Life is unpredictable, and sometimes unexpected events can lead to financial strain. In this article, we will explore a case in which an accident led to the need for a Consumer Proposal as a debt solution. This case involves a family who had to deal with mounting debts after their primary income earner was involved in a motor vehicle accident.
The Triggering Event
In this case, a significant incident led a family to seek help for their financial difficulties. The family’s father, who was also the primary income earner, was involved in a motor vehicle accident. This unfortunate event left him unable to work for almost a year, and as a result, he was also unable to maintain an income property during this period.
The Family’s Financial Situation
The family owned a personal home in one city and a small apartment building in another. As the father was unable to work due to the accident, the family had to resort to using credit cards and lines of credit, which are forms of unsecured debt, to keep up with the expenses for the apartment building. However, they were unable to afford the property taxes.
“Financial struggles can hit anyone at any time. When they do, it’s important to seek help and explore all available solutions.”
The Debt Solution
Bankruptcy Canada’as Debt Solutions Manager assessed the family’s liabilities and assets. After careful analysis, it was suggested that the parents could file a joint consumer proposal. Their debts, excluding their primary residence, did not exceed $500,000 – making them eligible for this option.
Evaluating the Equity
The family obtained an opinion of value for their primary residence. After deducting the estimated selling costs, the equity in their home was calculated to be $9,875 each. Given the new exemption that took effect in December 2015, the full equity of $19,750 in their primary residence was entirely exempt.
The Vehicle’s Value
The vehicle involved in the accident was substantially damaged, so it held little value to creditors. However, the father still had a promising job to return to once he recovered from the accident.
Conclusion
This case serves as an example of how unpredictable life events can lead to financial stress. However, it also demonstrates that there are solutions available for those struggling with debt. In this particular case, a Consumer Proposal provided the family with a way out of their financial difficulties.
In conclusion, it’s important to remember that seeking professional help and exploring all available options can make a significant difference when dealing with debt. Life may be unpredictable, but with the right support and guidance, you can navigate through any financial storm.
