Debt Help FAQ

1. What is a Licensed Insolvency Trustee (LIT)?

A Licensed Insolvency Trustee (LIT) is a federally regulated professional authorized to help individuals and businesses manage their debt problems. LITs provide debt relief solutions such as consumer proposals and bankruptcy filings. They also offer expert advice on your financial situation and help you explore all available options to address your debt.

2. What is a Consumer Proposal?

The first step to overcoming debt is understanding your financial situation. Our LITs will conduct a thorough debt assessment and offer credit counselling to help you better manage your finances. We’ll work with you to create a personalized plan that suits your needs and goals.

3. How Does Bankruptcy Work?

Bankruptcy is a legal process that provides relief to individuals who are unable to repay their debts. When you file for bankruptcy, a Licensed Insolvency Trustee manages the process, which may involve selling certain assets to pay your creditors. Bankruptcy typically lasts for nine months for first time bankruptcy filings with no surplus income, after which your eligible debts are discharged, giving you a fresh financial start.

4. Will Filing for Bankruptcy or a Consumer Proposal Affect My Credit Rating?

Yes, both bankruptcy and a consumer proposal will impact your credit rating. Bankruptcy will remain on your credit report for six to seven years after discharge, while a consumer proposal will stay on your report for three years after the proposal is completed. However, these options may be beneficial in the long term as they allow you to eliminate debt and start rebuilding your credit.

5. What Is Debt Consolidation, and Is It Right for Me?

Debt consolidation involves combining multiple debts into one single monthly payment, often at a lower interest rate. This option may be suitable if you are struggling to keep up with multiple payments but have a stable income that can support a consolidated payment plan. It’s important to consult with a Licensed Insolvency Trustee to determine if debt consolidation is the best option for your financial situation.

6. Can I Keep My House and Car If I File for Bankruptcy?

In most cases, you can keep your house and car if you file for bankruptcy, as long as you continue making the required payments and there is no significant equity in these assets. However, every situation is unique, and it’s crucial to discuss your specific circumstances with a Licensed Insolvency Trustee to understand what assets may be affected.

7. How Much Does It Cost to Work with a Licensed Insolvency Trustee?

The cost of working with a Licensed Insolvency Trustee varies depending on the debt relief solution you pursue. In a consumer proposal, the fees are included in your monthly payments. In bankruptcy, the fees are regulated by the government and are typically based on your income and the complexity of your case. During your initial consultation, we will clearly explain all associated costs.

In both a consumer proposal and a bankruptcy, the fees that a LIT firm can charge are regulated by the Office of the Superintendent of Bankruptcy and the Supreme Court of BC. 

8. What Should I Expect During My First Meeting with C.E. Craig & Associates Inc.?

During your first meeting with us, we will take the time to understand your financial situation in detail. We’ll review your income, expenses, assets, and debts to provide you with personalized advice on the best debt relief options for your situation. This initial consultation is confidential and free of charge, with no obligation to proceed.

9. How Long Does the Debt Relief Process Take?

The duration of the debt relief process depends on the option you choose. A consumer proposal can take up to five years to complete, while bankruptcy usually lasts 9 to 21 months, depending on your circumstances. Debt consolidation timelines vary based on the amount of debt and the repayment terms. We will help you understand the timelines associated with each option during your consultation.

10. What Are the Alternatives to Bankruptcy?

Alternatives to bankruptcy include consumer proposals, debt consolidation, and informal debt settlement. Each option has its benefits and drawbacks, depending on your financial situation. Our Licensed Insolvency Trustees will work with you to explore all alternatives and determine the best course of action.

Get Started Today

If you have more questions or are ready to explore your debt relief options, contact C.E. Craig & Associates Inc. today. With offices in Victoria, Langford, Nanaimo, and Surrey BC, our experienced team is ready to help you take control of your financial future. Schedule your free, confidential consultation now and take the first step towards financial stability.