If you’re like most people, financial jargon can be confusing especially when you are trying to make an important decision in relation to your financial situation.
To make it a little easier for you we’ve compiled a list of terms with explanations that you may find helpful when trying to decide upon which step to take to get out of debt and regain control of your financial situation:
Administrator: A Licensed Insolvency Trustee who will assist in the drafting and filing of a Consumer Proposal. The Administrator will negotiate a proposal arrangement with your creditors which you is affordable to you. Only a Licensed Insolvency Trustee (LIT), can act as an Administrator and file a Consumer Proposal on your behalf.
Assets: Property that is owned and that has some value such as a House, vehicle, investment or cash.
Consumer Proposal: An alternative to bankruptcy.
Consumer Proposals are available to debtors who owe less than $250,000.00, excluding the mortgage on their principal residence. The debtor can offer to pay a percentage of the debt due based on their current circumstances, if accepted by a majority of creditors it is legally binding on all unsecured creditors and the debtor.
Co-signor: A person who signs a loan with another person.
Debt: A sum of money owed by agreement or otherwise.
Exempt asset: Assets which are protected or exempt by provincial legislation.
Garnishment: When a creditor enforces a judgment against you by seizing your pay cheque or bank account.
Insolvency or being Insolvent: Being unable to pay your debts as they are due, or in the ordinary course of business or when liabilities exceed the value of assets.
Judgment: An Order of the Court declaring that a person owes a sum of money to a creditor.
Statement of Affairs: The listing of a debtor’s assets and liabilities and certain personal information sworn under oath by the debtor.
Licensed Insolvency Trustee/LIT: A person under the Bankruptcy and Insolvency Act who administers bankruptcy and proposal estates. A LIT had also been referred to as a Trustee in Bankruptcy and Bankruptcy Trustee prior to March, 2017. Licensed Insolvency Trustees must have the required education, experience and must be licensed by the Office of the Superintendent of Bankruptcy.
For more information about any of the terms listed above or other terms requiring clarification, please give us a call at 403-777-9999Previous: "How to Stay Financially Savvy During Wedding Season" Next: "Groceries and Your Wallet"