More and more Canadians are finding it difficult to keep their head above water, financially. Debt can be debilitating no matter what province you live in. British Columbia is no different. 

Carrying debt comes at a high cost. The stress of managing your finances in these unpredictable times can also have an emotional toll. But you don’t have to go it alone. Licensed Insolvency Trustee, Julie Drane, talks about the debt relief options available to BC residences.

  • How the debt cycle starts and who is using food banks now
  • At what point should you seek professional help
  • Licensed Insolvency Trustee – their qualifications and licensing
  • The range of debt solutions available 
  • The difference between a Consumer Proposal and Bankruptcy
  • Benefits of counselling sessions

Licensed Insolvency Trustees can help you take control of your debt. They are considered some of the best debt professionals in the country and the only ones licensed by the federal government of Canada.

Wayne Kay 00:03
Welcome to the Debt Matters podcast, where we help Canadians find solutions to their debt with Licensed Insolvency Trustees from across Canada. 

I’m Wayne Kay. Now, because dealing with debt isn’t something that you should take lightly, this show is about dealing with Licensed Insolvency Trustees from across the country. Each province might have some certain rules, so we always identify where our guest is from. And I’ve chatted with many people from Allan Marshall & Associates, and they’ve been providing services in the debt and insolvency field for over 40 years in other provinces across Canada.

Allan Marshall & Associates Licensed Insolvency Trustee undertook the process to expand to the West Coast and open permanent offices in BC. So now, with this expansion, it allows Allan Marshall & Associates the chance to share the unique skills, compassion, and experience with residents in BC who do need their help. 

In today’s show, we’re going to talk about Bankruptcy in BC. A first time guest to the show, Julie Drane from Victoria with Allan Marshall & Associates. Hi there, Julie. Thanks for being on the show.

Julie Drane 01:13
Well, thank you very much for having me, Wayne.

Wayne Kay 01:15
It’s great to have you. And welcome. I see you’ve just moved into BC last year, and how’s that going?

Julie Drane 01:21
It is going wonderfully. I am very much enjoying the weather and the flowers. It’s a great place to be.

Wayne Kay 01:26
Well, I’m glad you’re here, and I’m glad we’re going to be discussing debts in BC, because it is different in each province. And this is why it’s important for us to talk to experts from each province.

And we’ve been talking with people from Alan Marshall and Associates for a lot of different interviews. So welcome. We’re going to put all the stress of BC on your shoulders.

Julie Drane 01:47
Oh, thank you very much.

Wayne Kay 01:50
I thought you would like that.

Julie Drane 01:52

Wayne Kay 01:53
I don’t think BC is that much different from most provinces, but, I mean, you keep your fingers on what’s going on economically. It’s pretty tough for a lot of people, isn’t it?

Julie Drane 02:06
Yes, things are getting really tough for people. It’s getting harder and harder to get by. And more and more people and families are really needing to rely on food banks and other such things to make their ends meet. 

So when it’s the choice between paying your bills and putting food on the table, time to talk to a Licensed Insolvency Trustee about the options that are out there for you.

Wayne Kay 02:27
Yes, well, and that’s it. I talk a lot with people from food banks, and they’re saying it’s working families. Both people are working. It’s people who already have homes.

It’s not traditionally what you think of when you think of a food bank. It’s really changed over the last five years.

Julie Drane 02:47
Yes, it has. Unfortunately, you are correct. More and more people, working families, seniors, the food banks are seeing people from all different walks of life that are relying on them just to get by.

Wayne Kay 03:01
And it’s the cost of everything, like every single thing has gone up. I mean, the gas in Victoria, I can’t even imagine what it is, $1.75, $1.80?

Julie Drane 03:10
No, we’re well overm$1.80 most days.

Wayne Kay 03:14

Julie Drane 03:14

Wayne Kay 03:15
There’s little things like that and then that of course, boosts everything else up. So when we’re talking about these families who are having a tough time and you said they have to make the decision of food, rent or paying bills, I guess food and rent come first.

Julie Drane 03:34
Yes, typically they do. They’re putting food on the table and paying your rent, your utilities come before paying for your credit card, as it should.

Wayne Kay 03:45
Right. But then you get into the cycle. Right. So all of a sudden you have to use the money that’s coming next week to pay for the last month and you’re still behind. Is that what happens as the families slowly just get farther and farther and farther behind and deeper in debt?

Julie Drane 04:04
Yes. Once that cycle does start, we do see that happen a lot. And unfortunately, a lot of people, in addition to the traditional lending, are going to places like cash stores and trying just to not only make the ends meet, but also to try to pay their day to day debt payments on things like credit cards and lines of credit just to get by.

Wayne Kay 04:26
Right. Because we see these on TV, but people don’t understand how they all work and all the different fees you get – fee’d to death, if you will.

Julie Drane 04:37
Absolutely. You do.

