groupeserponemontreal

[groupeserponemontreal]

How to consolidate debt?

Have you accumulated a lot of debt and no longer know where to turn? Are you on the verge of bankruptcy and can no longer manage your finances? Before declaring bankruptcy, consider all of the options available to you, including debt consolidation which could be the ideal solution.

Consolidating your debts is getting a one-time loan to pay off most or all of your debts, ultimately giving you peace of mind and getting back to normal. If you choose this alternative, you will be able to pay a more affordable monthly amount to a single creditor thanks to lower interest rates. There are various types of consolidation loans that vary depending on your situation and that have different requirements depending on the lending financial institution.

What is debt consolidation?

Debt consolidation is a financial transaction that involves borrowing a new loan from a financial institution in order to pay off the majority or all of your debts and repay a single creditor. This debt relief solution covers credit card balances, lines of credit, overdrafts and consumer loans without including secured loans (auto and mortgage).

Combining your debts allows you to benefit from lower interest rates without really changing the total amount to be paid. It makes it easier to manage your payments since you have a single monthly payment to make on a given date rather than several on different days of the month. This solution guarantees better financial management that can be spread over five years.

However, consolidating your debts remains a solution of last resort and is subject to certain requirements:

A stable income that guarantees your ability to repay your monthly debt.

A good credit score without too many late payments or a history marred by credit accounts in collection.

A debt ratio of less than 40%

Collateral is usually required and unsecured loans come in smaller amounts.

Having assets works in your favor.

Steps of the debt consolidation process

1. Meeting with a Licensed Insolvency Trustee (LIT)

This is a key step in this process that allows you to get a professional assessment of your financial situation. A consultation with an insolvency trustee allows you to analyze the various financial solutions available to you and guide you towards the best option. With Groupe Serpone, you benefit from a free initial consultation.

2. Establishment of a new budget

Once you have established a list of your creditors, you need to calculate your debt ratio and determine the amount of the loan you have to request to repay all your debts. This is an important step to determine the new monthly payment due and to verify your eligibility for debt consolidation. Once you have the necessary information, you will be able to determine your new budget (loan payment, lifestyle, bills …) which will help you determine if you can honor the required monthly payments.

3. Choice of a financial institution

Your insolvency trustee will take care of finding a financial institution that will agree to grant you a consolidation loan. Several factors will be taken into consideration, including your credit rating and the stability of your income, to determine whether or not you are eligible for debt consolidation.

4. Payment to creditors with the consolidation loan

If the loan is granted, it will be used to pay off your creditors. You will have a single creditor and one payment to make per month.

5. Repayment of the consolidation loan

You have to reimburse the financial institution that granted you the loan according to the new terms required. You will have a new payment to make monthly with lower interest rates and over a period of up to five years. Once these steps are completed, you will finally be free of your debt.

The Benefits of Debt Consolidation

Consolidating your debts allows you to benefit from various advantages:

Better and simpler financial management, because you only have one amount to pay at the end of the month.

Lower interest rates and therefore the possibility of saving in the long term.

A good credit rating if you pay on time.

Applying for debt consolidation is free.

Repayment of the majority or all of your debts in 5 years.

The ability to use your assets to get better interest rates.

Different ways to consolidate your debts

There are various ways to consolidate your debt depending on your financial situation and the types of debt you have!

1. Debt Consolidation Through Credit Cards

This is a balance transfer, which consists of replacing your old credit cards with new cards with a lower interest rate. You can benefit from a low introductory rate for a period defined by the bank. A good credit rating and a stable income are generally required. However, once the period is over, interest rates may rise and you may fall back to square one.

2. Debt consolidation with a personal loan

This method depends on your income and your credit rating. The interest rates for an unsecured loan remain very high compared to secured loans. You must have a low debt ratio to get approved for this loan.

3. Loan secured by personal assets

When your debt ratio is very high relative to your income, you can resort to a secured debt consolidation loan. You therefore use one or more of the valuable assets that you own such as valuables, a vehicle, collectibles, jewelry or even paintings that will be offered as collateral. This type of loan can also generate high interest rates.

4. Debt consolidation using a second mortgage or refinancing

If you are a homeowner, you can consolidate your debt by opting for refinancing or a home equity line of credit. This method is more risky. There is also the option of using reverse mortgages which are available to Canadian homeowners aged 55 or older. The factors taken into consideration by this type of loan are the equity in your property, your age and the location of your residence. You can access this solution even if you have a low income and bad credit rating.

Is Debt Consolidation Right For You?

If you have a lot of debt that has become unmanageable over time, but you have a stable income and a previously well-maintained credit rating, then debt consolidation is a viable option. However, you should always keep in mind that this transaction excludes mortgages and generally requires collateral such as the equity of your house or car in order to obtain a loan.

Debt consolidation requires good discipline, because late payments are very poorly tolerated … not to mention the risk of getting into even more debt if you keep your credit cards. It is therefore important to repay the new loan on time and not take on new debt that could ruin your credit rating and hamper your financial management.

Know that you run the risk of being turned down if you have too high a debt ratio, an unstable job, a lousy payment history, or no collateral. If this is your case, you should consider other alternatives such as a consumer proposal, which is a negotiation between your licensed insolvency trustee and your creditors. This is a solution provided for by the Bankruptcy and Insolvency Act which also benefits from several advantages:

One monthly payment to your trustee

Reducing the total amount of your debts unlike debt consolidation which does not change the amount owed

No interest

Protection against the risk of seizure of wages or property

Protecting your job

A repayment that can be spread over a period of 5 years

The consumer proposal can allow you to reduce your debt by up to 70%, but it also meets certain criteria:

The total amount of your debt cannot exceed $ 250,000

The minimum debt is $ 1,000

You must have financial problems

Reside or own property in Canada

It is important to specify that the consumer proposal, unlike debt consolidation, appears in your credit report. This note will remain until the end of the proposal and even years after. In addition, if you don’t respect your payment obligations and are late on three payments, the proposal is canceled and your creditors can demand their repayment again on the terms they wish. At this point, it is important to know what to do if the consumer proposal is canceled.

