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July 2007 - Bankruptcy trustees are not equal

Bankruptcy trustees are not equal

☳ by Adam Aspilla

In the medical field, doctors have different fields of expertise. Some of their specialties are heart, brain, ear and throat, and etc. If you are sick your family doctor will refer you to a heart specialist if you have a heart condition and to ear and throat specialist if you have a problem on your ear or throat.


Similarly, when you have a financial problem one of the professionals you would approach is a bankruptcy trustee if you would file bankruptcy or a consumer proposal for a bankruptcy trustee could also act as a consumer proposal administrator.


The service of bankruptcy trustees on personal bankruptcies is basically the same, but on a consumer proposal, it is different.


Unlike bankruptcy, in a consumer proposal, experience and the right contact person to individual creditors count.


Every creditor has its own policy on how to deal with applications of their debtors for consumer proposals. If a trustee has limited experience he/she may not know the policy of your individual creditors.


Moreover, she/he may not also know the right person to deal with to negotiate a reasonable amount of the proposal.


Dealing with inexperience consumer proposal administrator, a consequence could be – you would not be able to reduce your debts to the lowest possible amount and you may lose a secured-item you wish to keep like a car.


Talking of policy, there are few creditors who would not allow an applicant of a consumer proposal to keep his/her car even if an applicant would continue paying the monthly payments of the subject vehicle.


If this is not known to a trustee who acts as a consumer proposal administrator, you may lose your car for your creditor will seize it.


In fact, there were several instances where applicants for consumer proposal lost their cars unexpectedly because administrators did not know the policy of creditors that financed those cars.


When you are planning to file for a consumer proposal, you have to shop around for a trustee who is experienced or a specialist on consumer proposal administration to avoid surprises and for you get the desired result on a consumer proposal.


That’s because not all bankruptcy trustees acting as a consumer proposal administrators are equal.



Adam Aspilla is a Senior Financial Counselor of the Debt Clinic of Canada Inc. and the author of the book, You Can Negotiate All Your Debts. He also writes a biweekly column, “What Matters In Life” in “Taliba Newspaper. For free initial, professional and confidential consultation, please call 905-306-7572.