Wayne Kay 04:39
So I think this is fitting because in this show we do talk only to Licensed Insolvency Trustees from all over the country –  because what do you go through to become a Licensed Insolvency Trustee?

Julie Drane 04:52
Well, we go through quite a rigorous program which starts with the program that is associated with the Canadian Professional Accountants Association. Our association is called the Canadian Association of Insolvency and Restructuring Professionals.

We take a university level course while working for an Insolvency Trustee. We have to write several exams and then once we pass all of that, we get to sit in front of what’s called an oral board of examination and then they ask questions. 

At this point they used to be verbally, now it’s in writing. And you get grilled by the federal government employees, essentially to say, does this person know enough to be able to help a Canadian citizen in dealing with their overwhelming debt issues and giving them all the options that are available to a Canadian citizen for dealing with that debt?

Wayne Kay 05:47
That’s pretty in depth and that’s why LITs are number one with this show. So you see a lot of families, you see a lot of individuals that get into these serious debt. When is the point where they should probably contact a Licensed Insolvency Trustee?

Julie Drane 06:07
If you get to the point where you think you’re in trouble, you probably are, and that’s the time to contact us. Don’t struggle along because sometimes there’s options that we know about that we can even if it’s something we don’t deal with, that we can say, hey, have you talked to someone about this?

So it doesn’t cost an individual anything to come and see us. So if you think you’re in trouble, you probably are, and that’s the point to reach out. There is no cost or obligation to have that call with a Licensed Insolvency Trustee.

Wayne Kay 06:41
So let’s talk about what that trouble looks like. Because oftentimes, I mean, it’s human nature, we want to solve the problems ourselves.

So we start selling off things that we probably don’t need to, or selling off RRSPs or savings or things like this. What are some of the things we do wrong when we realize, okay, we’re in debt and we need to try to fix this?

Julie Drane 07:05
One of the bigger ones is one you’ve just mentioned, Wayne. Cashing in retirement funds. In the province of British Columbia, an RRSP is exempt from seizure, which means nobody can touch it except for any contributions an individual may have made in the last twelve months.

Cashing in the RSP causes two potential issues. Number one is with Canada Revenue Agency for tax that you owe on it. And two is when you do retire, you don’t have that. And Canada pension and old age don’t provide as much stability as people think that they should. 

So you see, people, like you said, cashing RSPs, selling off household furniture to pay for their food, going to cash stores, reaching out to friends and family just to make ends meet. That’s the time to reach out, find out what your options are.

Wayne Kay 08:02
And that’s where you make that phone call to an LiT –  Allan Marshall & Associates. The website I’m going to give to you is –

I think it’s really important that people understand this because people are going through this. They’re lying awake at night, there’s anxiety. They’ve got all just so much stress on them. The phone starts ringing, there’s debt. So what are some of the solutions?

I want you to walk us through that. You go through – so you make the phone call, you come on in to see you, and then what happens?

Julie Drane 08:35
We go over your entire situation. So we talk about how many people are in your family, what kind of assets do you have? Who exactly do you owe money to? And then we have a look at various options. 

In Canada you’ve got non legislative options. You can try and do your own arrangement with the debtor or debtor creditor. Sorry, you can go to your bank, say, hey, I need a consolidation loan. Will you do that for me? 

Some people have a home that they can refinance. They can pull some money out to pay that debt. Some people are lucky enough to have friends and family. They can borrow from that one I usually don’t recommend.

There’s credit counseling where sometimes an individual just has a couple of small debts so they don’t need to go into a proposal or a Bankruptcy, so we send them off to a credit counseling service. 

Some people are actually able to do nothing. If we have certain people with certain types of income, like a pension or a disability, in a lot of cases creditors and collection agencies will threaten them, but there’s really nothing that they have to do. 

Then the final two options are the options that a Licensed Insolvency Trustee and only a Licensed Insolvency Trustee can help with a Bankruptcy, which is always the last option for anyone, or a Consumer Proposal, which is a formal debt settlement with your creditors, which provides the same protection from your creditors as a Bankruptcy would provide.

Wayne Kay 10:02
Okay, so explain that for somebody who’s got major debt. What does that look like? So the Bankruptcy versus the Consumer Proposal.

Julie Drane 10:14
Major differences between the Bankruptcy and the proposal. In a Bankruptcy, essentially the Trustee becomes the owner of all your assets. Now most people, their assets are either exempt so nobody can touch them or they’re secured to a creditor. Like a car that you pay a loan on or a mortgage on a home. Any assets which are not protected, then an individual can either buy them back for the Trustee or the Trustee can sell them. 

In a proposal, the assets stay with the individual, they’re free to deal with them as they see fit. We do have to take them into account when we’re looking at numbers, but that’s a major difference. Another major difference is income monitoring.

In a Bankruptcy, every month you have to send in your budget sheets and your pay stubs, your bank statements. And then there’s a guide that the government gives us about how much income an individual or family can make before they have to pay different types of money. 

