Frequently Asked

Debt Relief Frequently Asked Questions

What You Need to Know

The following questions are some of the common questions we get
asked about personal bankruptcy, debt, credit and consumer proposals.
A Licensed Insolvency Trustee (LIT) is a federally regulated debt professional that helps individuals and businesses with their debt.
Personal bankruptcies are quite complex and seen as a last resort when you owe a lot of money. Bankruptcy destroys your credit completely, but it gives you the opportunity to pay down some of your debt and even have some of it eliminated entirely over time. For more info on bankruptcy, contact us.
From your first visit, you will be treated with utmost respect and confidentiality. Throughout the process of working with us, we ensure that you understand what is going on, and that you know what you can expect in the next steps.
When you submit a consumer proposal, you will generally be assigned the lowest credit rating possible. Going forward, your ability to obtain and use credit depends on your personal financial maturity and ability to repay the debt. As a result, there are no guarantees.
Licensed Insolvency Trustees are the only professionals authorized to manage and direct proceedings that can relieve you of your debt. Trustees will work directly with your creditors and provide you with a range of options to help you get out of debt.
A consumer proposal is a formal, legally binding process that is administered by a Licensed Insolvency Trustee (LIT). This proposal is developed by an LIT as an offer to pay your creditors a percentage of what you owe over a set period of time. If accepted, you are then responsible for paying the set amount under any conditions in the proposal.
If your consumer proposal is declined by your creditors, you have a few options. At this stage, you can modify the proposal and resubmit it, consider other options, or declare bankruptcy. In this event, a Licensed Insolvency Trustee will walk you through all options on the table.

A credit counsellor analyzes your credit history, credit rating and budgets to determine ways to help you repair your credit. This can include managing your debt, helping you with budgeting, and guiding you to better use of your credit cards. If you are struggling to repair your credit, get in touch with us today.

Credit Counselling

There are many signs that can point towards a credit or debt problem.   A person may experience some or all of the following signs.

  • Having trouble paying bills on time
  • Receiving collection calls or reminders of past due accounts
  • Using up your overdraft or credit line
  • Sleepless nights due to debts
  • Spending more money than you have
  • Defaulting on monthly credit card payments
  • Impulsive spending due to financial concerns
  • Hiding debts or spending from your partner
  • Allowing bills to accumulate because you are unable to pay them
  • Your financial institution has turned down your request to consolidate your obligations
  • There is no budget or spending strategy in place
  • Feelings of hopelessness, as if you’ll never be able to pay off your debt.

Credit counsellors offer individual counselling and debt/money management strategies as a service.

Counsellors will examine your present financial situation and assist you in determining the best course of action for you such as a credit card consolidation loan, a debt management plan, a consumer proposal, or bankruptcy. They can also assist with financial planning, spending patterns, and credit utilisation.

Credit counselling can be a beneficial initial step in reviewing your debt, assisting you with collection calls, and providing guidance on how to proceed. The next step could be to create a budget, enrol in a debt consolidation programme, or speak with a Licensed Insolvency Trustee about filing a consumer proposal or bankruptcy. Lazard and Associates offer credit counselling and are licensed Insolvency trustees.

No. It is absolutely confidential to speak with us. No one will ever know you had an information consultation with us until you decide to take further steps like a debt repayment plan or consumer proposal.

A debt management plan, consumer proposal, or bankruptcy will all have an influence on your credit scores for a period of time, ranging from two years for a debt management plan to six or seven years for a first-time bankruptcy.

A credit counsellor can propose a debt management plan to your creditors and lenders. You can consolidate your obligations into one monthly payment with a debt management plan. Interest may be waived or lowered in several instances. However, you will almost always be required to return all of your debts. It’s a voluntary arrangement, therefore not all creditors and lenders may agree.

A debt management plan also known as a debt consolidation or debt payback program is a service provided by credit counsellors that allows you to pay off your obligations in full, often with lower interest rates or a longer repayment period. Credit counsellors contact your creditors on your behalf to offer a payment schedule based on your ability to pay with this choice.

The Bankruptcy and Insolvency Act of Canada regulates the consumer proposal and bankruptcy processes. A licenced insolvency trustee Like Lazard and Associates must assist with these procedures.

To assist you in repaying your debts in a fair amount of time, creditors may cut or waive interest as well as recurring charges/late fees. However, not all creditors will agree to lower interest rates. Most creditors support the debt repayment programme.

When creditors receive written notice from a Credit Counselling Canada member agency, they will usually contact the agency for any further information or facts they require concerning your case. You are still liable for the loan, and creditors may contact you if you fall behind on payments.

Consumer Proposal

You should consider consumer proposal when you are unable to repay the debts that you owe in full but are able to pay off a portion of the debt. To be eligible, you must be an individual who owes at least $1,000 in unsecured debt. The maximum amount you can owe and still be eligible for a consumer proposal is $250,000. Talk to us at Lazard and Associates about your consumer proposal concerns

A consumer proposal can include any type of unsecured debt. An unsecured debt is one that is not backed or secured by an asset you possess, such as a mortgage loan, which is secured by your home. Examples of unsecured debts include credit cards, personal loans, payday loans, lines of credit etc.

