The process of financial recovery can be a confusing one and
we'd like to help make it easier by offering a selection of definitions
for various terms you may be involved with. If you require additional
definitions, please feel free to contact
us and we will help you as much as possible.
Assets are any items of property you own that have value, such
as a house, car, furniture, or cash.
TOP
The formal term for “going bankrupt” is “making
an assignment for the general benefit of creditors”. It
is a legal process where the non exempt assets of a bankrupt vest
with the trustee, who in turn liquidates them to satisfy your
debts with your creditors.
TOP
Bankruptcy is a legal process to allow someone with money problems
to get a fresh financial start. When you declare bankruptcy, the
Trustee steps into your financial shoes, and deals directly with
your creditors.
TOP
A Consumer Proposal is an alternative to bankruptcy, where you
offer to pay your creditors a percentage of what you owe them
over a specific period of time. It is a compromise of your debt,
where by you are able to retain your assets. Generally, you would
make monthly payments to a Trustee, and the Trustee will use that
money to pay your creditors. The amount you pay depends on your
personal situation and the amount of money you make.
TOP
A co-signer is someone who signs a loan with another person. Generally,
the co-signer guarantees that if the person who signs the loan
cannot repay the loan, the co-signer will repay it himself or
herself.
TOP
The trustee must provide two counselling sessions to all individuals
who file a Consumer Proposal or Bankruptcy to help them understand
the causes of their financial difficulties and provide financial
guidance to help you avoid a future financial difficulty.
TOP
Your credit rating is a history of all the money you have borrowed
and owe. It shows if you have successfully paid your debts over
time.
TOP
Creditors are people to whom you owe money.
TOP
A person who receives a loan or an advance of goods and services
in exchange for a promise to pay at a later date.
TOP
An “unsecured” creditor is someone who lends you money
without "attaching" to any of your assets.
TOP
A “secured” creditor is someone who has "attached"
to a certain piece of your property, such as your house or car,
and have the right to seize that property if you do not repay
your loan.
TOP
No creditor has any right or remedy against the property of a
bankrupt, or may commence or continue any action, execution or
other proceedings, for the recovery of a claim provable in bankruptcy.
TOP
Equity represents the percentage of your assets that you personally
own. For instance, if you have a mortgage on your home, the “equity”
in your home equals the market value of your home minus the amount
of your mortgage and applicable selling costs.
TOP
Property which is either held in trust for some other person,
or declared exempt through provincial legislation i.e. Ontario
Executions Act.
TOP
A legal process where a creditor has obtained a judgment and the
court has allowed them to seize your salary, money in your bank
account, or other money you own to repay your debt.
TOP
You are considered insolvent if all of your property was sold
at fair market value you would not have sufficient funds to satisfy
all of your debts, or you cannot meet your obligations as they
come due.
TOP
The Official Receiver is a federal government employee in the
Office of the Superintendent of Bankruptcy and an officer of the
court with specific duties under the Bankruptcy and Insolvency
Act.
TOP
The home in which you (and your family) live most of the time.
It can be a house, condominium, mobile home, or even a houseboat.
TOP
Every year, the Superintendent of Bankruptcy publishes guidelines
outlining how much money a bankrupt person is entitled to retain
for living expenses. 50% of any income over and above that amount
must be paid into their bankrupt estate, and is called “surplus
income”.
TOP
A Trustee, also known as a Trustee in Bankruptcy, is a person
who is licensed by the Office of the Superintendent of Bankruptcy
to administer the Bankruptcy and Insolvency Act. Trustees are
strictly regulated, and must keep abreast of current case law
and directives.
TOP