Before starting any procedure, always make sure that the interest rate and payment period suit your lifestyle. Once you’ve set your budget, keep your goals in mind and stay disciplined. If these two alternatives do not match your financial situation, you can consider personal bankruptcy. This is a legal process that aims to make a debtor pay his debts by selling his assets.

We advise you to proceed step by step to make sure you make the right decision:

Calculate your total debt with their interest rates.

Develop a new budget and review your daily expenses.

Try to renegotiate your debts.

Improve Your Credit Rating

Check if you have any valuable assets to sell that can help you alleviate your debt

Use a debt consolidation

Make a consumer proposal

Apply for personal bankruptcy

To support you throughout this procedure and above all to guide you in making the right decisions and in better managing your finances, Groupe Serpone is at your disposal. Our firm of accredited bankruptcy and insolvency trustees is here to help. Our experts will help you find the best solution based on your needs and financial difficulties. We are specialists in debt consolidation, consumer proposal or personal and corporate bankruptcy. Don’t hesitate to get a free consultation!

The post How to consolidate debt? appeared first on Groupe Serpone.

[groupeserponemontreal]

How to improve your credit score?

Your credit score may seem like a simple indicator to you, but it can have a huge impact on your finances. Most people don’t give enough importance to their credit scores. Yet having a good credit rating is essential to apply for a car, student or mortgage loan, as well as for renting an apartment or getting a job that involves managing money. If you aren’t careful with your credit rating, you may have to pay a higher interest rate on a loan or credit card account.

A credit score provides information to your future creditors about your creditworthiness and your ability to manage your money well. If your credit rating is low, you may have difficulty getting a loan and lose a lot of money. Fortunately, you can improve your credit rating by changing your habits and adopting financial optimization strategies. Follow the advice in our article on how to improve your credit rating to regain the trust of your lenders.

What is a credit score?

A credit score is an assessment of an individual or an entity’s credit history and its ability to repay debts. It is a 3-digit number between 300 and 900 that represents the reliability of a moral or physical person to meet its financial obligations. It is calculated through a thorough and detailed analysis of the credit file.

A credit score is usually calculated by an agency specializing in credit scoring, which closely monitors the behavior of individuals regarding the repayment of debts (bank loans, credit cards, lines of credit, etc.). In Canada, Equifax and TransUnion are the two credit reporting agencies.

Some of the factors that make up a credit score are:

Payment history

The age of your accounts

Use of credit (number and type of credit accounts)

Number of creditors

Debts

New credit requests

If you have filed for bankruptcy and when

Banks as well as lending financial institutions use credit scores to determine an individual’s risk if they decide to extend credit or loan. It helps them determine who can get credit and at what rate.

Analysis of your credit file

Before you consider improving your credit rating, you should first know what your credit score is to get a better idea of ​​your credit level. To do this, you can apply to Equifax Canada or TransUnion Canada. You will need two pieces of identification such as your passport and driver’s license.

Your credit report contains a lot of information. In addition to your personal information, the credit report contains information on your various loans and bank accounts, bankruptcies, bad checks or unpaid debts. However, your file does not show your credit rating. You have to pay about $ 25 to get it. Checking your credit report is an opportunity to identify bad habits that could potentially affect your rating and prevent you from getting a loan.

If you find an error in your file and wish to correct it, contact Equifax Canada or TransUnion Canada as soon as possible and support your request with relevant documents such as your bank statement. You can also contact your creditors directly to obtain more recent information and correct the error.

Tips to improve your credit score

Rest assured, your credit score is not permanent. It changes over time depending on your actions. Here are some tips to improve your credit rating:

1. Monitor your payment history

Your payment history is one of the most important factors for your credit rating as it accounts for 35% of your score. To improve your payment history:

Make your payments in full

Paying your bills in full before the deadline is one of the best ways to improve your credit score. If you are one of the people who just pays the minimum credit each month, you need to start doing things differently in order to boost your credit score.

When it comes to credit cards, if you can’t pay the full amount, make sure you pay the minimum amount every month. If you want to avoid this situation, spend what you can repay in the short term.

Make your payments on time

Another way to improve your credit rating is to pay your bills, cards or lines of credit on time – that is, to pay before the deadline, not on the due day. This applies to small and large amounts since any late payments impact your credit rating.

If you have the habit of forgetting to make your payments on time, set your payments automatically on a certain date. Automatic payments can be applied on personal loans, lines of credit, mortgages, student loans, car loans, etc.

Eliminate too small or too many balances

If you want to increase your credit rating and have multiple credit cards, try to keep only one or two, preferably the ones you’ve owned the longest and from major creditors. You can also choose which ones have the lowest interest rate or offer more profits. Pay off the balance of other cards that were not chosen without canceling them, starting with the credit cards with the highest rate.

2. Use credit wisely

This is an essential step to follow to maintain or improve your credit rating. It’s about using your credit smarter and above all not using it all. Creditors have a pejorative view of consumers who overuse or abuse their credit. If possible, you don’t exceed your credit limit and don’t use more than 35% of it. You need to combine all of your credits (credit cards, lines, loans) and only consume 35% of your total credit limit.

For example, if you have a credit card with a limit of $ 1,000, a line of credit of $ 6,000, and a loan with a limit of $ 10,000, try to use only 35% or 5,950 $. If you exceed this limit, lenders deem you a higher risk, even if you pay your full balance before the due date.

