents relating to the bankruptcy for reference by future lenders.

For information on how the trustee calculates

Bankruptcy, online: <http://www.ic.gc.ca/eic/site/ bsf-osb.nsf/eng/br02566.html>. 19 For more information on credit reports and credit scores see Financial Consumer Agency of Canada, online: <http://www.fcac-acfc.gc.ca/eng/ resources/publications/budgetMoneyMgmt/ CreditReportScore/PDF/CreditReportScore-eng.pdf>.

25 29

WoodGreen WoodGreen Community Services Community Service WoodGreen Community Services

No No Action Action Towards Towards Reducing Reducing Debt

No Action Towards Reducing Debt 11. .

Ignore/Disregard Ignore/Disregard Collection Calls Collection ........................................................................................ Calls ......................................... 32 (professional (professional education education and advice on dealing and advice with debt) on dealing with debt)

ADVANTAGES ADVANTAGES DISADVANTAGES MOST SUITABLE FOR DISADVANTAGES

-- Debtor Debtor may may be freedbe of afreed lot of stress of a lot of -stress - Debtor doesn’t currently need “good” Interest may continue to - accrue Interest as debts may continue to accrue as debts related related to theto idea the of needing idea of to make needing toare make credit unpaid are unpaid debt debt payments payments - Household is onproceedings, very low income, so - Collectors can begin legal - proceedings, Collectors can begin legal -- Limited Limited income income can go towards can more go towardspossibly moreresulting in a judgement meeting needs is a priority/struggle possibly for resulting in abasic judgement for urgent urgent needsneeds (food, shelter, (food, clothing, shelter, etc.) clothing, etc.) which can lead monies owed, monies to owed, -which can lead to Bankruptcy is too complicated/stressful, 1 garnishments1 or debtor feels that the amount owed -- Debts Debts will will “age off” “age creditoff” report credit if reportgarnishments if

Ignore/Disregard Collection Calls ........................................................................................ 32 (professional education and advice on dealing with debt)

collectors collectors take no take actionno for 6action years for 6 years

doesn’t warrant bankruptcy

ADVANTAGES

DISADVANTAGES

MOST SUITABLE FOR

- Debtor may be freed of a lot of stress related to the idea of needing to make debt payments

- Interest may continue to accrue as debts are unpaid

- Debtor doesn’t currently need “good” credit

- Collectors can begin legal proceedings, possibly resulting in a judgement for monies owed, which can lead to garnishments1

- Household is on very low income, so meeting basic needs is a priority/struggle

- Limited income can go towards more urgent needs (food, shelter, clothing, etc.) - Debts will “age off” credit report if collectors take no action for 6 years

- Bankruptcy is too complicated/stressful, or debtor feels that the amount owed doesn’t warrant bankruptcy

1 1

Very Very low-income low-income individuals individuals may in fact be “judgement may in proof”, fact be meaning “judgement that even if aproof”, meaning that even if a judgement judgement is ordered, is ordered, their lack oftheir funds makes lack their of funds income exempt makes from their garnishment. income exempt from garnishment. If/when If/when the income the income increases, however, increases, garnishments however, may begin. garnishments See note 20. may begin. See note 20.

Action Towards Reducing No Action Debt Towards Reducing No Action Debt Towards Reducing No Ac D

Waiting To RespondWaiting To To Respond Waiting To To Respo Debts will only “disappear” from Debts will only “disappear”Efforts from Debts will only “disappear” from Collection Efforts Collection Collection Efforts a credit report after 6 to 7 years a credit report after 6 to 7 years a credit report after 6 to 7 years (in Ontario – timelines vary in

(in Ontario – timelines vary in

other provinces) no activity. other provinces) ofhave no activity. other provinces) of many no activity. The strategy thatof many debtors may already The unknowingly strategy that many debtors may already The unknowingly strategy that have debtors may al Actions including making a partial Actions including making a partial Actions including making a to partial undertaken is the option to do nothing in response undertaken to collectors’ is the option efforts. to doAnothing inundertaken response toiscollectors’ the option efforts. do nothing A payment of the debt or written payment of the debt or written payment of the debt or written debtor can decide to ignore collection calls,debtor though can certainly decide to this ignore has some collection calls, debtor though cancertainly decide tothis ignore hascollection some

