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Frequently Asked Questions

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General
Who are we?
PwC Debt Solutions counsellors and trustees are certified and licensed professionals, working together to help people solve their financial problems. We understand how stressful financial problems can be, and we know how to help.
What do we do?
PwC Debt Solutions provides the full range of debt counselling and insolvency services. Our aim is to help everyone we meet find the best financial solution for them. One of our counsellors will meet with you to review your situation and help you decide which of the following is best for you:
  • Help to budget and manage your money
  • Debt consolidation or refinancing
  • A proposal to creditors
  • Personal bankruptcy
How do we do it?
We are certified and licenced to offer the full range of debt solutions, so we can focus on what’s best for you. We gather information, answer your questions, assess your financial situation and design a debt solution that fits your needs.
Should I shop around for the best debt solutions deal?
We never discourage anyone from shopping for value. Trustees’ fees are government-regulated, so we suggest you focus on finding the debt solutions provider that has a local office, offers a full range of services and makes you feel comfortable.
Credit Counselling
What is credit counselling?
If you can afford to pay your debts using a debt consolidation loan or by working out an arrangement with creditors, credit counselling could help you avoid having to make a consumer proposal or filing for bankruptcy. See Credit Counselling.
What is counselling and do I have to take it?
Counselling covers personal budgeting and money management. If you make a Consumer Proposal or become Bankrupt, you must take counselling by law.
Is a consumer proposal like a consolidation loan?
No, they are two different things. A consolidation loan is a single loan for the total amount you owe, giving you one monthly payment, usually at an interest rate lower than you were paying on some or all of your debts. A consumer proposal is a formal offer to creditors to pay what you can afford to clear your debts.
Proposals
What if I have the cash flow to make a proposal?
If your income exceeds living expenses, you should consider a proposal. In fact, if you file for bankruptcy when you have the ability to make a proposal, the Trustee is bound to oppose your discharge from bankruptcy. In this case, you could remain in bankruptcy an additional 12 months beyond the usual nine months and be required to make payments in each of these months. For more information see our Understanding Proposals page.
How do I file a consumer proposal?

These are the main steps making a Consumer Proposal:

  1. Schedule a free initial meeting with a PwC Debt Solutions Counsellor: You will learn your options, get answers your questions and decide if a proposal makes sense for you. PwC Debt Solutions offers free initial meetings with no obligation.
  2. Prepare the Proposal: The PwC Debt Solutions Counsellor, along with the Trustee, will help prepare the proposal and file it with the Office of the Superintendent of Bankruptcy. At this point, unsecured creditors must stop harassing you.
  3. Attend a Meeting of Creditors: In rare cases, this may be requested by the Office of the Superintendent of Bankruptcy or by creditors who together hold 25% of the value of proven claims.
  4. Make Payments: Make payments as required by the proposal to the Trustee who will then distribute funds to your creditors.
  5. Attend Counselling: Attend two financial counselling sessions.

NOTE: If the proposal is rejected by your creditors, or you default on your proposal, there is no automatic bankruptcy, but you will no longer have the protection of the Bankruptcy and Insolvency Act which will allow the creditors to resume collection procedures.

How will a proposal affect my credit rating?
A consumer proposal has less impact on your credit rating than, for example, bankruptcy. For previous bankrupts, a proposal will appear on your credit record for 3 years, while another bankruptcy will appear for as long as 14 years. A PwC Debt Solutions counsellor can give you advice on your situation in a free initial meeting.
Why would creditors accept a proposal?
Under a fair proposal, creditors may recover more now than they could get down the road in a bankruptcy. Also, recovery under a proposal is less work for the creditors.
Can I save money while in a consumer proposal?
Yes. Under a consumer proposal, you can save money so long as you continue to meet your obligations under the proposal.
Can I apply for credit while in a consumer proposal?
You can apply for credit when in either a bankruptcy or consumer proposal. The only stipulation is that you must inform the lender about the bankruptcy or consumer proposal if borrowing more than $1,000.
Is a consumer proposal like a consolidation loan?
No, they are two different things. A consolidation loan is a single loan for the total amount you owe, giving you one monthly payment, usually at an interest rate lower than you were paying on some or all of your debts. A consumer proposal is a formal offer to creditors to pay what you can afford to clear your debts.
In a consumer proposal do I make my new payments to the creditors?
In a consumer proposal you pay the administrator of the consumer proposal (PwC Debt Solutions) and we then pay the creditors. We are the “go between.” You deal with us. We deal with your creditors.
What is counselling and do I have to take it?
Counselling covers personal budgeting and money management. If you make a Consumer Proposal or become Bankrupt, you must take counselling by law. The first session must be held between 10 and 60 days following bankruptcy; the second session must be held no later than 210 days following the date of bankruptcy.
Can I apply for credit while in a consumer proposal?
You can apply for credit when in either a bankruptcy or consumer proposal. The only stipulation is that you must inform the lender about the bankruptcy if borrowing more than $1,000.
Can the creditors take money out of my account or garnish my pay?
No. Once you have filed a consumer proposal, you are protected from unsecured creditors.
Bankruptcy
What is bankruptcy?

