Bankruptcy Toronto

An old French proverb says that if you fear suffering you will suffer from fear itself – sometimes fear of a thing is much worse than the reality of it. This is definitely the case with my next common fear about filing bankruptcy in Toronto – the fear of criminal consequences. Many times I have had a person in my office asking me if they will go to jail for not repaying their debts, or if they will lose their passport or citizenship and not be permitted to exit or re-enter the country. Unfortunately, many people put off calling our office because they are afraid that being proactive about their debts will result in losing their status to live as a free Canadian citizen.

The reality is this: debtor’s prison may have a place in the history books but in our society there is no such thing. Not paying your debts or filing for bankruptcy will not put you into to jail. But more importantly, most creditors do not want you in jail because they would prefer that you are working so that they can recover some of the money you owe to them. Likewise, not paying your debts or filing for bankruptcy will not stop you from traveling to visit friends or family abroad – there is no notation on your passport or citizenship that you have filed for bankruptcy. So you should be able to travel outside of Canada and within Canada without any issues.

If you have been putting off dealing with your debt problems because you fear legal consequences like the ones I have illustrated above, please call us to discuss it and we will let you know if you have any real cause for concern or if it is another common myth holding you back that we can chase away for you. Call us today at (416) 730-8060 or 310-PLAN (7526), or send us an e-mail to develop a plan to deal with your debts.

Next week I will finish this series by discussing the most common fear of all: Bankruptcy means that my credit rating will be destroyed for seven years.

What a privilege it was to watch our Canadian athletes excel at this year’s winter games in Vancouver – especially hockey. Now that the Olympics are over and I’ve had some time to reflect on the successes that we have experienced as a country; I can see the connection between determined athleticism and personal finance – in either case, if you have achievable goals and the skills to make them happen – anything is possible. We can help you with the skills if you have the goals!

What have our athletes taught us about financial hardship? I think the best example can be found in our bronze winner Joannie Rochette – a figure skater who suffered a devastating personal loss days before winning a bronze medal. Joanie came to the games to win and the passing of her mother did not stop her from securing a place on the podium. While financial hardship is not even in the same league as losing a family member – for most people it is still a pretty crushing blow to how they feel about themselves. Bankruptcy may not be the only or best option for you – you may want to consider a consumer proposal – an option where you repay a portion of your debt over time and work towards the goal of paying back some of the money you borrowed.

If you are experiencing financial difficulty and are wondering about your options call us today to schedule free consultation.

Robert Louis Stevenson said that (except for the part about bankruptcy in Toronto) – and as I am about to discuss joint debt and married couples I thought it was relevant to the topic at hand! Today is my third article in an ongoing series about the five most common bankruptcy fears.

Many married couples share – and don’t share. How much you share financially with your spouse varies from couple to couple. Sometimes this includes debt and sometimes it is more of an assumption of debt – meaning that there is a big difference between everything is “ours” and the legal obligation of being “joint and severally liable” for a debt.

I cannot even begin to count the number of times couples visit me and asked me “If I have debts and I am married, will my spouse will be responsible for the debts if I go bankrupt in Toronto?” The answer is no, the only time someone else is responsible for your debts is if they are joint on the debt with you or have co-signed the debt for you. This is what we commonly refer to as joint and several liability. In this case, if you do not repay the debt than the other person who signed with you will be required to do so. Being married does not automatically make you joint or financially responsible for the other person’s debts. There must be a legal financial responsibility outlined in the cardholder or loan agreement. More information can be found in our article on how bankruptcy will affect your spouse.

If you are unsure if a debt is joint or not, you can ask the lender or look for the original agreement that you signed. If this fear has been holding you back, don’t let it! Call us today at (416) 730-8060 or 310-PLAN (7526), or send us an e-mail and get started on your path to financial recovery. Don’t share your fear with your spouse, share your confidence – by dealing with your debt problems you and your family will be well on your way to a fresh start.

Next Week’s Fear: Will I go to jail if I don’t repay my debts?

I would like to take credit for that quote, but it was Marie Curie, a very wise woman who said it first. Last week I started to discuss the five most common fears that people have about bankruptcy in Toronto – the fears that stop people from investigating their options with regard to debt.

Last week I discussed the common fear that filing for bankruptcy means you will lose all of your personal belongings and household furnishings – which of course is not true.

This week the topic is obtaining new credit. Many people visit my office and tell me that they have heard that if they claim bankruptcy they will NEVER have credit again. This is typically not true unless you do not want to apply for any new credit. But you will have a life after your bankruptcy ends and most people do eventually apply for new credit after bankruptcy.

Here are the facts: as part of the bankruptcy process, you are required to attend two credit counseling sessions. One of these sessions is about rebuilding your credit once you have finished your bankruptcy. Typically the minimum time to be in a bankruptcy is nine months. Once you are done, or discharged, from your bankruptcy, you can start to rebuild your credit and the counsellor will give you some tips for starting over. Rest assured, there is life after bankruptcy and that life will likely include new credit, be it a secured credit card, a car loan, or a mortgage on your first home – you will be able to start over.

