4 Questions to Ask Your Bankruptcy Trustee
You are so deep into debt and can’t seem to find your way out. The only way out besides settling your debts in full is seeing a bankruptcy trustee. Before we get into what questions you should ask your bankruptcy trustee, here’s a disclaimer: a licensed bankruptcy trustee is the only one who can provide you with protection under the prevailing Canadian bankruptcy law. So, ignore those lawyers and “debt consulting” companies with audacious claims of their ability to make your debts disappear.
Before you start beating yourself, consider the fact that over 100,000 Canadians file for one form or another of bankruptcy every year. Majority of these have not heard about the bankruptcy law. Whether you are among the few who understand the bankruptcy law or one of the many without a clue, the following questions will help during your interview with a bankruptcy trustee.
1. How Much Does a Bankruptcy Trustee Charge?
In most instances, your initial consultation should be free. However, if you pay a fee, the trustee is by law required to report it as part of your file. It cannot be a consulting fee until you file. In most cases, you won’t be charged a fee until you file. How much you pay will depend on your situation and the option you settle for.
The bankruptcy trustee should explain clearly if you are to make extra income payments. He or she should also advise you concerning the assets you are likely to lose or keep during a bankruptcy.
2. What Are My Options?
This is a key question that most people seeking to file for bankruptcy ask. It is an important question for you as well. Your bankruptcy trustee will review the debt relief options available to you, not just consumer proposals and bankruptcy options.
To provide you with the most appropriate options, the trustee will seek to understand your situation by asking pertinent questions such as: what do you own? Who and how much do you owe? How much money do you receive every month? How much does it cost you to live? Comprehensive answers to these questions help a bankruptcy trustee to understand your circumstances and hence provide you with the most appropriate debt relief options.
3. What Should I Do?
Well, you decide! A trustee will present to you an array of options, explain their merits and demerits; they will also point out what alternatives are most suitable for you based on their expert evaluation of your situation. However, they cannot tell you what to do. They should not tell you what course of action to take. The ultimate decision on whether to file or not lies solely with you. If you feel pressured to take a certain course of action, you should be free to seek someone else’s opinion.
The purpose of seeking the services of a bankruptcy trustee is to find a solution that works for your specific situation, not to coerce you into filing for bankruptcy or signing a consumer proposal that you don’t need in the first place.
4. How Do I Start?
There is a lot of information on how to go about filing for bankruptcy or a consumer proposal. However, your bankruptcy trustee should assist you every step of the way. It’s not enough to just dump application forms in your hands. They need to patiently guide you, show you where to populate with what information, etc. If a bankruptcy trustee asks for money before you even file, this is a good indication their only interest is your money, not helping you out.
There are no hard and fast rules as to which questions to ask. The most important thing is to ask the questions that will lead to the most beneficial outcome. Chances are you may not even end up filing for bankruptcy if you get yourself a reputable bankruptcy trustee with credible experience dealing with clients just like you.