by Ajay oberoi | Bankruptcy, Credit Counseling, Debt Management
The break-up of a marriage or common-law relationship has certain financial ramifications for both parties, including the splitting of assets and the creation of equalization payments (support).
However, both can be financially draining on one partner (and sometimes both) and could lead to bankruptcy.
So, what happens if one of the “exes” does file for bankruptcy as a result of financial hardship following the breakdown of the relationship?
Bankruptcy basically results in the liquidation of property (houses, cars, RRSPs, etc.) in order to pay off a portion of the outstanding debt (mortgages, loans, credit cards, taxes owing, etc.).
In the event of a bankruptcy following a divorce, the equalization payment also becomes an outstanding debt and the spouse being “supported” will have to settle for a reduced payment according to the bankruptcy payment agreement. However, spousal support does get preferred status in the bankruptcy’s payment distribution schedule, meaning it takes priority over other creditors such as credit cards and the amount outstanding is still payable after the claimant is discharged from bankruptcy.
So, in a nutshell, say John is supposed to pay Jane $1,000 a month for support and owes her $15,000 in back support. The trustee rules that over the course of his bankruptcy, John will pay back the $12,000 owed in the year prior to bankruptcy in addition to a percentage on the outstanding $3,000, and when he is discharged from bankruptcy, John still has to pay Jane the outstanding balance on the $15,000. Say John pays Jane $13,500 over the course of his bankruptcy; he still owes her $1,500 after he is discharged from bankruptcy. These are just examples for easy calculations and not indicative of actual payment schedules.
Now, the family home throws a wrench into the bankruptcy works. Under Canada’s Bankruptcy and Insolvency Act (“BIA”), the trustee liquidates the claimant’s assets to settle debts, but he can’t very well do that if the spouse with custody over the children is still living in the family home.
There are two solutions: force the sale of the family home in order for the bankruptcy claimant to realize his/her share of the asset’s value, or facilitate the sale of the claimant’s share in the home to the spouse receiving equalization payments. There are difficulties with either solution.
In the case of the former, provincial law may prevent the sale of the home due to the resultant financial hardship created for the child(ren)’s guardian, disruption of the child’s life, the availability of suitable alternative housing in the area of residence, the employability of the supported spouse (especially if he/she is required to stay at home to care for dependents), and even because of the history of the spouse and children in the family home.
Although preferable and perhaps an easier avenue toward asset liquidation, attempting to facilitate a sale between ex-spouses is dependent on the spouse taking possession of the house being able to secure suitable financing to purchase it. Again, that depends on the employability and financial stability of the spouse.
Either way, bankruptcy does make a difficult time more difficult for both parties in the separation but in the end, the bankrupt individual has a fresh start financially, and the supported spouse receives regular support payments (as opposed to the deadbeat’s “not at all”). In case if you want any help regarding debts call 416 650 1100 or visit www.gtacredit.com
by admin | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair
People gotta eat, right? And many probably don’t realize how much they spend on groceries because you don’t always think about your spending when it comes to the staples of life. There are things that you can do to lower your monthly grocery bill, though, so it doesn’t break your budget.
First of all, make a list and withdraw the cash with which to buy the groceries. You are more likely to spend less when you’re paying with the cash you have in hand than when you whip out a card and pay “whatever it costs.” Take along a calculator (every new Smartphone has a calculator app, so you always have one with you) and tally up as you go to make sure you stay on budget.
And don’t shop when you’re hungry. Those items you don’t really need look awfully good when your stomach is rumbling for them.
One of the best strategies is to buy what you need when you intend to use it, not doing a big shop when you have lots of money (on payday, for example) and then hoping what you bought lasts for the next two weeks because there’s bound to be wastage.
Think about this: food is one of the few things on which you spend money, that you are prepared to throw away — not all of it, but some of it — and we don’t really think much about it. For example, we cook up gallons of pasta and load up plates, and quite often we don’t eat everything that’s served, with the scraps going into the garbage or the bigger portions set aside as leftovers that don’t often get consumed before their fridge life expires.
