Eve had been emailing me (Adam) back and forth a number of times asking about bankruptcy and how it works.
(Okay, you got me. Her real name wasn’t Eve but it makes for a more romantic storymoney-and-love – as romantic as bankruptcy gets anyhow).

She was interested in learning about the easiest way to get rid of her debts. I provided her with all the facts and figures and explained how the process works (and only that a Trustee in Bankruptcy can file a bankruptcy or a consumer proposal – no one else, not even a lawyer can do this).

After a few weeks of emailing back and forth, she was drawn to the fatal allure of the forked-tongue whispers of the slithering debt consultants. They promised her they could get a much better deal than any Trustee. They “explained” to her that a trustee only works for the creditors and try and make you pay back as much as possible (a gross oversimplification that is simply not true).

So what did Eve do?

Well the debt consultants promised her legal protection (afterall they had a lawyer working for them) and they said they could arrange a much better deal than a trustee in bankruptcy. So Eve took a bite of the apple and what happened next was a familiar and sad tableau.

She ended up paying the debt consultants a monthly fee (none of which went to her creditors). The “lawyer” provided zero legal protection and as a result she ended up getting sued by her creditors.

What happened next?

Well the debt consultants said she now needed to speak to their “court officer” who would than finally be able to help her (a court officer is a trustee in bankruptcy – someone she could have seen for free right from the start). The “Court Officer” met with Eve for all of 10 minutes, didn’t explain the paperwork she was signing and she ended up declaring bankruptcy without knowing any of the legal implications, her duties and what was required of her.

So Eve went bankrupt and didn’t have a clue about the bankruptcy process.

She didn’t hear from her trustee (the court officer) and after a few months she ended up getting paperwork from the trustee’s office stating that she hadn’t complied with her bankruptcy duties and as a result she was going to bankruptcy court (hard to know what you required to do when no one explains the process to you). They demanded she pay $1500 before they would even talk to her!

Bankruptcy is Like Marriage (& Divorce is not an option)

So Eve called me and asked for my help.
She was desperate and wanted to “quit” being bankrupt and file with another trustee.

I explained that you can’t simply quit bankruptcy, you have to be legally “discharged” from your bankruptcy by the trustee. For all intents and purposes she was “married” to that trustee and unfortunately divorce is not really an an option.

Eve would have to try and make it work with her trustee or make an application to bankruptcy court to try and get another trustee assigned to her file (not an easy, or free task – since most people would need to hire a bankruptcy lawyer and end up spending thousands in legal fees).

This is why it’s important to make sure that you meet with a few professionals beforehand and really understand what you’re getting yourself into. Not all doctors, lawyers, accountants etc. are created equal and it pays to do your research.

Eve’s Solution?

Thankfully I was able to offer her the option of filing a consumer proposal which would act to annul her bankruptcy and would allow our firm to administer the process.

In a consumer proposal, you are not in the legal state of bankruptcy and can circumvent the trustee issue (however this is not always a practical option to many people we meet).

In a consumer proposal you agree to pay a portion of what you owe and it has to fit two (2) criteria: better than a bankruptcy or approximately 30% of what you owe (whichever of the two are greater).

So in the end, Eve offered her creditors a consumer proposal, she was legally protected and was able to successfully discharge her debts through a consumer proposal and she had a very successful relationship with her new court officer.

If you feel your debts are getting out of hand and you need help, call us first (310-PLAN or 866-747-0660) and ask to speak to one of our professionals. Our consultations are always free and we will explain the process to you in full details.


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