Glossary - Debt and Consumer Rights
All-in price advertising means that dealers cannot add additional fees on top of an advertised price. Exceptions that dealers can charge are HST, licensing fees, or fees for options that you ask for.
Assets, sometimes called property, are money and anything you own that has value and can be exchanged for money. This can include cars, jewelry, land, and investments such as an RRSP or a pension plan. Assets can be used or sold to pay debts that you owe.
An automatic discharge ends the bankruptcy process. It happens when you’re released from most of your unsecured debts without having to go to court.
When someone is bankrupt for the first time, the discharge could happen as early as 9 months after you file for bankruptcy.
Balance, when talking about money, can be:
- the amount of money you have in a bank account, or
- the amount of money you owe to a creditor
For example, the balance on your credit card is the total amount of money you owe.
Bankruptcy is a legal process. When you begin the bankruptcy process, it’s called filing for bankruptcy. When you file for bankruptcy someone called a Licensed Insolvency Trustee decides what you have to pay your creditors.
When you file for bankruptcy, you can keep some of your assets, such as furniture, pension funds, and registered retirement savings plans (RRSPs) that you’ve had for over 12 months.
But you may not be able to keep other assets, such as your home and RRSP contributions that you made within the 12 months before you filed for bankruptcy.
A budget is a plan that says how you will spend the money you receive within a certain period of time. Usually, people create a monthly budget that shows the income they get in a month and all the things they need to, or want to, spend that money on in the month.
Cancellation rights mean that if a dealer does not tell you information they are required to by law, you can cancel your purchase agreement within 90 days from when you signed.
To co-sign is to sign a legal agreement together with another person for a loan or other debt. When you do this you are jointly responsible for paying the debt. For example, if you co-sign a lease, you are responsible for paying all of the rent, even if the other person doesn’t pay their part.
A code of ethics is a set of rules that say what members of an organization or profession can do, and how they are supposed to behave and run their business. For example, a non-profit credit counsellor will protect a client’s privacy and not share information about a client without getting permission.
Collateral is an asset of yours that you use as security for a loan. This means that if you do not pay back the money you borrowed, your creditor can take the collateral as payment instead. For example, a house can be collateral for a mortgage, and a car can be collateral for a car loan.