3. Increase your credit limit

If you are about to cross 35% of your credit limit, increase your credit limit so that you can continue to use your card without affecting your credit score. This advice only applies to people who are able to control their spending. 

4. Limit your loan requests

Asking for credit once in a while is completely normal. However, making repeated requests for loans suggests that you are in dire need of credit or are trying to live beyond your means, both of which make you at risk and are very bad for your credit rating. Make sure you apply for credit only when you really need it and don’t accept a credit card for promotions or freebies. If you want to apply for credit, do so with different lenders and over a two-week period so that these applications are combined and listed as one credit application on your file.

For example, if you apply for a mortgage loan from three different financial institutions during a two-week period, these applications will be considered one. On the other hand, if you make the requests three months apart, three requests will be counted, which is less advantageous for your score. It is also recommended that you do not make more than three loan requests per year.

5. Vary your types of credit

Your credit rating can be influenced by the types of loans you have. Indeed, if you have only one type of credit (for example a credit card), your rating will be considered lower. It is therefore preferable to vary your types of loans (credit card, mortgage loan, consumer loan, etc.). However, you need to be able to manage these different types of loans and pay them back on time. Focus on lines of credit. This type of permanent credit is easier to manage and generally better for your credit rating.

6. Keep your old accounts open

If you don’t have to change banks, credit cards … don’t. Indeed, it is preferable to keep as long as possible the same accounts or cards that you have. This can show stability and accountability to your lenders. In addition, if your long history shows that you are creditworthy and that you repay your loans diligently, that is a positive point in your favor.

Do you need help alleviating your financial problems?

Don’t know how to get rid of your debt? Groupe Serpone is a firm of accredited bankruptcy and insolvency trustees. Our team specializes in personal and commercial bankruptcy, debt consolidation and consumer proposals. We offer a complete tailor-made service that begins with a financial analysis, followed by negotiations with your creditors to eliminate your debts.

Get a free consultation

The post How to improve your credit score? appeared first on Groupe Serpone.

[groupeserponemontreal]

What to do if my consumer proposal is canceled?

Have your debts become too difficult to manage? The Consumer Proposal is a debt relief solution available to certain people. It’s a negotiation where your Licensed Insolvency Trustee (LIT) comes to an agreement with your creditors regarding the conditions and monthly payments needed to repay your debts. Creditors can accept or decline the offer. If the proposal is accepted, you must meet your payment obligations during the fixed period.

Under the Bankruptcy and Insolvency Act, 3 payment delays automatically cancel your consumer proposal. When this happens, people have to face the cancellation of their consumer proposal and consider alternative options to deal with their financial problems.

What is a consumer proposal?

A Consumer Proposal is a solution under the Bankruptcy and Insolvency Act that involves making a proposal to your creditors in order to settle your debts. Its purpose is to consolidate all of the debtor’s debts into monthly payments and spread the payment period over several years. The proposal is applicable to unsecured debts like credit cards, bills and taxes. It is therefore sent to unsecured creditors.

The proposal allows you to:

Pay off your debts over a period of time that can be up to 5 years

Reduce your debt by up to 70% or more

Reduce the amount payable each month

The main condition to be met in order to be able to file a consumer proposal is that the total amount of your expenses, without including the mortgage on your principal residence, must not exceed $ 250,000.

You must also be insolvent, i.e.:

Have debts of a minimum value of $ 1,000

Reside or own property in Canada

Have financial problems like:

Not being able to pay your debts on the due dates

No longer being able to pay your current bills

The value of all the property you own is less than that of all of your debts combined

What are the steps of a consumer proposal?

The process of a consumer proposal request can be time consuming and requires the presence of a Licensed Insolvency Trustee. Here are the steps of this procedure: 

1. First consultation

You start by meeting with your advisor or LIT to jointly assess your financial situation and explore the different solutions available to you. You will have some documents to sign, then the recovery process can start. Your first consultation with the trustee is free with Groupe Serpone.

Free consultation

2. Submission of the proposal

The LIT is responsible for filing all the necessary documents with the Office of the Superintendent of Bankruptcy (OSB) to begin the process of the consumer proposal.

3. Notice to creditors

Your bankruptcy trustee then informs your creditors. The latter will then deal with him. They will therefore no longer be able to harass you and constantly call you.

4. Acceptance or refusal of the proposal

Your creditors have 45 days to accept or reject the proposal. They may request a meeting of creditors to discuss your proposal with your LIT. For a meeting to take place, at least 25% of all creditors must request it, otherwise your proposal is considered accepted.

5. Meetings with your Licensed Insolvency Trustee

You will have to participate in two consultation meetings. During these, your bankruptcy trustee will give you advice on how to maintain good financial health and analyze your financial habits. He will give you tools and techniques to make sure you don’t have to fall back into this predicament again. During the second meeting, you will receive further advice that will help you better plan your future and manage your budget to avoid falling back into debt.

6. Approval of the proposal

If your creditors have not requested a review within 15 days of accepting your proposal, your request is approved by the court.

7. Debt release

Once all the necessary payments established in your consumer proposal have been made, your Licensed Insolvency Trustee issues a certificate and releases you from your debts.

What cancels a consumer proposal?

There are two major reasons for a consumer proposal to be canceled. The first and most common reason is late payment. If you have a 3-month delay in payment, your consumer proposal will be automatically canceled.

The second reason is related to the court. The latter has the right to intervene in the acceptance or rejection of the consumer proposal if certain conditions have not been met. This is rather rare because the court hardly ever intervenes. 

What are the consequences of a consumer proposal annulment?

The consequences of a consumer proposal annulment can be severe. First, you will immediately lose the amount of money that was sent to your creditors. Any debt that has already been paid off during the proposal period will no longer count and you will have to start all over again.