correspondence acknowledging the correspondence acknowledging the correspondence acknowledging the debt will count as “activity” and debt will count as “activity” and debt will count as “activity” and Note that this a strategy to employ Note that as they this is atostrategy manage forisdebtors to employ Notere-start that as this they istry a strategy to manage for is debtors t will re-start theistime until a for debtdebtors is will re-start thetry time until a debt will the time until a debt their debts, butthe ignoring collector’s their letters debts, willbut notignoring present collector’s a The calls and their letters debts, will but not ignoring present collector’s a The cal removed from credit report. The calls and removed from the credit report. removed from the credit report. solution to the underlying solution the tocalled debts the underlying won’t go away debt problem,FCAC solution because to the the debts underlying won’t goand debt away proble FCAC guide called “Knowingdebt and problem, because FCAC guide “Knowing and guide called “Knowing for several years,your if atCredit all. ItScore” may, however,Understanding for help several reduceyears, unnecessary ifCredit at all.Score” It stress may, however, forhelp several reduce years, unnecessary if Credit at all. Score” It may, stress howe Understanding your Understanding your provides good about provides good information about provides good information and anxiety oninformation the debtor’s part to truly understand and anxiety what on can the debtor’s and what part to truly understand and anxiety what on the can debtor’s andabout what part to trul this. this. this. cannot be done to them in response to an unpaid cannotdebt. be done to them in response to ancannot unpaidbe debt. done to them in response to

(http://www.fcac-acfc.gc.ca/ (http://www.fcac-acfc.gc.ca/ (http://www.fcac-acfc.gc.ca/ eng/resources/publications/ eng/resources/publications/ eng/resources/publications/ Ifbudgetmoneymgmt/ a debtor ignores collectors’ calls, letters, and If a messages: debtor ignores collectors’ calls, letters,budgetmoneymgmt/ Ifand a debtor messages: ignores collectors’ calls, lette budgetmoneymgmt/ creditreportscore/PDF/ creditreportscore/PDF/ creditreportscore/PDF/ • • • CreditReportScore-eng.pdf) CreditReportScore-eng.pdf) collectors will not cease their efforts to collect collectors on the will debt.not Debtors cease their efforts CreditReportScore-eng.pdf) to collect collectors on the will debt. notDebtors cease their effo

A collector still has the right to phone calls and A collector has theto right to collector still has the to the may continue to receive correspondence may still continue about receive the phone callsAand may correspondence continue toright about receive phone ca collect even after a debt has aged off collect even after a debt has aged off collect even after a debt has aged off debt. debt. debt. the credit report, but the debt will no the credit report, but the debt will no the credit report, but the debt will no debtor may be willing to ignore theseon messages. a debtor may be willinglonger to ignore However, these a debtor be will longerHowever, be listed onathe credit report. longer beHowever, listed the credit report. be listed onmessages. the credit may report. Debtors are not required to respond to collectors’ Debtors calls. are not required to respond to collectors’ Debtors calls. are not required Thus, the information would no Thus, the information would no Thus, the information would no to resp longer be publicly visible. longer be publicly visible. longer be publicly visible.

• Damage to credit history and score: while• debts Damage remain to credit outstanding, history and score: while • Damage debts remain to credit outstanding, history and scor

to access new credit.

However, many people struggling with debt However, have neither manythe people struggling with debt However, have neither many people the struggl need for, nor the interest in, gaining new credit needin for, the nor short the interest term. in, gaining newneed creditfor, in nor the short the interest term. in, gai

If an individual is unable to take If an individual is unable to take If an individual is unable to take any action on debt repayment any action on debt repayment any action on debt repayment and is waiting to respond, it may and is waiting to respond, it may and is waiting to respond, it may • Costs may continue to accrue: collectors may • Costs continue may continue to add interest to accrue: collectors •may Costscontinue may continue to add to interest accrue: coll nevertheless be advisable to nevertheless be advisable to nevertheless be advisable to charges on outstanding debts. The amount charges owed may on outstanding increase, debts. The amount charges owed on may outstanding increase, communicate with creditors. If communicate with creditors. If communicate with creditors. If debts. Th

sometimes substantially, until the debt is paid. sometimes substantially, until the debt issometimes paid. substantially, until the

hardship, they may or limit they maythe delay or limit hardship, they mayfor delay or limit However, fordelay people living on veryhardship, limitedHowever, incomes, for people amount living on very limited However, incomes, the people amount living on v their collection efforts. Open their collection efforts. Open their collection efforts. Open owing may already be unmanageable. When owing individuals may already cannot be unmanageable. When owingindividuals may already cannot be unmana communication alsoneeds help because theycommunication can also help communication can also help meet theircan basic are allocating meet their money basic towards needs because they are allocating meet their money basic needs towards because demonstrate a debtor’s good faith demonstrate a debtor’s good faith demonstrate a debtor’s good faith debt repayment, they may choose to ignoredebt the repayment, increasing balances they may choose to ignore debt the repayment, increasingthey balances may choo intention to repay in the future. intention to repay in the future. intention to repay in the future.

