PRO NEE Re Oe OE od ARE YOUR debts getting you so far down you don’t think you'll ever see up again? Indeed. it is one of the clearest explanations I've seen is in a book- let produced by Deloitte & Touche. “Let us explain in plain lan- guage your bankruptcy options and alternatives.” says the booklet, Personal Bankruptey: Solutions to Your Personal Financial Difficulties. “We provide this guide to bankers and other advisers who need the information to pass along to clients — as well as to ordinary individuals who want to find out about their options before they take any steps or reveal their situations.” said Litlian Book, marketing mun- ager, (You can get a free copy from : Deloitte & Touche by calling 669- 4466.) In genezal, you can go bankrupt _ if you are insolvent, which usually means you owe at least $1,000 and _- cannot pay your debis as they become due each month. However, you should always consider the alternatives first: ¢ If you meet the income and other qualifications, you can use the Orderly Payment of Debts’ pro- gram which usually provides for payment in full of all debts within three years; (Call 660-3550 for more details.) * A consumer proposal to credi- tors under the Bankruptcy and ‘ Insolvency Act allows you to make partial settlement of your debts through regular payments over a period of time — provided the creditors accept the proposal. « An informal proposal to credi- tors, if accepted, allows you to make a private arrangement to defer payment of some or all your debt. . e The B.C. consumer services division, debt counselling, offei's credit counselling services. Phone 660-3550 for details. If none of these alternatives work, you can file an assignment in - bankruptcy through a trustee in bankruptcy (who will be paid out of your assets and/or surplus income). This transfers all except your exempt assets to the trustee. Exempt assets include house- hold items with a total value up to $2,000: personal effects including necessary clothing; cash surrender value of a life insurance policy and a life insurance RRSP, if there is a designated beneficiary (spouse, parent, child, grandchild); money received for pain and suffering (like a personal injury award). Once you have gone bankrupt. creditors can no longer take any action to collect what you owe. DOLLARS AND SENSE During your bankruptcy. you must report all income and expenses to the trustce. Usually after nine months, you cun receive a conditional or absolute order of discharge. Of course, it's always better to avoid — or: inimi debt in the first place. And the “debt dunger” time of the year is fast approaching. With the holiday season just around the corner, people now are starting to think about spending. often without thinking enough about whether those expenses fit their over-all financial picture. Call me Scrooge if you like, but T always encourage a little pre- planning (and perhaps moderation) to avoid an expensive financial hangover once the holiday is over. It’s one of those rare guaranteed investments: the time you put in now will pay dividends later. And the risk fs nil. Write down how much you plan to spend over the next couple of months. Include gifts, food and drink for entertaining, perhaps a ski or sun break, Now, ask yourself these ques- tions: Can your budget handle the total? Where will the money come from? In terns of the latter, you have only three choices: use exist- ing savings, save the money as you go along or borrow later to pay the bills. : Ideally, you should put that money aside — from savings if you have the money or every payday through the end of the year. If you decide to borrow, arrange to pay off the debt as quickly as possible and make sure you will be able to handle those payments comfort- ably. if your estimated expenses are too high for comfort, list them in order of priority and trim from the bottom until the budget balances. Once your spending is done. review how your finances survived. Then in January roughly estimate the following December’s spending and have enough put aside each month to reach that total. Mike Grenby is a North Shore- based columnist and independent financial adviser who works with individuals. He will answer your questions in this column as space allows — write to Mike clo 2444 Haywood Ave., West Vancouver, V7V FYI, GUARD Rate Watch ... THE RETIREE NT SPECIALISTS Monthly income on $50,000 investment R.A. Minimum 1st | stv | } tomy | 10th Yr. 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