Second, all interest charges, bills, and penalties that were included in the proposal will come back again as if you had never filed a proposal. Third, the cancellation of the offer affects your credit report. This will remain in your file for 6 years. Ultimately, when a consumer proposal is canceled, it will then be difficult, if not impossible, to make another.

Consumer proposal annulment: what are your options?

According to the Bankruptcy and Insolvency Act, an automatic cancellation of your consumer proposal occurs immediately if you are 3 months in arrears. If this is your case, the following options are available to you:

1. Ask your Bankruptcy Trustee to reinstate the proposal

You can turn to your Licensed Insolvency Trustee who can help you reinstate your consumer proposal. In order for your trustee to be able to help you, you must be able to demonstrate within 30 days of the cancellation that you are able to remedy your fault. To reinstate your consumer proposal, your LIT may ask you to pay the missing amount in full.

Please note that your creditors will be notified directly after you cancel your consumer proposal. They can object to the reinstatement of the proposal within 60 days of the cancellation.

2. Ask the Court to reinstate the proposal

If you miss the 30-day deadline after cancellation, you can ask the court to reinstate the proposal. This type of request is quite complex, it is advisable to consult your trustee to complete the request without risk of refusal.

If you can explain the reasons for your late payment and ensure that you are able to pay everything on time, the odds could be on your side.

3. Declare bankruptcy

If it proves impossible to reinstate your consumer proposal, you can consider personal bankruptcy to regain your creditor protection and eliminate the majority of your debts. Before proceeding with your bankruptcy application, it is advisable to consult your Licensed Insolvency Trustee in order to analyze your financial situation in detail and verify if this is the best solution.

4. Request permission to submit a new proposal

You can go to court for permission to file a new consumer proposal if you need extra time to pay off the late debts. However, be sure to consult your trustee to see with him if this option is viable in your case.

5. Negotiate with your creditors

Following the cancellation of your consumer proposal, your protection against creditors will cease and they will be able to contact you to claim the amounts owed to them. Be aware that your debts can potentially include retroactive interest following the filing of your proposal.

Negotiating with creditors is possible, but difficult. Good negotiation will allow you to reduce the amount of debt, extend the repayment period, or reduce interest rates. This approach is tricky, however, because your creditors are not related to each other, so it can be time consuming.

Need the advice of an insolvency expert?

How to avoid a consumer proposal annulment?

Do you risk not being able to meet the payment terms of your consumer proposal due to a change in your personal or professional life? Here are some options to consider in order to prevent the cancellation of your consumer proposal:

Assess your financial situation

It is always advisable to consult a licensed insolvency trustee to assess your financial health and determine the solution that best suits your needs and your reality. This way, you are sure to choose the best debt relief solution.

Modify your consumer proposal

If you are no longer able to make your payments on a regular basis, you can talk to your trustee to change the terms of your proposal and prevent it from being canceled. If ever there is a significant change in your life that affects your income, be sure to contact your trustee as soon as possible in order to find a solution. Remember that you can only miss two payments, the third will automatically cancel your proposal.

Reimburse your consumer proposal

You can take out a loan from a financial institution to pay off your consumer proposal faster. This option has its advantages and disadvantages. Getting a loan gives you more flexibility to repay your payments and allows you to avoid having your proposal canceled. In addition, if you meet your payment obligations you will be able to erase the note from your credit report, which could otherwise be there for 8 years. If you pay on time, you can improve your credit rating. Therefore, you will be able to get a mortgage right after paying off all of your debts.

Be aware, however, that this option can also have drawbacks:

More interest charges and debt to pay: You will have to pay more interest charges and there is a risk that you will incur more debt.

Loan Application Rejection Risk: Applying for a loan with a consumer proposal can be a daunting task. Each refused loan application will result in an additional negative note in your credit report.

You find yourself in a complex financial situation and you don’t know what to do? Our team of bankruptcy and insolvency experts offers you a range of personalized services tailored to your needs. Please do not hesitate to contact us for a free consultation.

The post What to do if my consumer proposal is canceled? appeared first on Groupe Serpone.

[groupeserponemontreal]

How long does a bankruptcy stay on your credit report?

Bankruptcy is not a synonym of failure. On the contrary, personal bankruptcy or a consumer proposal can be the perfect solution to take back control of your life. If you’re struggling financially and considering bankruptcy, it’s important to educate yourself and get all the information you need before you jump in.

Most people who consider personal bankruptcy ask themselves the same question: How long does a bankruptcy stay on the credit report? Be aware that the answer to this question may vary depending on several factors that we detail in this article.

Bankruptcy and its effect on your credit report in Canada

In Canada, Equifax and TransUnion are the two credit bureaus responsible for managing your credit file. They keep your credit history as well as all the information related to your credit rating. This includes documents sent by your creditors (payment deadlines, statement of accounts, credit applications, etc.) as well as public records (consumer proposal, collection, bankruptcy, etc.).

What is a credit score?

The credit score determines the ability of an individual or a business to repay debts. it  is a number (usually between 300 and 900) that represents the credit risk or the likelihood that bills will be paid on time. Credit bureaus (Equifax and TransUnion) use this scale to analyze your financial reputation.

Your credit score is calculated based on the information in your credit report such as your credit history, payment terms, debts, etc. Here are the credit score ranges:

300-579: Mediocre

580-669: Medium

670-739: Good

740-799: Very good

800-850: Excellent

In Canada, the most common credit ratings are “R” ratings, which refer to revolving credit. This evaluation is done on a scale from 1 to 9 with a letter appearing in front of the evaluator number. The letter describes the type of account listed on your credit report. In this case, the letter used is the letter R which represents revolving credit (ex: credit cards).

The rating is displayed like this:

R0: Too recent to be rated; allowed, but not used.

R1: Pays (or has paid) within 30 days of the due date or no more than one late payment.