Bankruptcy is a legal process that allows someone who is hopelessly in debt get a fresh financial start. To go into bankruptcy, you must be insolvent. This means that you must owe at least $1,000, and:

  • Cannot pay your debts as they generally come due;
  • Your debts exceed the value of your assets; and
  • You are not already bankrupt.

For more information see the Understanding Bankruptcy page.

How do I avoid bankruptcy?
You may have other options. Arrange a no-cost, no-obligation meeting with a PwC Debt Solutions Counsellor near you to discuss your situation and review your options. To contact a local office, use our office finder.
Will my creditors stop harassing me?
Yes. By law, all actions against you must cease once the bankruptcy or proposal documents are filed with the Superintendent of Bankruptcy. This does not apply to secured creditors who hold a mortgage on a house or a lien on a car. A properly secured creditor will continue to have a claim on the pledged assets. Also, bankruptcy does not cancel payments of a debt for alimony or child care.
Who will know?
If you have minimal assets, your creditors will be notified. There will be no ad in the local newspaper. However, all bankruptcy filings are public and anyone can access the documents. If you have significant realizable assets and creditors request a meeting, a notice will appear in your local newspaper advising when the creditors’ meeting will occur. Also, the Credit Bureau will be notified and the bankruptcy will be recorded and remain on your credit record for 7 to 14 years from the date of your discharge.
How do I go into bankruptcy?

There are two common ways you can go bankrupt.

  1. The most common way is to make a voluntary assignment in bankruptcy.
  2. The second, much less common way, is for creditors to ask for a court order making a person bankrupt.

A Trustee in Bankruptcy is required to administer the process. Usually, you complete an application form and give it to the Trustee, along with all related information and documentation. The Trustee meets with you to ensure that bankruptcy is your best option and then prepares the bankruptcy documents for you to sign. Once they are signed and filed with the Superintendent of Bankruptcy, you are officially bankrupt.

Will I lose my house and vehicle?
This depends on the value of your home or vehicle, if there are any liens against them, and any provincial exemptions and other factors. Your PwC Debt Solutions Counsellor will be pleased to go over this in detail at your no-charge initial meeting.
What assets don't I keep?
When you make an assignment in bankruptcy your assets vest with the Trustee, and may be taken to pay off your creditors in excess of the allowed exemption. These may include inheritances (that you receive or become entitled to if someone dies during the time of the bankruptcy), lottery winnings and certain other assets. For more details specific to your province, see the Understanding Bankruptcy page.
Are my spouse's assets and liabilities affected by the bankruptcy?
Not directly. Spouses are separate individuals. So unless your spouse also files bankruptcy, his or her assets and liabilities are not affected. However, where you own assets jointly (e.g. a house or car) the Trustee is responsible for liquidating the one-half interest owned by you. Also, if both you and your spouse have signed for a debt, then your bankruptcy or proposal means your spouse is now liable for the full debt.
What about my wages during bankruptcy?
You must report your income to the Trustee each month. Earnings after the start of a bankruptcy, such as wages, salaries or commissions, belong to you and will not be interfered with by the Trustee in most cases. However, the Superintendent of Bankruptcy gives the Trustee standards, including what is a reasonable income for the number of people in your family and your personal situation. If you earn more than the standard, the Trustee is required to collect and pay a portion to your creditors.
What debts are not cancelled by bankruptcy?

