Common Questions & Answers:
Q: How can I stop the creditors from taking collection action or phoning me constantly for payment?
A: Remember that you have a duty of care to your creditors to provide financial information and to pay your debts. However if you find that you cannot meet your financial obligations and creditors are constantly calling or starting collection action, we recommend that you contact our office. A formal filing of a bankruptcy or a type of proposal will have the effect of stopping creditors from contacting you or taking collection action. We deal with your creditors at that point. Secured creditors may still have the right to take steps to realize on their security.
Q: How will this affect my creditor rating?
A: A first time bankruptcy in Saskatchewan will remain on your credit rating for six years from the date that you are discharged or exit bankruptcy. If a proposal is filed, it will remain on your credit rating for four years from the time that you are discharged.
Q: If a bankruptcy is reflected on my credit rating, will I be able to obtain credit?
A: Yes, once you are discharged from bankruptcy you have the right to obtain credit. However credit is a privilege and not a right. You may have to convince creditors that you are worthy of credit again.
Q: What can I do to re-establish credit once I am out of bankruptcy?
A: There are a number of factors that creditors may look at in deciding if they will grant you credit. If you can provide security or collateral, that will be viewed favorably. A co-signer or someone who will guarantee the loan is also helpful. Once you have obtained your first loan be sure to pay it off in a timely manner or even before it is due. Other factors will determine how quickly you can re-establish credit, such as:
- employment history,
- length of time that you have banked with your current institution,
- level of income,
- number of loans successfully paid and number of unsuccessful loan applications
When you are rebuilding a credit rating, you might want to open a savings account and be sure to pay credit card balances on time.
Q: How do I get help with budgeting or handling my day to day finances?
A: There are a number of resources available on the Internet as reflected in our “Resource Library” or you can contact our office for additional information. While in bankruptcy or proposal you will be required to attend two counseling sessions with our experienced counselors that will get you off on the right foot. Additional counseling can be arranged for monetary or non-monetary issues.
Q: What happens if I owe taxes to Canada Revenue that I can’t afford to pay?
A: If you owe taxes that you cannot repay in a reasonable time frame or you are not able to reach an agreement with their tax collectors, we encourage you to contact a licensed insolvency practitioner such as ourselves. We will review your options with you such as negotiating a payment plan with them or formally filing a proposal or bankruptcy.
Q: What happens if I have not filed tax returns for a number of years?
A: If you have not filed tax returns and you had taxable income for those years, then you must file the outstanding returns or you may be prosecuted for failing to file under the Income Tax Act. If you are having difficulty, you should seek the assistance of a tax preparer or accountant. A licensed insolvency practitioner can provide assistance in this area as well
Q: Will I still have to pay my Student Loan debts if I go bankrupt?
A: If your student loan is more than 7 years old from the date you ceased to be a full- or part-time student, it is considered a dischargeable debt, meaning that you would not be required to pay the balance remaining. If the debt is less than 7 years old and you go bankrupt, the loan is included in the bankrupt (or proposal) there is a Stay of Proceedings against the creditor but the debt SURVIVES. This means that once you are discharge from bankruptcy or the proposal is completed you will be required to make arrangements to pay the remaining balance and the interest will continue to accrue. In some circumstances if the debt is more than 5 years but less than 7 years old, you can seek an Order from the Court discharging you from the debt but this is dependent on your situation and ability to pay (based on hardship).