5 Common Misconceptions about Consumer Proposals and Bankruptcies  

_{By Dean Vanwijk, Bromwich+Smith Staff | 821 words | Reading Time: 4 minutes | Date: 2023/10/24}

Dealing with debt in the modern age can be stressful and overwhelming, and for many people, it can be a challenge to navigate the complexities of debt relief options. Misconceptions perpetuated by popular media and other industry insiders can further cloud the decision-making process. At Bromwich+Smith, we as Debt Relief Specialists understand the concerns and questions that clients have about these debt solutions. In this blog I’d like to pull on my experience at Bromwich+Smith as well as that of my colleagues to clarify five common misconceptions that we’ve encountered, and provide insight into why reaching out to a debt relief specialist can be game changing. 

Skeptical of Our Legitimacy 

Some Canadians express skepticism about the legitimacy of debt relief services. They fear falling into a trap which is ultimately going to make their situation worse. They are worried that a program to eliminate their debt is too good to be true, and there must be a catch at the end of it.  To address this concern, I advise them to visit the Office of The Superintendent of Bankruptcy website, where they can find the Bromwich+Smith listed in the Trustee directory along with all other Licensed Insolvency Trustees. Additionally, I suggest exploring Bromwich+Smith's Google reviews to gauge the experiences of others who have sought debt relief. 

2. Impact on Immigration Procedures 

Newcomers to Canada may hesitate to pursue debt relief options due to concerns about how it might affect their immigration status. If you are a newcomer to Canada, and you reside here we can absolutely help with your debt. That said however, it is always a good idea to first consult an immigration lawyer or consultant to ensure that moving forward with a debt relief program doesn’t have any impact on your immigration proceedings or your ability to sponsor others. 

3. Hidden Fees 

Concerns about hidden fees often deter people from seeking professional debt relief help. At Bromwich+Smith, there are no hidden fees, such as retainers, sign-up fees, or consultation fees. Transparency is key in building trust and Bromwich+Smith takes pride in offering a straightforward and honest approach to debt relief. Seriously, call us for a no obligation phone call- if you aren’t wanting to move forward after that- its ok! 

4. Impact on Co-Signers 

We know that you may have concerns that filing a Consumer Proposal will negatively impact the credit reports of co-signers on your debts. However, this is simply not true. A co-signer will not have the proposal appear on their credit report since they are not filing it. They will however remain responsible for repayment in the eyes of the creditors. Debt relief specialists can clarify the nuances of these situations, providing you with a clearer understanding of their obligations and responsibilities. 

5. No More Access to Credit 

Depending on your situation, you may be able to secure credit during your program, however it will require additional steps to secure.  In the early stages of your debt relief program, it will be difficult to obtain conventional best rate credit options. We suggest starting with a secured credit card once you are ready to start rebuilding your credit. When your program is complete you will be able to focus on rebuilding your credit and should be able to secure best rate credit once again. Debt relief specialists like myself and your dedicated Licensed Insolvency Trustee, can guide clients on rebuilding their credit health post-proposal, helping them regain financial stability. If you require credit options sooner, I suggest speaking to your Trustee as they will be able to suggest lenders who work with individuals enrolled in debt relief programs and understand your situation.

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Bankruptcy Myths Debunked 

1. Asset Seizure 

You may fear that the bank will take all your assets, including those of their family members. This isn't true. Trustees can only seize assets that exceed the corresponding provincial exemption value or in cases where no exemption exists. Most personal belongings are protected. 

2. No Access to Credit for 7 Years 

Contrary to popular belief, you can obtain new credit after bankruptcy. The timeframes for eligibility vary, with first-time bankruptcy filers typically waiting 9-21 months for discharge, while subsequent bankruptcies may require 24-36 months. Debt relief specialists can provide guidance on rebuilding credit responsibly. 

3. No Cost 

Bankruptcy still incurs costs, even for those with no assets or surplus income. The fees vary by province and should be discussed with a debt relief specialist. However, it's essential to remember that the benefits of bankruptcy often outweigh these costs. 

4. End of the Road for Credit 

Bankruptcy isn't the end of the road for credit. Instead, it offers a fresh start, allowing individuals to regain control of their finances over time. Debt relief specialists can help create a plan for your financial future. 

5. Misunderstanding Bankruptcy 

Some Canadians mistakenly think that Canadian bankruptcy procedures mirror those in the USA. Debt relief specialists are well-versed in Canadian bankruptcy laws and can clarify any confusion, ensuring clients have accurate information to make informed decisions. 

Reaching out to debt relief specialists like myself and others at Bromwich+Smith can provide individuals struggling with debt the support and guidance they need. By addressing these common misconceptions about Consumer Proposals and bankruptcies, you can approach the process with confidence and clarity. With a no-cost consultation and a straightforward, transparent approach, Bromwich+Smith offers a simple solution to debt relief, providing individuals with the opportunity for a fresh financial start. Don't let misconceptions hold you back; take the first step toward a debt-free future today. 

For your Free Consultation call 1.855.884.9243. You can also request a call back at our contact us page. We’re working with you to rebuild your worth. 

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By Dean Vanwijk , Debt Relief Specialist   
(825-413-5462)
([email protected])   
  
“Dean is a Debt Relief Specialist who helps people find simple solutions for their debt problems. He has seen firsthand the stress and anxiety that debt can cause in peoples’ lives, and takes pride in his ability to communicate the complex environment of financial health. As a trusted advisor and expert, he works closely to understand each persons unique situation and simplifying the process towards a clear goal. “