Meats are often sold by weight, so you’re not saving by buying in bulk unless you find a drastically reduced price. But if you don’t have the means to freeze meats (preferably individually wrapped, so you can defrost what you need later, rather than defrosting the entire package), don’t buy in bulk.
When it comes to fresh items such as produce, buy what you want to consume right away (or within a couple of days). There isn’t a lot of discount on produce for buying in bulk, and it doesn’t store exceptionally well, so you’re best to buy it as you use it.
If you want the convenience of having your vegetable of choice to complement a meal, buy frozen vegetables, and cook what you need when you need it. Also, look at options in portion sizes. Broccoli crowns, for example, usually allow you to consume everything you buy, whereas broccoli stalks likely result in considerable wastage if you only consume the crowns. Also, mini-cucumbers allow you to use what you want as you go along, rather than cut up half an English Cuke and hoping you can finish the rest before it goes off.
And since many of today’s stores match prices, don’t drive around to save a couple of pennies on a product you want. And use coupons. Coupons are big savers on items you’re going to buy anyway and if you find a deal on something and the coupon applies to all quantities, you could save a bundle on bulk buys. You may also be able to combine price matching with in-store coupons for extra savings.
Finally, be aware that you’re going to pay extra for convenience. Think about those single-serving coffee makers. You can spend $6 for a box of cups that will allow you to make 12 cups. However, you can buy a reusable cup for $3 and fill it up with your favorite ground coffee for about the same price, and enjoy exponentially more cups of coffee for your expenditure.
Finally, remember that nutritious eating is better controlled by you than somebody at a big corporation, which may put in ingredients in their food you may not want in yours. Stay in control of the food you prepare and that will likely also keep you in control of your food budget. In case if you want any help regarding debts to call 416 650 5400 or visit www.gtacredit.com
by Ajay oberoi | Bankruptcy, Consumer Proposal, Credit Counseling, Credit Repair, Debt Management
We all belong to a generation of people that works hard to get going with life in terms of money. The economy does not come easy on us anymore. On top of that, being young has its own perks and downsides in this regard. We have our own sets of needs, wants, and desires. The new model of the Hoover board in town, that new sushi bar that just opened in your locale, birthday gifts for your loved ones, and what not – there’s a lot we have to take care of. After all, we all are working so we can have a comfortable life. However, living in times as unpredictable as today’s, we can never be too sure. Whenever people hear the word “saving”, they immediately think that they are being asked to give up on their wants and start cutting back. That is not entirely true.
Saving has become important because it acts as a cushion in a hard time. It takes away all your anxiety when you are busy spending on your favorite pair of shoes or stocking up on those neon-colored socks. Saving does not mean cutting back; it only means that you do things a little differently, and spend a little differently. It is all about perspective. To make sure you don’t see saving as a financial constraint, here are some tips that will make it easier for you to save more and spend in a better way in the long run.
- Start by taking your own lunch from home at work, so it saves you the extra expenditure on meals every day. Start doing your laundry at home instead of giving a pile of clothes to the washer every week. Put that washing machine to serve the purpose it is made for. It will save you the cost of weekly laundry. The point is, start eliminating extra expenses by seeking alternative, cost-effective methods to get them done.
- Do not stack up against your debts. Pay them off as soon as you can. Pay off all your fines, tickets, bills, and loan payments. All these expenses will only accumulate interest over them if kept on hold for long. These expenses are easy to brush off, it is human nature to delay what they do not want to deal with. However, paying them right on time will leave you with more cash to use, once this liability is done with.
- Whenever you get your paycheck, it gets more tempting for you to go and spend it on all the things you have been wanting for the entire month. Don’t do that. Make a commitment to yourself to make only one or maximum two big buys from each paycheck. This is because you cannot be sure what expenses you might have to incur later. This is why you must have some amount saved in your account and not spend it entirely on your wish list.
- Open a savings account. It is always a better option than putting all your money under the mattress. It allows you to save your money while giving you an extra amount over it every month. Who does not like extra? This way your money will not be spent on useless gains, and you will always have something in your bank accounts for your rainy days.