Certain types of debts, including interest, are not erased by bankruptcy. They include:

  • Court imposed fines
  • Debt incurred by misrepresentation or fraud
  • Alimony or child support payments
  • Damages imposed by Civil Court for intentional bodily harm, sexual assault or wrongful death
  • Student loans, if you become bankrupt within seven years of being a full- or part-time student
  • Validly secured debts (e.g. a house mortgage, car loan or lease)
What about alimony and maintenance?
Alimony or maintenance payments are not affected by bankruptcy. These payments must be kept up-to-date. A bankruptcy does not stop any actions for collection.
How much does it cost?
That will depend upon your circumstances. A PwC Debt Solutions counsellor or Trustee will explain the amount you need to pay once your situation is assessed. Fees are government regulated, so you will pay no more than someone else in your situation. PwC Debt Solutions will work out a way for you to pay these fees over time.
What happens during the bankruptcy?
You must do certain things during your bankruptcy, none of which are difficult or time-consuming. For example, you must attend two financial counselling sessions and complete monthly income and expense forms during your bankruptcy. Depending upon your income, you may have to make a monthly payment to the Trustee called "surplus income." The amount of the payment is set by regulation. If you are a first-time bankrupt, you may be automatically discharged nine (9) months after filing.
When is my bankruptcy over?
If you have never been bankrupt before, have completed the required counselling sessions, and no one has filed an objection to your discharge, you are eligible to be discharged from bankruptcy automatically after nine months. If you have been bankrupt before, or if you chose to file bankruptcy when you could have made a viable proposal, or if a creditor, the Superintendent of Bankruptcy or the Trustee opposes your discharge, then you will not qualify for an automatic discharge. Your discharge will then have to be decided either by a mediation process with the Trustee and the Superintendent's Office, or by the Bankruptcy Court. It is the discharge from bankruptcy that cancels your debts. A second-time bankrupt is usually discharged in 24 months. Your PwC Debt Solutions Counsellor will review the discharge process with you.
What about student loans?

Student loans, including interest, survive bankruptcy if the bankruptcy occurs within seven years of being a full or part-time student. However, the court may order a bankrupt to be discharged from student debt at any time after five years of ceasing to be a student if the court is satisfied that:

  • The bankrupt has acted in good faith with regards to the liabilities under the loan; and
  • The bankrupt has and will continue to experience financial difficulty to such an extent that he or she will be unable to pay the liabilities under the loan.
What are the steps in bankruptcy?

These are the main steps involved in making a voluntary assignment in bankruptcy:

  • Schedule a free initial meeting with a PwC Debt Solutions Counsellor: You will learn your options, how each option will impact you and get answers to your questions. PwC Debt Solutions offers free initial meetings with no obligation.
  • Sign the Statutory Bankruptcy Documents: If you decide to proceed, a Trustee will help you prepare, sign and file the bankruptcy documents. You are not bankrupt until these documents are signed and filed with the Official Receiver.
  • Stay of Proceedings: Once the bankruptcy documents are filed a stay of proceedings is in place to protect you from your unsecured creditors. This will stop creditor harassment, collection proceedings and garnishments on most debts.
  • Mail Notice to the Creditors: When the Trustee receives confirmation of filing from the Office of the Superintendent of Bankruptcy, he or she will notify your creditors of your bankruptcy.
  • Meeting of Creditors: The creditors have the right to a meeting with you and the Trustee. Although it is uncommon, if a meeting of creditors is requested the Trustee will schedule the meeting, and send notice to all parties advising of the date, time and location of the meeting. In most bankruptcies, the creditors do not request a meeting.
  • Administration: You must do certain things during your bankruptcy, none of which are difficult or time–consuming. For example, you must attend two financial counseling sessions and complete monthly budget forms during your bankruptcy. Depending upon your income, you may have to make a monthly payment to the Trustee called “surplus income.” The amount of the payment is set by regulation to be reasonable.
  • Discharge: After a certain time period—nine months for most first-time bankrupts—your bankruptcy will be discharged.
What is a Trustee in Bankruptcy?
A Trustee in Bankruptcy is a person licensed by the Office of the Superintendent of Bankruptcy to review a debtor's financial situation, and administer proposals and bankruptcies. The Trustee is an Officer of the Court and has a duty to ensure that both the debtor's rights and the creditor's rights are respected.
What is an Assignment in Bankruptcy?
An Assignment in Bankruptcy is a legal document vesting your assets with a Trustee in Bankruptcy for the general benefit of your creditors. This document, when filed with the Official Receiver, is the starting point of a voluntary bankruptcy. The date of filing of the Assignment with the Official Receiver is the effective date of your bankruptcy.
What stuff can I keep?

