Difference between revisions of "Dealing with Debt (10:V)"

'''NOTE:''' The following applies to individuals only.  

'''NOTE: Many counsellors and trustees provide an initial consultation at no cost. Consumers should be aware that unless they are going to meet with a lawyer they need not pay for an initial consultation.'''  

'''NOTE: Exercise caution when hiring unregulated companies that promise to "reduce" a consumer's debt. Effective April 1, 2016, any debt repayment agent and any corporation that collects and/or settles debt in BC should be registered with the Consumer Protection Agency (the Credit Counselling Society is a licensed organization).  For information on your rights relating to debt collection, refer to the Debt Collection tab on the [http://www.consumerprotectionbc.ca/ Consumer Protection Agency website].''' Please see the ''Business Practices and Consumer Protection Act,'' s 127 for more information on debt repayment agents.'''

'''NOTE:''' Before communicating with creditors, debtors should be aware of the consequences of acknowledging a debt as a result of the ''Limitation Act'' SBC 2012 c 13. Under the recently revised Act, for debts last acknowledged from June 1, 2013 onwards, after two years since the last acknowledgement of a debt by the debtor, a creditor has no legal recourse for pursuing the unpaid debt. Therefore, by instructing a  debtor to acknowledge a debt, even implicitly, a clinician will create a renewed two year time frame for the creditor to initiate legal action against the debtor. See note above, at the start of Section III, for further information.   

'''NOTE: Debtors should also be aware that if a judgement has been rendered against them it can be enforced for 10 years after the date of judgement (s 7). Refer to the ''Limitation Act'' for exceptions to this rule (s 23).'''  

'''NOTE:''' Contact the Credit Counselling Society for free help with this process if needed. The creditors may feel the reduced payments are not acceptable, but would likely not pursue alternative legal action if this is all the debtor can afford at this time. Communication with the creditors is vital, especially if a consumer has no ability make payments at this time.  

'''NOTE:''' Though non-profit, the Credit Counselling Society does charge a small fee to administer the Debt Management Program (DMP). While  counselling is free, CCS charges a one time setup fee of no more than the average monthly payment to creditors to a maximum of $75 upon entering the DMP.  Once a debtor has entered intot he program and begins making payments, and only upon written acceptance by creditors, CCS charges 10% of a debtor's deposit to a maximum of $75 per month. CCS will consider reducing or waiving fees where they would become a barrier to debtors needing the help of a DMP.

'''NOTE:''' If the debtor (except anyone in commercial activities (self-employed or business) or in  jail) chooses a trustee and is rejected  (due to a fee charge) because they are unable to pay, they should contact the Office of the Superintendent of Bankruptcy (“OSB”), and ask to participate in the Bankruptcy Assistance Program. The debtor must obtain a written refusal from 2 trustees and, if they qualify for the  program, will then be assigned a trustee in the referral program for a reduced fee (not for free). This program is not available to everyone that cannot afford to pay. Further, it does not exclude non-exempt assets such as GST and income tax refunds from seizure. Information can be  found at the [http://www.servicecanada.gc.ca/eng/goc/bankruptcy_assistance.shtml Bankruptcy Assistance Program website] or by calling the OSB’s national number at 1-877-376-9902.  

'''NOTE:''' A debtor who is on a low end fixed income, such as a fixed income pension, with circumstances unlikely to change may have no need  to declare bankruptcy as they would be, in essence, judgment-proof. Refer to [[{{PAGENAME}}#C. Communicating with Creditors when Unable to Make Contractual Payments | section C above, Communicating with Creditors when Unable to Make Contractual Payments]].