Case studies
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Case study: A divorce with financial repercussions
These case studies are not true stories. They do not constitute actual client testimony. However, they are based on experiences observed by our Licensed Insolvency Trustees.Â
These fictional case studies are meant to demonstrate the possible outcomes of a debt solution. In reality, each situation is unique. All individuals struggling with debt should consult a Ginsberg Gingras Licensed Insolvency Trustee to determine the best solution for them, and its effects.
Albert’s finances begin to suffer following his divorce
Albert has been separated for six months. He and his ex-wife share joint custody of their two daughters. However, he must pay $300 in alimony per month.
Before the divorce, he did not have any financial problems. Bills were paid on time, and the family’s lifestyle was appropriate for their means. The children had many hobbies and together they enjoyed many family activities. Albert and his wife each had their own car, they lived in a single-family home, and owned a trailer.
After the divorce, Albert’s income was not enough to pay all the current expenses and accumulated debt.
Albert seeks help to regain control of his finances
After talking with one of his friends who had also been through a divorce, Albert decided to meet with a Licensed Insolvency Trustee (LIT) at Ginsberg Gingras to recover his financial health. After discussing his situation with the LIT, Albert concludes that a proposal to his creditors to repay a percentage of his debts would be the best solution for him.
Albert’s debt before his consumer proposal
| Mortgage | In Albert's and his ex's name | $199,817 |
| Car loan | In Albert's name | $20,016 |
| Unsecured loan | In Albert's name | $21,411 |
| Line of credit | In Albert's name | $14,756 |
| Credit card | In Albert's name | $15,123 |
| Alimony fees (arrears) | In Albert's name | $1,000 |
| Debt total | $272,123 |
With his LIT’s help, Albert determines that he can keep his car and continue to make payments on it. He also makes an agreement with his ex-wife to keep the house. He will of course need to keep making mortgage payments.
Choosing an adapted solution
Before meeting with a Ginsberg Gingras LIT, Albert was worried his situation would not allow him to keep his car and his house. The LIT told him about consumer proposals. A proposal is a procedure that allows debtors to resolve their debts while avoiding seizure.
The LIT explained to Albert that a proposal would exclude secured creditors from the insolvency procedure. These creditors are protected, because they hold security on the goods they financed. Therefore, in case of default, these creditors can seize the goods they have links to. However, as long as the terms are respected (normally, payments, insurance, municipal taxes, and so on), Albert can keep his car and his house.
Albert must pay the late alimony fees, because the Act does not allow release of this debt [section 178 (1)], nor is it affected by a stay of proceedings (section 69.41).
Excluding the mortgage, car loan, and alimony, the debt total that can be released was $51,290. To solve his debts, Albert filed a consumer proposal with his creditors to pay $250 per month. This total is based on the budget that Albert and his LIT prepared together. The proposed term length was 60 months. The total amount that Albert would pay is $15,000.
The majority of the creditors agreed with these terms and the proposal was accepted. Five years later, the terms of the agreement were fulfilled, Albert is deemed to have resolved all the debts in his name. He was also able to keep his house and car.
Albert’s debts after his consumer proposal
| Prêt hypothécaire | Au nom d’Albert | 199 817 $ |
| Prêt auto | Au nom d’Albert | 20 016 $ |
| Prêt non garanti | Au nom d’Albert | 0 $ |
| Marge de crédit | Au nom d’Albert | 0 $ |
| Carte de crédit | Au nom d’Albert | 0 $ |
| Pension alimentaire (arrérages) | Au nom d’Albert | 1 000 $ |
| Total des dettes | 220 833 $ |
| Mortgage | In Albert's and his ex's name | $199,817 |
| Car loan | In Albert's name | $20,016 |
| Unsecured loan | In Albert's name | $0 |
| Line of credit | In Albert's name | $0 |
| Credit card | In Albert's name | $0 |
| Alimony fees (arrears) | In Albert's name | $1,000 |
| Debt total | $220,833 |
Thanks to this arrangement, Albert was able to balance his budget. It was not easy, but he is happy he made this decision. Today, he is living comfortably and has even started taking his children on trips.
Help to liberate you from your debts
Whether or not you’ve been through a divorce like Albert, we can help free you from your debts. Together, we will find the best solution for your budget.
At Ginsberg Gingras, you’re always treated with respect and dignity.