R2: Pays (or has paid) within 30 days of the due date or no more than 60 days or two late payments.

R3: Pays (or has paid) within 60 days of the due date or no more than 90 days or three late payments.

R4: Pays (or has paid) within 90 days of the due date or no more than 120 days or four late payments.

R5: Account is still at least 120 days late, but not ranked 9.

R6: This rating does not exist.

R7: Make regular payments under a special agreement to settle debts.

R8: Repossession (voluntary or involuntary, return of the goods).

R9: Bad debt, placed in collection; moved without giving a new address or bankruptcy.

One of these codes consisting of a letter and a number will be assigned to your credit report depending on how you are paying your debts.

What happens to your credit score after you declare bankruptcy?

Personal bankruptcy will most likely drop your credit score to the lowest possible rating at most Canadian credit bureaus (Equifax and TransUnion). After going bankrupt, your credit rating will be updated to R9.

Your credit score is used by creditors and lenders to determine your creditworthiness. The lower your score, the less likely you are to get credit. It can range from a credit card to a personal loan or a mortgage.

How long do bankruptcies stay on your credit report?

Bankruptcies remain on your credit report for up to six years after the date of discharge in the event of a first bankruptcy. This period, however, can be extended to 14 years in the event of a second or third bankruptcy.

How do you rebuild your credit after bankruptcy?

Is it possible to increase my credit rating after declaring bankruptcy? Yes, absolutely! In fact, improving your credit rating is probably a priority for you as soon as you release your bankruptcy. While there is no magic formula, adopting good credit behavior can help you achieve this goal.

Get a free confidential consultation

Tips to improve your credit rating after bankruptcy

Pay your bills on time

Try to avoid payment delays (telephone, electricity, cable bills, etc.) 

Change your habits

To improve your ratings, it’s important to change your spending habits. Don’t go overboard with your purchases and pay your bills on time. Try to keep your credit cards at 35% of their limit.

Apply for a secured credit card

If you still can’t get a credit card, you can opt for a secured card. The principle of these cards is to deposit funds in advance which will constitute a guarantee for the lender. Once you have built a good payment history, you can request that the warranty be removed and the card used reasonably.

Request a copy of your credit report

Get in touch with the credit bureaus to obtain a copy of your credit report. This will help you better understand your financial situation and analyze your buying habits. Be sure to review your credit report to make sure it is free of errors or inaccurate data.

Consult a Licensed Insolvency Trustee

It is important to be vigilant about the state of your credit report since it can have a significant impact on your financial situation. It is recommended that you consult a bankruptcy trustee so that he can analyze your needs and guide you on the right path. Your trustee accompanies you throughout the whole bankruptcy process and helps you rebuild your credit rating quickly.

An insolvency expert will also give you tips to avoid debt. If you have just released yourself from bankruptcy and need help improving your credit report, you can get a free and confidential consultation or contact us to be put in touch with one of our bankruptcy experts. as soon as possible.

The post How long does a bankruptcy stay on your credit report? appeared first on Groupe Serpone.

[groupeserponemontreal]

Comment faire faillite au Québec?

Les engagements de la vie quotidienne et les imprévus peuvent avoir des impacts négatifs sur votre situation financière. Lorsque les problèmes financiers ne sont pas adressés à temps, certaines personnes se retrouvent en situation de surendettement et ne savent pas comment s’en sortir. 

Il existe différentes solutions (proposition de consommateur, consolidation de dettes, etc.) afin d’éliminer vos problèmes de dettes et de reprendre le contrôle de votre vie pour repartir sur des bases solides. Dans cet article nous explorons une solution possible: la faillite personnelle. Avant de décider de déclarer faillite, il est normal de se poser plusieurs questions. C’est pourquoi nous avons préparé une liste des questions les plus fréquentes pour vous aider à obtenir toute l’information nécessaire sur la faillite personnelle. 

Qu’est-ce qu’une faillite?

La faillite est une processus régi par la Loi sur la faillite et l’insolvabilité qui permet aux individus et aux entreprises de mettre fin à leurs problèmes d’endettement en une courte période de temps. Faire faillite vous permet de vous libérer d’une grande partie de vos dettes par la remise de certains de vos biens. 

On distingue deux types de faillites, volontaire et forcée. La faillite volontaire survient lorsque vous prenez vous-même la décision de faire faillite alors que la faillite forcée survient lorsque vos créanciers vous obligent à le faire. 

Les conditions pour faire faillite au Québec

Il y a plusieurs conditions à respecter pour pouvoir faire faillite au Québec. Pour pouvoir faire faillite, une personne doit:

Avoir des dettes d’une valeur de 1000 $ ou plus

Ne pas déjà être en situation de faillite

Résider ou posséder des biens au Canada

Être dans l’impossibilité de payer ses dettes dans le délai prévu

Ne pas être capable de payer ses factures courantes (solde sur les cartes de crédit, factures d’électricités, etc.) 

Avoir un actif qui est inférieur à son passif, c’est-à-dire que la valeur de tous vos biens est inférieure à la valeur de vos dettes. 

Atteindre la limite d’emprunt et que votre banque ne vous apporte plus d’aide financière supplémentaire.

Si vous vous trouvez dans cette situation, assurez-vous de consulter un syndic autorisé en insolvabilité rapidement afin de déterminer si la faillite personnelle est la meilleure solution pour vous. 

Obtenir une consultation gratuite

Comment faire faillite au Québec? 

Les procédures à suivre pour faire faillite au Québec sont complexes et exigent du temps et de l’expertise. C’est pourquoi il est conseillé de consulter un syndic autorisé en insolvabilité.  

