Thirty years ago no-one had a cellphone. Today, almost everyone in Canada over the age of 10 has a smartphone for on the go and cable and internet service at home. So do you lose those services if you file a consumer proposal or bankruptcy?
The truth is the answer doesn’t boil down to technical legal interpretation of how debts are treated in bankruptcy, but rather, individual company policy. While neither Rogers nor Bell have published an official policy that I know of, I have had informal off the record conversations with a number of Rogers employees and here’s what each one of them has said:
If you are up-to-date on your payments, and if you want to keep your existing service after filing bankruptcy, you can keep your service.
This was not always the case. Many years ago we found based on our experience that it was Rogers’ policy to terminate your service if you filed bankruptcy. However, as we all know, company policy can change.
Here’s some background information:
A creditor is someone to whom you owe money. If your Rogers bill is due the 15th of the month, and you go bankrupt on the first of the month, you owe for the service that you won’t be paying for until the 15th of the month. The same is true for your hydro bill, your gas bill, and even your monthly rent.
In the past, Rogers would cancel your account and then you would have to apply to open a new account, and it would be up to Rogers to decide whether or not to give you a new account. Because you were bankrupt they considered you to be a higher risk, so they could choose not to reactivate your service or they could request a security deposit as a condition of resuming that service.
So what changed?
Rogers realized that that was a lot of work for no good reason. By terminating your account you would simply go to Bell or Telus or some other provider, and Rogers would lose a customer, forever.
That’s why today if you are up to date with your payments, Rogers doesn’t even consider themselves to be a creditor in your bankruptcy. They don’t even want to be notified of your bankruptcy. If your payments are current they generally won’t file a proof of claim with the bankruptcy trustee.
That just makes good business sense. You are not in arrears, you want to keep your service, and Rogers wants to keep you as a customer, so everyone can carry on as normal.
Can you include Rogers in a bankruptcy or consumer proposal?
Yes, if your service was already cancelled, or if you wish to cancel your service, Rogers can be included in your bankruptcy, just like any other creditor. In fact, based on our data, approximately 97% of the time that Rogers appears as a creditor in a bankruptcy it’s because the service was already terminated.
Perhaps you have the most expensive cable package and you can no longer afford it. If you go bankrupt you can cancel the service and all cancellation charges are included in the bankruptcy.
NOTE: If you plan to cancel your service, cancel it before you file for bankruptcy. They will send you a final bill that will include any cancellation charges. This bill becomes a debt from before you filed, so if you want to cancel your service, plan do it before you go bankrupt so that all cancellation and other charges are included in your bankruptcy.
What if I want to downgrade my service?
Perhaps you are on an expensive contract and want to downgrade your service when you go bankrupt. You can call Rogers and ask for special treatment. It is my understanding that they have a special customer care group that will work with you, and based on your situation, they may be able to switch you to a less expensive plan. There are no guarantees, but your chances of successfully negotiating a revised arrangement with Rogers are increased if you contact them immediately upon filing bankruptcy and explain your situation.
What’s my advice?
At Hoyes Michalos we view consumer proposals and bankruptcy filings as a fresh start. Getting out of debt is the first step. However, your financial problems may be caused, in part, by expenses that are too high, so reducing your cable, cellphone or internet service may be a wise decision for your future as well. Now is the time to make a personal budget and determine if cost cutting is in order.
If you decide to keep your existing service, if possible you should ensure that your payments are up-to-date before you file. That’s the same advice I would give you with all of your monthly expenses like rent, utilities and insurance. If you are up-to-date it is likely that you can keep your service.
Finally, don’t take my word for it. While I’m passing along information based on what I know today, I don’t speak for Rogers, I don’t determine their policies and as we all know, policies do change. If in doubt, give them a call, explain your situation, and work with them to decide on your future service options.