Your individual consumer proposal filing does not go on your spouse’s credit record. However, if you and your spouse have joint debts, your partner may be held liable for the whole debt if you file a consumer proposal. If you and your spouse both have a lot of personal debt and joint debt, filing a combined Consumer Proposal can be a good idea.

If you file for a consumer proposal, you keep all your assets, including any tax returns, investments, and home equity. If you own a home or a car, you must continue to make mortgage or auto loan payments to keep them, as these debts are not included in a consumer proposal. For homeowners with significant credit card balances and other unsecured loans, a consumer proposal is a realistic debt reduction option.

A consumer proposal will have an impact on your credit score making it less likely that you will be able to get credit. However, a consumer proposal will only stay on your record for three years after your final payment, which allows you to begin a fresh. Speak to an associate at Lazard and Associates about your situation.

You will need to hand over your credit cards to your Licensed Insolvency Trustee when you file a consumer proposal. Unless it’s a prepaid or secured credit card, you won’t be able to apply for a new credit card while making payments on your proposal. Reach out to our experts at Lazard and Associates if you think a consumer proposal might be for you.

Filing a consumer proposal has no impact on secured debt, such as your mortgage and car loan. You must continue to make your mortgage payments on a regular and timely basis. If you don’t, your mortgage lender may take action to confiscate your house due to mortgage arrears. You should find it easier to keep making vehicle and mortgage payments if you use a consumer proposal to consolidate and pay off all your unsecured obligations. Your Licensed Insolvency Trustee at Lazard and Associates will help you create a budget that helps you to meet all your responsibilities.

The proposal will be cancelled if you skip three months of payments. Your creditors cannot take any further action against you as long as you fulfil the provisions of your plan. Here at Lazard and Associates, we will help you create a budget that lets you to meet all your financial responsibilities.


Alternative debt relief options, such as a consumer proposal, have helped many people get out of debt. A Licensed Insolvency Trustee will examine your circumstances carefully and explain all available debt relief options to assist you in determining the best option for you. Bankruptcy is normally chosen only after all other debt relief options have been exhausted. Contact us at Lazard and Associates to see what your options are.

If you declare bankruptcy, you will still be liable for some of your debts. Examples of such debts include secured loans (i.e. car loans), mortgages, spousal support payment, child support payment, alimony, debt as a result of fraud, court imposed fines etc. Bankruptcy allows you to eliminate most, if not all, of your unsecured debts, such as credit cards, lines of credit, bank loans, payday loans, and tax debts.

No. A licenced insolvency trustee has the authority to start and process bankruptcy cases. Unless your situation is especially complicated, in which case your trustee will consult with your chosen attorney. Lazard and Associates offers bankruptcy advisory and filing services.

Most provinces offer exemptions that allow you to keep some of your home’s equity if you file for bankruptcy. Leased or financed vehicles are not included in your bankruptcy unless there is sufficient equity value over the loan amount. Bankruptcy exemptions in Ontario covers one vehicle up to $7,117 and homes with equity not exceeding $10,783. However,  if you’ve previously paid off a considerable chunk of your mortgage and you’ve built up equity in your house, bankruptcy law states that you must utilise that equity to pay off some of your debts to your creditors. Talk to your Licensed Insolvency Trustee about your alternatives if you have numerous vehicles or other assets that you want to keep. Work with our insolvency experts at Lazard and Associates to determine which options are best for you. Bankruptcy is the last option we will recommend to our clients.

While bankruptcy will discharge your unsecured debts, you will still be responsible for alimony and child support payments if you apply for bankruptcy. However, working with a LIT like Lazard and Associates will help you plan better to meet your financial obligations.

Your individual bankruptcy filing does not go on your spouse’s credit record. However, if you and your spouse have joint debts, your partner may be held liable for the whole debt if you file for bankruptcy. It is best for you and your spouse or co-signor to seek the assistance of a Licensed Insolvency Trustee such as Lazard and Associates at the same time to ensure that both of your needs are met.

Your student loan debt is immediately erased If you have been out of school for at least seven years and file for bankruptcy. If you attended school within the last seven years, you may be eligible to have your debts forgiven under hardship provisions. All your choices for dealing with student debt can be explained by a Licensed Insolvency Trustee Such as Lazard and Associates.

No. Most people are completely unaware that you have filed for bankruptcy. While bankruptcies are public records, accessing them normally necessitates paying a fee, which does not happen very often.

Bankruptcy will have a negative impact on your credit score stay on your file for seven years. There is a high chance that your credit rating has already been impacted negatively before considering bankruptcy. Bankruptcy might provide you a fresh start and help you rehabilitate your credit faster than other debt relief options.

A discharge relieves you of your legal obligation to repay the debts you had as of the day you filed for bankruptcy except for certain types of debts that are specifically prohibited by law. This discharge could also be automatic, non-automatic, conditional, or suspended.