So if you’ve been putting off that call because your fear of a credit-less future has been getting in the way – you don’t have to wait any longer. If you are ready to put a plan into place to deal with your debts please feel free to contact us today at (416) 730-8060 or 310-PLAN (7526), or send us an e-mail.

Next Week’s Fear: What happens to my spouse if I file for bankruptcy?

While growing up my parents always reminded me that knowledge is powerful and not to fear what I don’t understand. I am fortunate to have had parents to teach me this lesson early in life but many people who I meet have a lot of misguided fears about personal bankruptcy in Toronto.

I meet with many people in Toronto to discuss their financial options and at the end of each meeting, the majority of people say things like “I should have come to see you sooner, this was not as scary as I thought it would be.” Your trip to my office should not be scary – I want to help you to determine what the best solution is for you and your debts. Should you try a consumer proposal where you repay a portion of your debts over a maximum period of five years? Or is bankruptcy a better solution for your budget?

Over the next few weeks I will write about the five most common bankruptcy fears that people ask me about at their first meeting – the fears that stop people from contacting us sooner – my hope is to help you overcome those fears and get started with your financial plan today.

One of the things that people fear is that when they go bankrupt someone will come to their home and take all of their stuff – allow me to dispel this myth for you. Ontario law states that some of your assets are exempt from seizure. This is the law. For example, your household items such as your television, dining set and bed are exempt up to a value of $11,300 and your personal items, such as clothing and shoes are exempt up to a limit of $5,650. You may also keep one vehicle if it is worth less than $5,650 (this exemption is not for cars that are financed or leased – those vehicles you may keep if you continue to honor your contract). The exemption limits are based on liquidation or "garage sale" values; most people do not exceed the limits unless they have valuable antiques or collectibles.

If fear is holding you back from calling us for advice, don’t let it! If there is something that you have questions about please call us at (416) 730-8060 or 310-PLAN (7526), or send us an e-mail.

Check back next week when I will discuss the common fear that bankruptcy means you will never have a credit card again.

Every person that files bankruptcy in Toronto with me asks the same question: What’s involved? What do I have to do to make sure my bankruptcy finishes as quickly as possible.

I realize how nerve wracking and stressful bankruptcy can be, so I try to simplify the process by giving every person who files bankruptcy a sheet that lists their duties and responsibilities. Here’s a quick summary:

1. In a bankruptcy, the individual must report their family income to their trustee for us to determine how much, if any, must be paid to their creditors as part of the bankruptcy process. These rules are referred to as “Surplus Income” rules. Simply put, the more you earn, the more you pay while you are bankrupt in Toronto. Each month you will send my office copies of your pay stubs, and based on your actual earnings we will calculate your required payment.
2. There are two mandatory financial counselling sessions to attend. They last about an hour and focus on budgeting and credit repair. Most people tell me these are great sessions, and help them learn how to budget so they don’t get into financial problems in the future. That’s why I call bankruptcy a "fresh start".
3. It is a requirement that the Trustee file the tax returns for the year of bankruptcy and the previous year, if it has not already been filed.
4. Each month the bankrupt person will also make a contribution to their estate to cover basic administration costs. The cost of your bankruptcy will depend on a number of factors, including what you earn, and the size of your family.

This is a quick summary of your duties as a bankrupt in Toronto. For a more detailed explanation, and to find out what would happen in your specific situation, please call our office in Toronto at 310-PLAN, or e-mail us for more information.

As a bankruptcy trustee here in Toronto, I see many people throughout the week who have different types of financial difficulties. My goal is help each person I meet find a solution to their money problems. How much I can help often depends on the seriousness of the debt problems. I know from experience that if a person’s debts include payday loans, the situation is pretty bad.

Payday loans are an easy fix; too easy. Here’s what I see, all too often: Something happens in your life; the car breaks down, a bill has to be paid, or something else you consider urgent. You don’t have any savings to draw on. You say to yourself "all I need is a small advance on my next pay cheque to cover this, and then everything will be ok". You go to a payday loan shop, the paperwork is simple to complete, you get your cash, problem solved. And that’s when the real problem starts. Your payday comes and you find your pay cheque going to pay off your payday loan. Now you don’t have enough money for rent, groceries or other basics.

So, how do you fix this problem? Wait; how about another payday loan? Get the picture? I haven’t even started to talk about the fees and interest rates that are charged. They border on the criminal.

So what advice do I have for you? The same thing that we were told years ago when we were lectured on drugs by our parents and teachers: “JUST SAY NO”.