A proposal, the creditors get to vote and once it’s accepted, there’s no, okay, well this month you have to pay us this much. Next month it gets to be a set amount and in most cases it’s pennies on the dollar that you’re paying back. The creditors, the majority say, yes, we’re willing to take that.

You make those payments and you do a couple of credit counseling sessions about budgeting, money management, rebuilding your credit. And at the end of however long the proposal takes to pay off, you’re done. You’ve got your fresh start, you’ve started to rebuild your credit and you get to move on with your life and get that fresh start.

Wayne Kay 11:48
And you mentioned pennies on the dollar. So if you owe for mathematics, let’s keep this simple.

If you owe $10,000, you could end up potentially just paying back maybe $2,000. Is that right?

Julie Drane 12:06
In a lot of cases, no, it’s a little bit more than that, but I wouldn’t say no, every situation is different. Every person I see, every family I say is different. So in some cases you’re right, it could be a tiny proposal like that, if that’s what is the perfect thing for that situation.

A lot of people we see have significantly more amounts of debt. They’ve got very little income. So you could be paying $150 a month for five years, like $9,000 to get rid of various amounts of debt. It’s all very individual. So for me to give a percentage or a dollar figure because it’s such an individual process, I really hesitate to do that because it’s all over the place.

I know some people say, okay, well, if it’s this creditor, it’s this percent. No, it’s very individual. We work with the creditors, we work with their claims processors to try to negotiate the best recovery both for the creditor and the best outcome for the debtor, so that all parties are represented and all parties are properly represented. That’s the best way to put it.

Wayne Kay 13:21
Okay, but is it kind of like a consolidation? Because then you would only make one payment at that point, or do you still have to make multi payments?

Julie Drane 13:33
A lot of people do liken it to a consolidation, so essentially it is, but in a lot of cases you’re only paying a portion. So you put everything other than if you’re paying a car payment or a house, like a mortgage payment, all your unsecured, so your credit cards, your lines of credit, your cash, store loans, old utility bills, that all goes into one. You make one payment to your Trustee. The Trustee holds that money in a trust account and then makes distributions as every so many months or once a year, whatever the proposal calls for.

So different Trustees pay at different intervals and it also depends on how much money there is in the trust account, that sort of thing. But essentially in answer to your question, the long and the short, Wayne, is yes, it’s likened to a consolidation loan with a slightly different outcome on your credit report, but it has the same effect. It gives you relief. You don’t have interest payments and it’s one payment as opposed to ten little payments, possibly just interest, right?

Wayne Kay 14:39
Yes. And I’ve heard that the Consumer Proposals definitely have become the most popular with resolving debt issues much more than Bankruptcy. But Bankruptcy for some people is still a very viable option.

Julie Drane 14:51
Yes, it is, but a lot of people –  they really do want to pay as much back as they possibly can. So for some people, even if they have small incomes, they like the proposal because it gives them the opportunity to pay back just a little bit more. The other time that people like proposals better than bankruptcy is if, God forbid, they have had to file a Bankruptcy before. A second Bankruptcy has a much longer effect on the credit report than a first time Bankruptcy does.

So a lot of people do like the proposal because (A) they know how much the payment is going to be and then (B) they know that the maximum period of time that it’s going to affect their credit report – is eight years. Where a second time Bankruptcy can be 17 plus years depending on the individual situation. 

So that makes it a much more palatable option for a lot of people. And unfortunately, a lot of people are still afraid of the word Bankruptcy. To them, it has a very bad mental connotation to them. So that will also drive people to the proposal as opposed to Bankruptcy.

Wayne Kay 15:58
Right. Well, the best thing they can do is make that phone call or check you out online and do the first free consultation to find out what their options are. Julie, is there any final information you want to share with us?

Julie Drane 16:10
I don’t think so, Wayne. I think that covered it. Like you said, the best thing for someone to do is to contact a Licensed Insolvency Trustee.

Our website is We have the phone, we have email, we also have an online chat option and that’s a great place to start.

Wayne Kay 16:27
Julie, a pleasure having you on the show. Thank you so much.

Julie Drane 16:31
Thank you, Wayne, I appreciate your time.

Wayne Kay 16:33
That’s Julie Drane from Allan Marshall & Associates Licensed Insolvency Trustee. If you want to learn more, you can set up a consultation through their website. As she just mentioned, And that’s it for today’s Debt Matters podcast. 

Make sure you subscribe wherever you get your favorite podcast from. And of course, for more information you can always check out Thanks for listening.

About Julie Drane

Julie began her career in the insolvency industry in 1997 with Canada Trust, Citi Financial and then with a corporate trustee. She achieved her goal of becoming a Licensed Insolvency Trustee in 2008 and now focuses on consumer insolvency. 

Julie’s depth of knowledge and commitment to service allows her clients to find the best option for a fresh start. She is now working in the Victoria, BC offices.

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