Hi all
A site that you may want to check out for Ontario student loans ishttp://www.bankruptcy-ontario.org/canada_student_loan.htm
Also for other means try this
Debt Management Plan
A debt management plan is a service provided by the Ontario Association of Credit Counselors. These are non-profit agencies created to help individuals experiencing financial distress.
The concept behind a debt management plan is this: you can afford to make a monthly payment, you just need some help negotiating with your creditors and a little breathing space to get back on top of things.
Debt management plans are best suited to persons with a limited number of creditors (5 or less) and under $5,000 in debts. The advantages of a debt management plan are:
- Maximum period to repay is 4 years;
- Interest relief may be possible; and
- Some debt may be forgiven.
A debt management plan is not a legal procedure - it is a voluntary agreement between you and your creditors. As such, a debt management plan does not need to include all of your creditors, nor is it binding on your creditors. A debt management plan also does not have the ability to automatically stop a garnishment order - the creditor must agree to lift the garnishment.
If you need a legal binding term try
What is a "consumer proposal?"
The concept behind a consumer proposal to creditors is similar to a Debt Management Plan: you can afford to repay a portion (or all) of your debts; you simply need more time to pay.
Unlike a Debt Management Plan, a consumer proposal to creditors is a legally binding procedure that is administered for the courts by a licensed trustee in bankruptcy.
Proposals to creditors are best suited to persons with debts in excess of $5,000 (to a maximum of $75,000), who have the ability to repay a portion of their debt. The advantages of a consumer proposal are:
- Maximum period is 5 years;
- If accepted by a majority of your creditors (50% +1) it is deemed to be accepted by ALL of your creditors;
- Interest is frozen at the date you file;
- You can negotiate to repay only a portion of the debt you owe;
- Your creditors are "stayed" (restricted) from taking any legal action against you; and
- Wage garnishments (except for support and alimony) are immediately stopped.
Proposals to creditors were created to provide people with an alternative to bankruptcy. If you are in financial trouble and you have the ability to repay a portion of your debt, perhaps a consumer proposal to creditors is the right solution for you.
Once you file a proposal, none of your unsecured creditors can garnish your wages or take you to court until the proposal has been dealt with. In fact, if your wages are being garnished and you file a consumer proposal, the garnishment will stop.
In addition, when you file a proposal to creditors, all of your unsecured debts are frozen and no more interest accumulates against them.
How does a consumer proposal work?
First, a trustee in bankruptcy will help you summarize your financial situation and determine how much of a monthly payment you can afford to make. Then, they’ll compare that payment to the total amount of your unsecured debt to determine how many months you will be required to pay. If the numbers appear reasonable for both you and your creditors, the trustee will prepare the documents necessary to file a proposal to creditors.
Is that all it takes to present a consumer proposal?
That’s the end of the first stage. The second stage is up to your creditors. Under the Bankruptcy and Insolvency Act ("BIA") your creditors have 45 days to vote for or against your proposal. If a simple majority (50 % +1) vote for your proposal then it is deemed to be accepted by ALL of your creditors. Fifteen days after that, if there are no objections, your proposal will be approved by the Court. From that date forward, both you and your creditors are locked into the terms of the proposal.
What if my creditors vote "no" to my personal proposal?
If 25 % or more of your creditors vote against accepting your proposal, your trustee will call a meeting of creditors. At that meeting (which you must attend) the trustee will help you negotiate with your creditors in an attempt to find an agreement that both you and the creditors find acceptable.
Here’s an example:
"You have debts totaling $25,000. After you pay all of your living expenses (rent, utilities, groceries, etc.) you have $500 left to pay bills. You want to leave yourself a bit of a "buffer" for unexpected expenses (like car repairs) so you think you can afford to make a payment of $350/month towards a proposal."
Generally, the threshold that creditors consider reasonable is an offer to repay at least 50% of the amount that you owe. In the example above, that would be $12,500. With a payment of $350 per month it would take you 36 months to pay that amount, so that’s probably the proposal to creditors that you would offer (36 monthly payments of $350/month).
If you could only pay $250 a month, then it would take you 50 months to pay $12,500. If you could pay $400 per month, then if would take you 32 months to pay $12,500.
Keep in mind that this is only an example. Your creditors might accept less than 50% or they may ask for more. Each consumer proposal is different and has to be considered on its own merits.
Which debts can I include in my proposal to creditors?
Consumer proposals to creditors were created to deal with unsecured debt. An unsecured debt is money owed without collateral. Some examples of unsecured debt include:
The other type of credit that people usually have is called secured debt. Secured debt is money that was borrowed with a condition that if you fail to make your payments one (or more) of your possessions may be seized and sold by the secured creditor. Some example of secured debt include:
- Mortgage
- Car loan/lease
- Financing contract
In most cases, secured creditors are excluded from your proposal. The exception: if you owe a secured creditor more than the value of the item they hold security over. For example:
"One of your creditors is Acme Finance. You owe Acme $2,500 and they hold security over your stereo system, with a current value $1,500."
Acme is both a secured ($1,500 for the stereo) and an unsecured creditor ($2,500 - $1,500 = $1,000). Under the terms of the proposal, you will have to make an arrangement to pay Acme the $1,500 that they are entitled to (the value of their security) or give them the security (your stereo). The other $1,000 that Acme is owed will get lumped together with all of your other unsecured debts.
Can’t I just leave a creditor out of the personal proposal?
No. If you file a proposal to creditors, you are required to include all of your unsecured creditors. That goes for family and friends too. All of your unsecured creditors must be treated the same - it’s one of the basic conditions of filing a consumer proposal.
What happens if I miss a payment on my consumer proposal?
Over the life of a consumer proposal you may miss up to 2 payments and the trustee will simply add two more payments to the end of the proposal.
However, if you miss 3 payments the proposal to creditors collapses and is annulled by the Court. If your proposal is annulled, your unsecured creditors may immediately apply to the court to garnish your wages and interest charges are applied to your debts back to the day that you filed your consumer or personal proposal.
Once you file a proposal to creditors, if you start to run into payment problems, contact your trustee immediately.
How does a consumer proposal affect my credit rating?
As soon as you file a proposal to creditors your credit rating will be revised to either an R7 (paid through a consolidation order, consumer proposal or credit counseling debt management program) or an R9 (bad debt or placed for collection or bankruptcy)and it will probably remain at this rating until the proposal is completed. In addition, after you complete the proposal, a note will appear in your credit record for up to 7 years from the date that you filed the proposal to collectors.
What does a proposal to creditors cost?
The trustee’s fees are set by the Superintendent of Bankruptcy and are described in the BIA. In most cases, your trustee will be paid out of the proceeds of the proposal. Using our earlier example, if you offered your creditors 36 payments of $350 to retire $25,000 worth of debt, your total payments would be $12,600. The fees for the proposal would come out of that amount.
I think I might be a candidate for a consumer proposal, what do I do now?
If you are experiencing financial difficulty, we recommend you make an appointment to see a trustee team to discuss whether a consumer proposal is an alternative to bankruptcy in your situation.
I do not work for any trustee and my 10 years is almost up. I have paid off my Canada Student Loan but still owe almost 4,000 on my Ontario Student Loan and had done the above to stop the 28% interest that the collection agency was charging me and on top of that wanted to garinshee my wages, as a single parent with an ex who refuses to pay child support and is self employed I needed to do something. By the time my 5 years is up my loan will have reached the 10 year time line for discharge- not that it will do me much good but I will be debt free. Because it was my only debt (student Loan) Bancruptcy was not really an option. Good Luck to all
Edited by pmsqueen
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