in order to address their more urgent needs.in order to address their more urgent needs. in order to address their more u

gAction Debt Towards Reducing No Action Debt Towards Reducing No Action Debt Towards Reducing D

An unpaid account will be reported An unpaid account will be reported An unpaid account will be reported to credit bureaus (the companies to credit bureaus (the companies to credit bureaus (the companies that produce credit reports) as that produce credit reports) as that produce credit reports) as defaulted or a “bad debt”. It will defaulted or a “bad debt”. It will defaulted or a “bad debt”. It will show a credit rating of the worst show a credit rating ofa9,bank the worst show a credit of 9,can the worst n unpaid •credit Money card owed or loan to9,acan bank from an unpaid • credit Money card owed or loan to can from an unpaid credit cardrating or loan possible. This will hurt the debtor’s possible. This will hurt the debtor’s possible. This will hurt the at that bank be through taken from theanother Right toaccount at that bank be taken through from the another Right to account at that bank through the Rightdebtor’s to ability to access credit (get a ability to access credit (get a ability to access credit (get a creditloan card or loan). It may credit card or loan). It may also vary by account creditorcard or loan). It may also by account or bank. agreement andalso can vary by account loan or bank. agreement and can bank. impact his ability to rent an impact his ability to rent an impact his ability to rent an e people maintain However, littlemany many or nolandlords balance low-income people maintain However, littlemany or nolandlords low-income balance people maintain since little many or no landlords balance apartment, since apartment, since many apartment, may have no money at their available bank anyway, to be and may have no at money their bank available anyway, to be and may have no money available be to check credit and may not want to check credit and may not want to check credit and may not to want who know they seized. owe money Sometimes, to one people bank who know they seized. owe Sometimes, money to one people bank who know they owe money to one rent to someone with accounts rated rent to someone with accounts rated rent to someone with accountsbank rated hold “9”. their savings may“bad have or credit” chequing already to hold “9”. their savings may “bad have orcredit” chequing already chosen savings“bad or chequing Having maychosen also Having may also to hold their “9”. Having credit” may also accountsemployability at another bank. another bank. limit a person’s limit aaccounts person’sat employability limit a person’s employability many employers check credit as part

many employers check credit as part

over amounts • Debtors owed: may creditors be taken have to court over amounts • Debtors owed: may creditors be taken have to court over amounts owed: creditors have of their hiring process. Whenever a of their hiring process. Whenever a of their hiring process. Whenever a d maydebtor access the the right legal to collect system on to debts, and may access the right the legal to collect system on to debts, and maydebtor accessisthe legal system to is considering not responding debtor is considering not responding considering not responding lect a to debt, do and so.a judge A creditor may can determine sue to collect a to debt, doand so. aAjudge creditor may determine sue to collect a debt, and a judge may determine collection efforts, it’s important collection efforts, it’s can important to collection efforts, it’s important g in athat judgement that the against claim is the valid, debtor resulting in a judgement that the against claim is the valid, debtor resulting in a judgement against the debtor he is aware of what the effects that he is aware of what the effects that he is aware of what the effects r’s credit report. that will Judgements be listed on may the debtor’s credit report. that will Judgements be listed on may the debtor’s credit report. Judgements may might be, and makes an educated might be, and makes an educated might be, and makes an educated ebtor’s income, result and in garnishments cantomean the debtor’s income, result in and garnishments cantomean to up the debtor’schoice income, andwhat can to mean choice about what do. thattoup choice about what do. that about do. that up aken . to 50% of a person’s income is taken . to 50% of a person’s income is taken .