Voici les principales étapes du processus de faillite au Québec:

1. Rencontre avec le syndic

La première étape consiste à rencontrer un syndic afin d’évaluer ensemble vos difficultés financières et d’analyser vos besoins. L’objectif de cette rencontre est de déterminer si la faillite personnelle est la meilleure option pour vous ou si d’autres options conviennent mieux. Il est souvent possible d’éviter la faillite en choisissant d’adopter une option alternative telle que la proposition de consommateur. 

2. Les formulaires

Ensuite, à l’aide du syndic, vous aurez à préparer un bilan détaillant vos dettes et vos biens. Vous devrez également remplir un formulaire pour céder vos biens au syndic et débuter officiellement le processus de faillite. Le syndic se charge de déposer tous les documents auprès du séquestre officiel. Une fois le processus de faillite enclenché, vos créanciers ne pourront plus vous poursuivre.

3. Identification des biens à vendre

Vous allez déterminer avec votre syndic lesquels de vos biens seront vendus pour rembourser vos créanciers. Certains de vos biens sont protégés par la loi, ils ne seront donc pas saisis ou vendus.

Voici ce que vous pouvez conserver: 

Les biens ménagers et personnels qui servent à vos besoins et ceux de votre famille jusqu’à concurrence de 7000 $.

Vos cotisations à un REER ou FERR, sauf celles versées moins de 10 mois avant la faillite.

La valeur de rachat d’une police d’assurance vie, seulement si le bénéficiaire est votre conjoint, votre ascendant ou votre descendant direct.

Des instruments qui sont nécessaires à votre profession ou votre vie quotidienne comme un véhicule ou un ordinateur.

Votre résidence à condition que sa valeur nette soit nulle ou qu’un accord acceptable soit conclu avec le syndic si la valeur nette est raisonnablement faible.

Une partie de votre salaire déterminée par la loi.

Le syndic procédera ensuite à la vente des biens non-protégés. Les montants provenant de cette vente vont être distribués à vos créanciers dans l’ordre saisi par la loi sur la faillite et l’insolvabilité.

4. Avis aux créanciers

Le syndic envoie ensuite un avis de faillite à vos créanciers. Cet avis contient tous les détails concernant la valeur de vos biens et la nature de vos dettes. Dans certains cas, votre syndic peut convoquer une assemblée des créanciers à laquelle vous devrez assister.

5. Interrogatoire au Bureau du surintendant des faillites

Il est possible que le bureau du surintendant des faillites vous invite pour un interrogatoire où on vous posera des questions relatives aux causes de votre faillite ou à certaines dispositions de vos biens.

6. Consultations avec un conseiller en réorganisation financière ou un syndic

Vous devez à assister à deux types de consultations avec un conseiller en réorganisation financière ou un syndic. Durant la première consultation, vous allez recevoir des conseils afin de savoir comment organiser un budget.

Durant la deuxième consultation, votre syndic ou conseiller vous expliquera les causes de votre surendettement et vous donnera des conseils et des solutions. Ces deux rencontres de consultation sont obligatoires pour pouvoir avoir droit à une libération automatique à la fin du processus de faillite.

7. Libération de la faillite

La dernière étape est la libération de vos dettes, c’est-à-dire que les dettes définies dans votre faillite sont effacées. Vous n’avez qu’à compléter et respecter toutes les étapes et conditions. Cette libération se fait ou bien automatiquement ou en passant devant une audience de libération. 

Une libération automatique des dettes se fait entre 9 mois et 21 mois après la date de votre faillite. Vous aurez droit à celle-ci si:

C’est votre première faillite

Personne ne s’oppose à votre libération

Vous avez participé aux consultations prévues par la loi

S’il s’agit de votre deuxième faillite, la libération automatique est toujours possible. Cependant, la libération se fait 24 mois à 36 mois après la date de votre faillite.

Si vous passez devant une audience de libération pour un jugement par le tribunal, selon votre situation vous pouvez être jugé pour:

Une libération absolue: Vous êtes libéré de vos dettes et vous n’avez rien d’autre à payer

Une libération conditionnelle: Vous n’êtes libéré que sous certaines conditions (paiements sur une période de temps donnée)

Une libération suspendue: Vous ne serez libéré qu’à une date à venir

Une libération refusée: le tribunal refuse de vous libérer de vos dettes (ce qui est rare)

Quel est le rôle du syndic?

Le rôle du syndic autorisé en insolvabilité est de gérer le processus de faillite de A à Z. Il évalue votre situation financière et vos besoins en fonction de votre niveau d’endettement, de vos biens, de votre situation familiale et  de votre budget. 

En fonction de son analyse, il détermine si la faillite personnelle est la meilleure solution u si d’autres options sont plus avantageuses pour vous. Si la faillite est la bonne option pour vous, il détermine avec vous les biens que vous devez vendre et ceux que vous pouvez conserver.

Il vous offre également des séances de consultation pour vous informer sur la bonne gestion d’un budget, sur le crédit et la consommation. Le syndic suit également votre situation jusqu’à votre libération. Il a comme responsabilité de faire un suivi de votre budget, vos revenus et votre situation financière. 

Obtenir une consultation gratuite

Les avantages de faire faillite 

Faire faillite vous permet de récupérer votre paix d’esprit. Elle comporte plusieurs avantages tels que: 

Elle met fin aux appels harcelants de vos créanciers.

Vous n’aurez plus de saisies de salaire

L’élimination de la plupart de vos dettes

Vous aurez une formation afin d’apprendre à bien gérer vos finances et afin d’éviter de retomber dans cette situation.

Vous pouvez recommencer à zéro. La faillite vous permet de reconstruire votre cote de crédit.

Combien de temps dure une faillite?

Plusieurs facteurs influencent la durée d’une faillite au Québec. Elle est déterminée selon s’il s’agit d’une première ou d’une deuxième faillite et selon le revenu excédentaire. Un revenu excédentaire correspond à la partie de vos gains pendant la faillite qui dépasse le revenu dont vous avez besoin pour conserver un niveau de vie raisonnable.

