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Family Tree Financial Debt Consultants has several programs to assist you in regaining financial stability. Have a look at some of the ways we can assist you:
 i) Debt Pooling – Our debt pooling program allows debtors to repay their debts at their own pace, with one monthly payment that fits into their current budget.
We have established agreements with over 300 creditors that allow individuals the opportunity to repay their principal over an extended period of time at a reduced or 0% interest rate. It is an informal arrangement and not part of the Bankruptcy and Insolvency Act. Our Credit Counselors can guide you in paying off your debt and rebuilding your credit rating.
We are licensed by The Manitoba Government as a Debt Repayment Agency to act on behalf of the Debtor. Since the program is not a court ordered option like an Orderly Payment of Debt, Consumer Proposals or Bankruptcy, we have a lot of flexibility.
Some of the advantages of our consolidation program follow:
- Payments are based upon your ability to pay and are structured to fit into your current budget. Often a 35% reduction in payments is possible.
- All fees are built into the monthly payment, with the exception of the initial account opening fees.
- We work to reduce or eliminate the interest, and most creditors will voluntarily drop the interest to 5% or 0%.
- This program does not go to court, and requires no court order.
- Creditors receive 100% of their principal back.
- If your circumstances change, there is no penalty for default, with the exception of an account closing fee.
- There is no penalty for paying the program early.
- There is an R7 credit rating for three (3) years after completion of the program, although some creditors will report an R1 after three months of receiving regular payments again.
- If one’s financial situation changes, all other options are still available.
- If sufficient capital becomes available, we can often make settlement arrangements with the creditors.
ii) Consumer Proposals – This legislated option allows the debtor to make a proposal to their creditors through an officer of the court, essentially reducing the amount principal that is required to be repaid on the debt(s).
A proposal works well with debtors who have surplus income, or some ability to pay back a percentage of their debt. There are two different types of proposals, which can be tailored to almost any debtor’s needs, and are only limited by the creative drafting of the court officer and the debtor and/or their representative.
Upon acceptance, this option is guaranteed to eliminate any further interest charges on the debts, and the debtor is subject to a monthly payment for a period of time, that usually ranges from 1 – 5 years. The amount of money offered in the proposal will basically depend on the manner in which the debtor is structured with their assets, their current and potential future income, and the court officer undertaking the file.
Our objective is to work with the debtor to make the proposal as lean as possible, yet still acceptable to the creditors. An analysis of the proposal is always compared to the dividend the creditor(s) would receive in a bankruptcy.
Click HERE to download a PDF with more details of this program.
iii) Settlements – In order to settle debt for less than the principal amount owed, a lump sum of money is mandatory. In most instances, this is not practical, but on occasion funds are realizable. The debtor may have resources available for procuring funds, and these options should be explored by the consultant.
Any settlement reached on behalf of a debtor during negotiations should be fully documented. The debtor will be given a release by the creditor, pending final payment. It is useful to obtain the creditor’s consent to update the local credit bureau that the claim has been resolved. This often facilitates the debtor obtaining credit in the future.
As a general statement, with 50% of claims, the creditor will settle for 50% of the claim. Most creditors will settle for less than the claim, given creditors have often “written down” an amount that has gone to a formal collection process or litigation, and face the following:
- Charges of perhaps 30% (including taxes and disbursements) for collection and execution;
- A substantial delay before the matter is resolved;
- A further outlay of funds before any benefit is realized;
- The real possibility of a dry judgment or payments being ordered in small amounts over long periods of time;
- Provisions in the Bankruptcy and Insolvency Act that help debtors to seek protection; and
- Interruption of the creditor’s business when dealing with counsel, answering interrogatories, attending examination for discovery, searching for documents; and otherwise dealing with the claim.
iv) Bankruptcy – Bankruptcy is looked at as the last resort for a debtor, but from a pure financial perspective, this is the best option for the debtor, and any other option a debtor exercises, has to generate a better return for the creditor in order to gain their approval. However, most often the debtor has moral or ethical concerns about making an assignment into bankruptcy.
It is our objective to dismiss any invalid objections, in order to allow the debtor to be better able to take care of themselves and their family financially. In many instances, the debtor has become a burden to our health and legal systems, and by restructuring them, we actually allow them to become productive to society once again. This action allows the creditor to clean up the mistakes they have made in their lending practices, and save themselves the administrative costs of any further collection practices.
Click HERE to download a PDF with more details of this program.
C) GOODS EXEMPT FROM SEIZURE
The most obvious break for debtors is found in the legislation of the Court Order Enforcement Act and the resulting regulations that vary from province to province. Although the dollar amounts vary under the different regulations, this keeps many things out of the hands of execution creditors.
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