may still be unable A very tolow-income pay. An debtor may still be unable A veryto low-income pay. An debtor may still be unable to pay. An come may beindividual deemed “judgement with very low income may be individual deemed “judgement with very low income may be deemed “judgement g that their income proof” ,isessentially too low forindicating that their income proof” , essentially is too low for indicating that their income is too low for he judgementgarnishment. will remain on Inthe this case, the judgement garnishment. will remain on In this the case, the judgement will remain on the me actionablecredit whenrecord and if and the debtor’s may become actionable credit when record and ifand themay debtor’s become actionable when and if the debtor’s income increases. income increases.

their income Many debtors taken before worrythey about gethaving it; their Many income debtors taken worry before about they get having it; their income taken before they get it; debts this cannot is called resultgarnishment. in garnishmentMany debtsthis cannot is called result garnishment. in garnishment Many debts cannot result in garnishment , including without most a court debtsorder owedortojudgement, banks including without most a court debts order owed orto judgement, banks including most debts owed to banks common or credit source card of garnishment companies. The that most common or credit source cardofcompanies. garnishment Thethat most common source of garnishment that debt todoesn’t the government, require a judgement including is debt to doesn’t the government, require a judgement including is debt to the government, including ort payments. student loans, taxes, child student loans, taxes, and child If a low-income person wants to support payments. If a low-income person wants to If a low-income personand wants to support payments.

reduce the amount taken through reduce the amount taken through reduce the amount taken through the Right to Offset, she can contact the Right to Offset, she can contact the Right to Offset, she can contact ctors may Deciding be thetoonly waitoption to respond for many to collectorsDeciding may be the to wait only to option respond for many to collectors may be the only option for many the relevant branch manager and the relevant branch manager and the relevant branch manager and ons. When debtors, working but it does withhave debtors repercussions. to When debtors, working but it does with have debtors repercussions. to When working with debtors to ask to negotiate an arrangement, but ask to negotiate an arrangement, but ask to negotiate an arrangement, but workers assess can inform their options, them that social it is services workers assess can their inform options, them social that it services is workers can inform them that is any agreement is at the bank’s any agreement is at theitbank’s any agreement is at the bank’s ion efforts, within buttheir ensure rights that tothey ignore arecollection efforts, within but their ensure rights that to ignore they are collection efforts, but ensure are discretion. Even very low-income discretion. Eventhat verythey low-income discretion. Even very low-income dvantages aware of of this both strategy. advantages and disadvantages aware of of this both strategy. advantages and disadvantages of this strategy. people can have assets seized this people can have assets seized this people can have assets seized this way. way. way.

WoodGreen Community WoodGreen Community ServicesServices

WoodGreen Community Services

on Conclusion

Conclusion

ers, it’s As social important services to workers, helpit’s our important clientstoknow help our the clients know the nd cannot truth about happen what can toand them. cannot Many happen people to them.suffer Many people suffer y and through stressserious over their anxietydebts, and stress when over their in fact debts, there whenare in fact there are

tors to facts make can empower better choices debtors to about make better how choices to respond about how toto respond to their debts.

As social services workers, it’s important to help our clients know the ted on People cannot grounds be deported owing on themoney. grounds of them. owing Many money.people suffer truththe about what canofand cannot happen to moved Children from serious cannot their parents be removed because from ofparents debt. because of in debt. through anxiety and stresstheir over their debts, when fact there are

n jail…another People cannotcrime, be put inor jail…another did not pay crime, when or didgiven not payawhen given a Court Order to do so.

facts can empower debtors to make better choices about how to respond to their debts. debtors not be In Ontario, evicted simply cannot because be evicted of unpaid simply because debts, of unpaid as debts, as

long as their rent is paid.

People cannot besocial deported on the grounds of owing ver pleasant, Dealing withbut debt is neverservice pleasant, providers but social service canmoney. help providers can help ocess people withnavigate an eyethis towards process with reducing an eye towards the negative reducing the negative the client’s impact overall improving the client’s of life. overall qualitybecause of life. Equipping Childrenand cannot bequality removed from theirEquipping parents of debt. nowledge ourselves will withhelp betterus knowledge to helpwill more helppeople. us to help more people.

People cannot be put in jail…another crime, or did not pay when given a Court Order to do so. In Ontario, debtors cannot be evicted simply because of unpaid debts, as long as their rent is paid. Dealing with debt is never pleasant, but social service providers can help people navigate this process with an eye towards reducing the negative impact and improving the client’s overall quality of life. Equipping ourselves with better knowledge will help us to help more people. 29 35 35

Notes

30 36

Notes

31 37