Pour une première faillite : 

Sans revenu excédentaire = 9 mois

Avec revenu excédentaire = 21 mois

Pour une deuxième faillite : 

Sans revenu excédentaire = 24 mois

Avec revenu excédentaire = 36 mois

Le syndic sera en mesure de vous expliquer plus amplement les critères et de calculer votre revenu excédentaire.

Quelles sont les dettes concernées par la faillite?

La faillite ne vous libère pas de toutes vos dettes. Certaines dettes ne sont pas libérables. Voici une liste des dettes incluses et non incluses dans la faillite. 

Les dettes libérables

Des prêts personnels

Des factures accumulées

Des frais pour des services professionnels en retard

Des dettes liées à des impôts

Des soldes impayés sur des cartes de crédit

Des dettes envers les agences de recouvrement

Des dettes sur des marges de crédit

Des prêts étudiants (si un délai de 7 ans s’est écoulé entre la fin des études et la date de la faillite).

Les dettes non-libérables: 

Les dettes de pension alimentaire 

Les dettes d’une fraude, d’un détournement de fonds ou d’un abus de confiance.

Amendes, pénalités et infractions.

Les indemnités à payer dans une affaire civile.

Les prêts étudiants avec exception.

Les dettes provenant de déclarations mensongères, c’est-à-dire c’est quand une personne ment concernant son revenu d’emploi pour obtenir un prêt personnel. 

Combien de temps la faillite demeure-t-elle dans mon dossier de crédit?

Le dépôt d’une faillite a un impact considérable sur le dossier de crédit, car il permet aux banques et aux prêteurs de déterminer la valeur du risque qu’ils courent en vous prêtant de l’argent. 

La faillite reste dans votre dossier de crédit pendant 6 ans après votre date de libération dans le cas d’une première faillite. Pour une deuxième faillite, celle-ci reste 14 ans dans votre dossier de crédit après la date de votre libération.

La loi sur la faillite et l’insolvabilité permet à une personne d’obtenir un nouveau crédit lorsqu’elle est libérée de sa faillite. Vous n’aurez donc pas à attendre jusqu’à ce que la faillite soit retirée de votre dossier pour demander un nouveau crédit. Il faut plutôt attendre entre 2 à 3 ans après la date de la libération de votre faillite.

Voici quelques conseils pour que vous puissiez emprunter après avoir déclaré faillite: 

Adopter de bonnes habitudes financières

Emprunter une somme d’argent raisonnable et la rembourser dans un délai assez court.

Faire vos paiement régulièrement pour que votre cote de crédit s’améliore.

Combien coûte une faillite au Québec?

Au cours de votre faillite, il y a des paiements mensuels que vous allez devoir faire à votre syndic autorisé en insolvabilité. Ces paiements varient selon votre capacité financière. Le montant à payer varie d’un dossier à l’autre selon plusieurs facteurs comme les revenus, les actifs saisissables, etc.

Pour une première faillite, les paiements mensuels varient entre 150 et 200 $ pour la durée de la faillite. Quand vous avez des personnes qui dépendent financièrement de vous, le montant est réduit. Si vous avez des dépenses spéciales comme des frais de santé ou des frais de pension alimentaire, cela influencera vos paiements mensuels. Si vous avez des questions précises par rapport à votre situation, n’hésitez pas à nous contacter.

The post Comment faire faillite au Québec? appeared first on Groupe Serpone.

[groupeserponemontreal]

How does a business declare bankruptcy?

Despite its negative connotation, corporate bankruptcy can be a solution for businesses that are struggling with debt. For companies that are no longer able to respect their financial obligations or that find themselves in a situation of over-indebtedness, commercial bankruptcy is a solution that helps you get rid of your debts and avoid any legal proceedings from your creditors.

Commercial bankruptcy is a legal process that can be defined as an operation by which a company is released from its debt totally or partially. It is regulated by the Bankruptcy and Insolvency Act, which deals with the bankruptcy of independent people or businesses. 

What is commercial bankruptcy?

Commercial bankruptcy is a legal process adopted under the Bankruptcy and Insolvency Act and managed accordingly by a licensed insolvency trustee. When a company is unable to meet its financial obligations, a declaration of bankruptcy allows you to free yourself from your creditors and start a new business.

When to consider commercial bankruptcy?

When a business is no longer able to meet its financial obligations or honor its commitments within the expected deadlines, it can declare bankruptcy.

Commercial bankruptcy is possible in the following situations:

The volume of business or turnover has dropped significantly;

Lack of liquidity or cash;

The debt ratio is too high;

The level of debt to be reimbursed to creditors is becoming more and more important.

A company that no longer has sufficient capital to restart its activities, i.e. whose revenues no longer cover its operating costs or expenses, or that simply wishes to end its commercial activity, may consider this solution. Generally, any business with more than $1,000 in debt is eligible for commercial bankruptcy.

The Benefits of Commercial Bankruptcy

When a company decides to declare bankruptcy, its trustee represents it and negotiates with its creditors. Your trustee supports you at all stages of the process and ensures reimbursements, liquidation of assets, etc. The company is therefore completely acquitted.

Commercial bankruptcy has many benefits for a company, namely:

The company no longer has to repay its creditors;

All the lawsuits against the company are dropped;

Commercial bankruptcy offers definitive protection to the company against any lawsuit from creditors;

A suspended attachment of earnings order;

Commercial bankruptcy protects the business from potential foreclosures by creditors.

These benefits are immediate as soon as bankruptcy is declared.

