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Debt Management and Restructuring

Debt restructuring is a process that allows a private or public company – or a sovereign entity – under financial distress, to reduce and renegotiate its delinquent debts to creditors in an effort to reach compromise agreement.

Home Equity and Valuation

Home equity is the market value of a homeowner's unencumbered interest in their real property—that is, the difference between the home's fair market value and the outstanding balance owing on the property. The property's equity increases as the homeowner makes payments against the mortgage balance, and/or as the property value appreciates.


Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a business or corporate debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by the debtor. A "voluntary bankruptcy" that is filed by the insolvent individual or organization. An involuntary bankruptcy petition may not be filed against an individual consumer debtor who is not engaged in business.

Consumer Proposal

In Canada, a person can file a consumer proposal as an alternative to bankruptcy. A consumer proposal is a negotiated settlement between a debtor and their creditors.

A typical proposal would involve a debtor making monthly payments for a maximum of five years, with the funds distributed to their creditors. Even though most proposals call for payments of less than the full amount of the debt owing, in most cases, the creditors will accept the deal, because if they do not, the next alternative may be personal bankruptcy, where the creditors will get even less money. The creditors have 45 days to accept or reject the consumer proposal. Once the proposal is accepted the debtor makes the payments to the Proposal Administrator each month (or as otherwise stipulated in their proposal), and the creditors are prevented from taking any further legal or collection action. If the proposal is rejected, the debtor is returned to his prior insolvent state and may have no alternative but to declare personal bankruptcy.

A consumer proposal can only be made by a debtor with debts to a maximum of $250,000 (not including the mortgage on their principal residence). If debts are greater than $250,000, the proposal must be filed under Division 1 of Part III of the Bankruptcy and Insolvency Act. The assistance of a Proposal Administrator is required. A Proposal Administrator is generally a licensed trustee in bankruptcy, although the Superintendent of Bankruptcy may appoint other people to serve as administrators.

Credit Counselling

Credit counselling can be a good way to resolve debt while avoiding bankruptcy.

Credit counselling often involves negotiating with creditors to establish a debt management plan for a consumer. This may help the debtor repay his or her debt by working out a repayment plan with the creditor. These plans are typically set up by credit counsellors, usually offer reduced payments, fees and interest rates to the client. Credit counsellors refer to the terms dictated by the creditors to determine payments or interest reductions offered to consumers in a debt management plan.

Unsecured/Secured Debt

Unsecured debt refers to any type of debt or general obligation that is not collateralised by a lien on specific assets of the borrower in the case of a bankruptcy or liquidation.

Secured debt tied to a secured loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral — in the event that the borrower defaults, the creditor takes possession of the asset used as collateral and may sell it to regain some or all of the amount originally lent to the borrower, for example, foreclosure of a home.

Credit Certainty Loan Program ™

Allow North Trust Financial Solutions to establish a funding solution that meets your financial goals. There are multiple loan programs available for each individual applicant. Qualification varies for each loan program. Our loans are designed to resolve outstanding creditor items while ensuring credit rebuilding solutions are provided. North Trust Financial Solutions helps provide credit rebuilding solutions and provide guidance and assistance throughout the term of our loans.

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