In a personal bankruptcy, you can keep what are commonly referred to as exempt assets. Exempt assets vary from province to province. In Atlantic Canada, exempt assets generally include:

  • A vehicle
  • Household goods and personal effects
  • Pensions
  • RRSPs
  • Tools of your trade

The federal and provincial laws determine the maximum value allowed for each exempt asset. The Trustee can provide you with more specifics.

In addition, you can generally keep any assets (such as a home or car) that are held as security or collateral for a loan, but if the asset is worth more than the loan, you may have to make arrangements to use the excess (equity) to help pay your debts.

Should I continue to pay any creditors?
Once you become bankrupt, you must not make any further payments to any unsecured creditors. Arrangements may be made with your PwC Debt Solutions Counsellor to continue to pay secured creditors.
How is my credit rating affected?
Filing an assignment in bankruptcy becomes a part of your credit record and will remain on record for six years from the date of your discharge if you are a first-time bankrupt. If you declare bankruptcy more than once, the information will be kept on file for fourteen years for each bankruptcy. After you are discharged you can take steps to re-establish your credit. Most people are a better credit risk after bankruptcy and will be in a position to rebuild their credit. You may find your credit rating improves after bankruptcy.
Can I still have a bank account?
Yes. You should open an account and keep your money at a bank to which you do not owe any money. A bank cannot legally refuse to open an account for a bankrupt person. If a bank refuses to open a bank account because of your bankruptcy, you may complain to the Financial Consumer Agency of Canada. Your rights to open a bank account are explained in this publication. (288 KB PDF). (French Version)
What is counselling and do I have to take it?
Counselling covers personal budgeting and money management. If you make a Consumer Proposal or become Bankrupt, you must take counselling by law.
Is Income Tax debt included?
Most income tax debt will be cancelled upon discharge.
Do I have to tell you about my spouse’s income?
No. Husbands and wives are separate individuals. So unless your spouse also files bankruptcy, his or her income is not an issue. However, if both you and your spouse have signed for a debt, then your bankruptcy or proposal means your spouse is now liable for the full debt.
Will you sell my house?
Most bankrupts get to keep their houses. If you have equity (amount left over after mortgages and penalties, including any property taxes owing) you can often arrange with the Trustee to "buy back" this amount and keep your home. If there is no equity the Trustee will generally release the asset to the secured creditor (the bank that holds the mortgage). You may be able to arrange with the secured creditor to keep the asset and continue making the mortgage or loan payments.
How much can I keep in my bank account?
The Trustee will take any money in bank accounts at the time of filing. Once you have filed, you can open a new account in a bank to which you do not owe money.
Will you take all my personal belongings and my house?
See answers to What stuff do I get to keep? and Will you sell my house?
Can I save money while in bankruptcy?
Yes. In bankruptcy, you can save money, so long as you report your income and expenses to the Trustee. If your income after expenses in bankruptcy is above a certain amount, you may be asked to contribute a portion of the excess to pay your creditors.
Can I apply for credit while in bankruptcy?
You can apply for credit when in either a bankruptcy or consumer proposal. The only stipulation is that you must inform the lender about the bankruptcy if borrowing more than $1,000.
How do I know the creditors are getting the money I give the Trustee?
Your only obligation is to make the payments to the administrator (PwC Debt Solutions). Once that is done (and you attend two counselling sessions), you have fully performed the terms of the consumer proposal and any remaining debts will be discharged. As an officer of the court, PwC Debt Solutions has a duty to pay creditors the amounts and in the manner set out in the proposal document.
Can I continue banking with my current financial institution?
Yes, as long as you don't have any debts with that financial institution. If you do have debts owing you should open a new account with a financial institution to which you do not owe money. Banks cannot legally deny a bank account to a bankrupt person.
Can the creditors take money out of my account or garnish my pay?
No. Once you have filed for bankruptcy, you are protected from unsecured creditors.

 
 
 

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