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Bare trust: Big savings for eligible CDPCL clients

When a consumer meets with a licensed insolvency trustee (LIT), formerly known as bankruptcy trustees, to make a consumer proposal, the LIT has a number of legal obligations under federal law. These include legal duties owed to a consumer’s creditors and the Superintendent of Bankruptcy. It is not the trustee’s role to assist the consumer obtain the most favourable result when making a consumer proposal.

At Consumer Debtor Protection of Canada Ltd. (CDPCL) our goal is to minimize the amount of money that a consumer has to pay under a consumer proposal. As a general rule, the more assets a person has in their own name, the more their creditors will want to receive in a consumer proposal. Therefore, some consumers doing a consumer proposal might be in a position to significantly reduce what they pay under a consumer proposal if they can convince their creditors that despite the fact that their name might be on title on a significant asset, they are effectively acting as a trustee for a beneficiary—typically another family member.

This situation might arise where a child purchases a home and they need a parent to guarantee the mortgage in which case the parent’s name will appear on the title to the home. In our scenario, the parent doesn’t live in the home and doesn’t make any financial payments towards the property. If that parent were to make a consumer proposal the parent’s creditors would want more money under a consumer proposal taking into consideration the amount of the parent’s equity in the property.

In many of these situations CDPCL has persuaded creditors not to include property—where the consumer’s name appears on title when property is owned for the benefit of another—when calculating how much money a consumer should repay under a consumer proposal. This can result in a consumer paying substantially less when making a consumer proposal.

CDPCL has been representing Canadians making a consumer proposal since 2004. Over the past 12 years our firm has made every effort to assist its clients obtain the optimal result when making a consumer proposal. Our firm’s efforts speak for themselves. CDPCL has a A+ rating with the Better Business Bureau.

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