Archives for March, 2008

Ted Michalos and Scott Schaefer appeared this morning on AM 640 Toronto Radio to discuss taxes. They discussed what you can do if you owe more money to Canada Revenue Agency than you can pay back.

My name is Douglas Hoyes; I co-founded Hoyes, Michalos & Associates Inc. with Ted Michalos back in 1999. Scott joined us in 2002, and is now the trustee responsible for, amongst other things, all of our dealings with Revenue Canada. While Ted and Scott were on the air I was in the office fielding phone calls from listeners in Toronto who heard Scott and Ted talking, but didn’t want to discuss their problems on the air.

I spoke to one person who owed money to Revenue Canada for back taxes. Ted and Scott had talked about the options on the air, and I gave this person the same advice: you either make a deal to pay CRA, or you file a consumer proposal in Toronto or file personal bankruptcy in Toronto.

Many people are surprised that tax debts can be included in a bankruptcy. They can, but it’s important to understand the options before you decide to file bankruptcy.

Scott has prepared a video describing how to deal with tax debts; you can watch it on You Tube, or click twice on the video to view it here.

In the video Scott describes all of the options for dealing with tax debt, because we believe you should be fully informed before you make any decisions.

Our firm has a great deal of expertise in the tax area. In fact, Ted and I went to Ottawa on February 7 to testify before the Senate Banking, Trade and Commerce Committee to discuss proposed new bankruptcy rules.

In his testimony, Ted discussed the role Canada Revenue Agency plays in proposals and bankruptcy. (The video is available here as well).

It is possible to get Canada Revenue Agency to accept a consumer proposal, but it’s quite difficult given all of the requirements they may impose, which is why in many cases bankruptcy becomes the only practical option for Toronto residents with large tax debt.

I mentioned earlier the caller I talked to this morning about tax debts. They thanked us for doing the show today, and for providing resources like this web site, because, as they said, “I had no idea that help was available.”

That’s why we have offices throughout Toronto so that we can meet with you near where you live or work. Our offices at Yonge & Bloor, and in North York, Scarborough, Etobicoke, Mississauga, Brampton and Vaughan are here to help.

There are options, but when it comes to dealing with CRA, you need to be prepared. We will advise you on getting tax returns filed, and how to keep out of trouble in the future. The future is important, because solving yesterday’s tax problem is of no use if you get back into trouble tomorrow.

Dealing with tax debts is complicated, so if you have more tax debt than you can repay, call our Toronto bankruptcy team at 310-PLAN (310-7526, no area code required) or E-mail us to arrange a free initial consultation. We can help you create a solution to your tax problems. 

In 2007 there were 10,778 people who filed personal bankruptcy in Toronto. An additional 5,523 people filed a consumer proposal in Toronto in 2007. That’s a total of 16,301 residents of Toronto that filed in 2007, an increase of 8% from 2006.

Interestingly, bankruptcies increased by 3%, but consumer proposals increased by 20%, indicating that an increasing number of Toronto residents are taking advantage of this bankruptcy alternative.

A closer look at the numbers reveals that the bankruptcy rates are different in different parts of the GTA. For example, bankruptcies and proposals increased by almost 7% in Mississauga, by 5.3% in Scarborough, by 4.6% in Etobicoke, by 4.2% in North York, and by 3.4% in Brampton, but actually fell by 5.4% in Vaughan, and fell by 1% in downtown Toronto.

Toronto’s unemployment rate increased from 6.6% in 2006 to 6.8% in 2007 although this was largely due to increased participation in the job market.
Total employment increased 2.3% in the GTA, a strong growth rate for Ontario. The majority of the increase came in the service sector which was up 3.5% (mainly professional, scientific and technical services, educational services and health care). Toronto did experience a decline of 4.4% in manufacturing jobs (-18,600) and this may have accounted for some of the increase in consumer filings. 

Of course bankruptcy statistics only tell part of the story. These number represent real people with real financial problems.

We won’t treat you like a number. We will meet with you personally and review all of your options, so that you can make an informed decision, so, call our Toronto team at 310-PLAN (310-7526, no area code required) or E-mail us to arrange a free initial consultation. There is life after debt, so contact us today.

An interesting article appeared in Sunday’s Toronto Star about Russell Oliver, "The Cashman" who buys gold from Toronto residents. He has become famous for his TV commercials where he sings: "I’m the Cashman . . . Give you money for your gold." With the high price of gold, he’s buying more gold than ever. In fact, he no longer sells gold or jewelry in his store. The shelves are all empty. He just buys it and then sells it to be melted down and used again.

Why am I telling you this? Because many people I meet with each day ask me the same question: is there life after bankruptcy? Will I ever be able to get back on my feet again?

My answer is yes you can, but it’s up to you. You need to keep your expenses down, start saving money, and gradually rebuild your credit, or just pay cash for everything. The "Cashman" is proof that there is life after bankruptcy, and although I was not a trustee in bankruptcy in 1991 and have never met Russell Oliver, his story is not that unusual. With hard work you can get back on track.

For more information, call our Toronto team at 310-PLAN (310-7526, no area code required) or E-mail us to arrange a free initial consultation, and we can explain how there is life after bankruptcy.