Sounds pretty simple, doesn’t it? The best advice I can give you is if you find yourself in this type of financial crisis, gets some help from a professional. There are solutions, including debt consolidation loans, debt management plans, consumer proposals and, finally, bankruptcy. I know that a payday loan is not the solution for your money problems; to find out which solution is right for you, call our office in Toronto at 310-PLAN, or e-mail us for more information.

I recently spoke to a real estate agent, and she spoke told me about the staggering number of homes being sold under power of sale due to arrears on mortgage payments.  She went on to say that this heartbreaking event all too often leads to marital breakdown.  It is easy to see how this happens – young families, big debt and tremendous stress.

I agree with her comments as I speak to people on a daily basis who are dealing with issues like this. In the bigger picture the mortgage will often get behind as other unsecured debts also demand monthly payments.  

There may be a better way to save both the home and the marriage.  This is a very complex issue (more complicated than can be fully explored in a short article) but let’s review the basics.

Under the Bankruptcy and Insolvency Act a consumer proposal can be offered to your unsecured creditors.  This means that credit cards, lines of credit and unsecured loans can be bundled into one manageable monthly payment.  The interest stops on this type of debt and creditors lose the right to take collection action.  Simply put, this could significantly improve the family’s cash flow and make room for the mortgage payments.  There are a number of factors that have to be examined such as the amount of equity in the home, family net income, day care expenses and so on, so the decision to file a consumer proposal can only be made after an in-person consultation to allow us to review all of the facts.

Another interesting point that the real estate agent made was that rental properties are not easy to find and in some cases the rents are equal to or greater than mortgage payments.  In the case of a separation of the family this could also mean two rental properties, support payments and even more stress.

We can’t begin to resolve this type of problem in a short article, but we invite you to call us at 310-PLAN, complete an online evaluation or send us an email and one of our professionals would be more than happy to discuss the options with you.  We offer a free consultations so if you are wondering what to do next, let us help you develop a plan to deal with your debts. 

It doesn’t matter if you’ve been naughty or nice – if you are feeling a pinch in your wallet this time of year you are no different from most residents of Toronto! Holiday shopping in the province’s capital can be both a blessing and a curse! We have the benefit of options – so many stores and so many discount sales – but we also have the burden of increased marketing. When I look out my office window (from our bankruptcy Toronto office at Yonge & Bloor) I see a lighted sign from a major retailer that flashes all of the ongoing seasonal deals!  With so much advertising in Toronto we have decided that our gift to you this season would be a helpful list to aid you in your shopping so that you can put up your best defense – you!

1. Create a shopping list – be clear about who and what you are shopping for and how much you want to spend.  Don’t be tempted. 
2. Window shop first – always look around for deals on specific items – if your father asked for a new microwave oven make sure you don’t just buy the first one you see – there is always a better deal!  Also consider bargaining for the item.  In many cases if you ask for discount or what is available you will be surprised at what can be offered. 
3. Leave the cards at home – shopping with cash will make it easier to stay within budget!
4. Be savvy and creative – think about who you want to give gifts to and if you can make that person happy with something that costs less but has a big impact on them you are really understanding the true spirit of the season – it’s not about how much you spend it really is the thought that counts!

For those of us have entered into this season with existing debts and who plan to deal with them in the new year, proceed with caution – if you are spending on your credit cards today and considering bankruptcy in the new year the credit card companies can ask that you repay a portion of the money spent!

If you already have more debt than you can handle, we are here to assist you so please feel free to call and request your free consultation today!

Happy Holidays Everyone!

Debt can be very frustrating – we all know this – and it doesn’t really matter how big the debt is – it doesn’t take much to upset the apple cart. Many people feel alone with their debts and do not know where to turn for advice – if you live in the downtown Toronto area you can turn to us!

I want to take a moment to introduce our team to you. My name is Sandra Sykora and I am a trustee in bankruptcy with Hoyes Michalos & Associates Inc. Our company has been in operation since 1999. I have been working in bankruptcy for over 20 years and have extensive experience working with people and dealing with their debt problems. I am available to meet with you to review your financial situation and come up with a plan that will work for you and your family.

In the past year, it has been busier than ever due the down turn in the economy. To assist with the increase in volume, in 2008, April Potter joined my office. April is a qualified Estate Administrator and Insolvency Counselor and she has worked in personal bankruptcy since 2004.

Together April and I form the team in the downtown Toronto area, but we also have a team of over 60 people supporting us in our head office, and throughout Ontario.

So if you are feeling overwhelmed by your debts, please contact our office at 310-PLAN(7526), no area code required in Toronto, or toll free at 1-800-472-7775, or e-mail us to ask a question or book your initial consultation. The meeting is a free consultation and takes about an hour and we will need a list of the people you owe money to. We will review all of your options; debt consolidation loans, debt management plans, consumer proposals and bankruptcy.

We look forward to meeting with you; together we will come up with a plan to deal with your debts. Just remember, you can always go downtown, where someone is always waiting to help you!