The stages of a commercial bankruptcy

1. Meeting with the licensed insolvency trustee

Commercial bankruptcy is not a suitable solution for all situations, hence the need and importance of consulting with a licensed insolvency trustee (also known as a bankruptcy trustee). First, your trustee meets with you to study your financial statement in detail to determine the best solution based on your needs. In some cases, a commercial proposal is an alternative solution.

2. Fill out the documents required for bankruptcy

This step allows the trustee to provide the company with the list of documents necessary to file bankruptcy, these documents include the financial statements, the inventory of assets, contracts, the status of creditors, a list of debts, etc.

You should also know that in a commercial bankruptcy, all of the company’s assets are seizable. This stage constitutes the takeover by the trustee, who takes care of all the steps that follow.

3. Filing of documents and registration of bankruptcy

Once the documents have been signed and delivered. This signature gives effect to the disposal of the business’s property and confirms the registration of the declaration of bankruptcy with the Office of the Superintendent of Bankruptcy.

4. Taking possession of assets and inventory

As soon as the business bankruptcy is declared, the trustee holds the assets of the business and is authorized to carry out an inventory following the measures put in place by the Office of the Superintendent of Bankruptcy.

With a few exceptions, the trustee now has the right to freely enter the places where the company’s assets are disposed. With the help of a chartered appraiser or an inventory manager, he can begin to count all the assets. The inventory is then completed and submitted to the lead company administrator.

5. Sale of assets

The sale of assets is the process of converting all of the company’s assets into money.

A private sale, a public or private invitation to tender… the trustee must consult with the creditors as well as the inspectors in order to decide on the method of sale to adopt. 

This could be:

An auction

A real estate agency in the case of real estate properties

An auction sale

A retail sale

A sale of rights in the case of intellectual properties, professional patents, telephone numbers, etc.

Whichever method the trustee chooses, he is responsible for establishing the costs and benefits for each transaction.

6. Distribution to receivables

Once the selling of goods has been completed, the trustee is responsible for distributing the resulting amounts to the respective creditors of the company. The distribution of repayments is done in order of priority, which results from an agreement between the trustee, government agencies and secured creditors.

This order, stipulated by the Bankruptcy and Insolvency Act, reimburses government services first. Next come employees, secured creditors and unsecured creditors.

7. Administration and closing of the file

After the establishment of the final income statement, the authorized insolvency trustee deems his administration complete and submits a statement to the inspectors of the office of the Superintendent of Bankruptcy and to the court for taxation.

8. Request for release from court

As soon as the statement is validated by the court, the trustee declares the release of the owners and administrators of the company.

What is the role of the Licensed Insolvency Trustee in a commercial bankruptcy?

The Licensed Insolvency Trustee is the only agency authorized by the government to manage and conduct regulated procedures for insolvent companies wishing to go bankrupt and free themselves from their debts.

The main role of the trustee is to analyze in detail the situation of the company and to offer the most suitable solution to its situation. The trustee studies in depth the financial state of the company as well as all the possibilities available to it. He offers the company several options such as a debt restructuring proposal, a commercial proposal or a commercial bankruptcy.

The trustee acts as your privileged interlocutor and is responsible for liquidating the company’s assets to pay back the creditors. He also offers you recommendations adapted to your situation in the event of future projects.

Commercial bankruptcy in Quebec

In the province of Quebec, commercial bankruptcy is governed by the Bankruptcy and Insolvency Act, which was drafted by the Government of Canada and which applies to insolvent individuals or businesses (voluntary or not).

This law provides many options for licensed insolvency syndicates as well as creditors and offers fair solutions to both parties. Its main objectives are:

The division of the bankrupt’s assets among the creditors.

To give a chance to an individual or a company to restore its solvency.

Foster conviction in the Canadian funding system.

Save an insolvent business from bankruptcy with a commercial proposal.

The post How does a business declare bankruptcy? appeared first on Groupe Serpone.

[groupeserponemontreal]

How to Find a Cheap Bankruptcy Lawyer - Basic Tips on Choosing One

Bankruptcy lawyer is the person who will help you when you are having trouble paying your debts to your creditors in the course of assets divisions. There are many bankruptcy lawyers that you can find either from yellow pages, your local bar association referral, family or friends recommendation. You may definitely will choose lawyers who offering cheap cost in your insolvent period.

Please keep in mind to avoid hiring bankruptcy lawyer based on their cheap cost only. You need to acquire a skilled cheap bankruptcy lawyer who can really assist you out from your unfortunate financial injured and not causing you a lot more at the end of the day for their less acknowledgement on bankruptcy lawsuit.

Basic Tips on choosing a bankruptcy lawyer

The first thing that you need to do is gathering a lot referral on appropriate bankruptcy lawyer that you need. You can have this information from your local bar associations or even from your family or friends who can advise you best regarding to their experience on having bankruptcy situation also.

From these lists you must choose a lawyer that can protect your assets and legal rights. This bankruptcy lawyer should also be an easy person to discuss with fully respect and caring of all your situations. One way to know this is by having appointments on these lawyer lists you have sum up and discuss your problem as clear as you can. This will help you having a clearer picture on how will they take care your bankruptcy problems.

Please ensure that your chosen lawyer is an experienced and well trained specialized. This lawyer has to be really committed to deal with your creditors and negotiating with your debt settlement, so you can reduce the pressure that might harass you and having a peaceful mind instead.

This chosen lawyer has to be well informed also on any new lawsuit that is avail. So you can have valuable update information and a better action legal advice to relief your insolvent financial.

The last thing that you must have clear information before choose one of them is by having a clear lay out on what service will your lawyer offer based on their contract draft.

The most important thing that you must certain about is especially on their service charge fees, including information on how you will pay it. Since this bankruptcy lawyer fees must be approved by the bankruptcy court as well, this kind of fees is usually being paid later on.

Original Article Was Published Here: How to Find a Cheap Bankruptcy Lawyer - Basic Tips on Choosing One